Ukraine’s deposits of lithium could be among the spoils of victory that Russia is after. | DW News

Ukraine’s deposits of lithium could be among the spoils of victory that Russia is after. | DW News

Russia’s war on Ukraine has raged on now for over two years and the cost of both sides have been immense one of the possible spoils however of Victory could also be what is in the ground Ukraine has huge deposits of lithium that’s an important medal for Batteries That Power electric cars or smartphones fighting near the Ukrainian Village of kovo earlier this year above the ground towns that have seen of tank battles since the War Began what you don’t see is the hundreds of millions of dollars of lithium the geologists say is likely underground Ukraine has significant deposits of natural resources that could make Russia’s War financially pay off in addition to lithium there are significant oil gas metal ores Rare Earth and precious metals buried beneath the soil potentially worth more than $2 trillion lithium is a key material for the future of electric cars and many Smart Technologies Ukraine’s deposits are located in the Kad and donet regions kirad is still under Ukrainian control while much of donet is occupied by Russia before the war the European Union had its eye on Ukraine’s deposits especially of lithium it currently Imports almost all of the mineral from China in 2021 the EU and Ukraine agreed to a strategic partnership for raw materials there is enormous potential because critical raw material essential for decarbonizing of our economies can be found in abundance in Ukraine according to the US the war in Ukraine has cost Russia well over a trillion dollars in economic losses as well as hundreds of billions in expenses on the war itself but the trillions hiding under Ukraine’s fields and factories would far outweigh that in a war that’s had such a massive human cost we’re joining me now from Washington is gracein bascaran she’s the director of the project on critical mineral security at the center for strategic and International Studies Miss mascaron it’s good to have you with us tonight let’s just look at the last few years in 2020 the European Union approved the green deal which meant demand for electric cars would soon surge demand for lithium batteries as well 6 months later Vladimir Putin invades Ukraine is that a CO incidence resources have sometimes been an incentive but I don’t think there’s any case for causation here when we actually go back and look at how much lithium does Ukraine have Ukrainian researchers have estimated that the Eastern region has about 500,000 tons of lithium which is significant given that particularly as we said earlier we need it for decarbonization goals however that still amounts to about 2% of global reserves but now if you think about it in the big picture of what the invasion has actually cost Russia in terms of um sanctions in terms of trade some of these other dimensions it’s going it’s pretty significant so it’s it’s a bit of a stretch I would argue to say that he went for those resources did how big of a deal is it if this ends up in Vladimir Putin’s hands I mean is it enough to delay or to even possibly sink Europe’s transition to clean energy so in terms of lithium when we look at countries that have significantly larger reserves of lithium than what we think we have in Ukraine we’re looking at Chile Argentina the US Canada uh China of course and so what it what it could look like is the Ukraine would be a closer source of lithium but a lot of this again is undeveloped resources bringing natural resource like you know mines online can take 10 15 20 years at times so this would be a very long term um undertaking in Ukraine to start with in the near term I don’t think we’re we we’re going to see that impact us strongly however what we do know is that we have this from Global Experience for centuries now is that resources can prolong conflict so um if Putin chooses to take build those mins out take those resources he can use it to fund future conflict do you see considering there is this deposit though that part of it is in the donbass where where you have these Russian controlled for forces now is that a disincentive do you think for Vladimir Putin if he does sit down at the negotiating table to agree to return territory to Ukraine considering what’s underneath the soil yeah so there’s two two things to unpack there one is it of course resources can be a disincentive right there’s very monetizable resources under your feet so there there does carry that power but the second thing we have to remember that I think isn’t being talked out as much is that mining is incredibly energy intensive in some countries it can use a third to half of the grid country’s grid power Ukraine’s energy infrastructure has been wiped out pretty severely I think over half of its power generating capacity is gone now we’re on rolling black blackout so the fact is is that they’re so far of rebuilding Ukraine’s infrastructure to even get to a point that you can mine is that of course it could be a bargaining chip because there’s money underground but it could also turn around to be an incentive to rebuild the infrastructure if you are to ever want to mine what would it mean for Ukraine if it loses control of these lithium deposits that are at present you know underneath Ukrainian territory well those resource was wouldn’t be their to be able to to to benefit from so essentially what that means is a permitting would be done by Russia um they would get to decide who mines it therefore whoever mines it pays taxes to Russia so what ends up happening is the country um socioeconomically um does not actually benefit from the resources under their feet if they’re not the ones who ow if if Ukraine as a government does not owne those resources and you know if you look into the future and I’m talking near future here what type of role do you see valuable minerals playing in the Russian invasion of Ukraine I mean are we talking about a role that is getting bigger by the day I think as we start to look at what the next phase is we’re talking about reconstruction we’re talking a lot about private sector investment you know how do we get Ukraine back on its feet what does it look like natural resources are going to be a part of that and we’ve seen this kind of across major emerging economies that as we look at economic recovery mineral resources are a core part of that because it is something that can build um G get the investment get the infrastructure get the jobs going however right now I mean I’m going to just pull back and look quickly at Russia next door um the other day we were looking at the data in terms of nickel Palladium um you know uranium Russia is still producing the same amount of resources as they were in 2021 by and large but the exploration has dropped off by over 60 70% so the the biggest risk we Face going forward is because when you combine political and economic risk lack of infrastructure people are companies are going to be less likely to explore the region right now a lot of the deposits are at speculatory Phase they’re not at a point where we could be like like I’m going to drill a mine tomorrow so we need that bridge now is growing to be able to go from speculation to production graceon the basket run we appreciate your time and your valuable analysis tonight thank you thank you for having me I’d like to welcome Olivia Lazar a fellow at Carnegie Europe an expert on geopolitics for more on this issue so conventional wisdom in the west is that the driving force behind Russia’s invasion of Ukraine was Putin’s vision of establishing new Russian Empire but you you’ve also argued that this is about access to critical raw materials could you tell us a little bit more yes good morning and thank you for having me Russia has essentially a bunch of different aims one of them is obviously to recover control over Ukraine parts of um the Ukraine attraction lies in the strategic materials that the world is now fully interested in for green transition but also also for digital and defense transitions Russia is looking to have access to a number of critical raw materials for its own needs regarding defense but also in terms of sustaining its partnership with China it’s also vastly interested in making sure that the European Union essentially fails in the promise of its green deal and particularly in its climate law which requires the European Union to um decarbonize by at least 55% by 2030 and to be fully carbon neutral by 2050 if it fails to do so it has Democratic consequences that will have reverberations in terms of democratic Fabrics Coming Undone within the European Union so you’re saying that part of Russia’s calculation is the eu’s goals we’ve heard the eu’s long hoped that Ukrainian resources would help them become less dependent on countries like China is that is that what you think Russia’s calculation is and is that then also part of the incentive for the EU backing Ukraine the EU has as you mentioned in your sort of capsule before it had struck a strategic partnership based on raw materials with Ukraine in July 2021 just short of six months before the war in of invasion the relationship between the EU and Ukraine regarding the future pipeline for raw materials predates the war so there is no question essentially that it is part of the reasons that the EU wants to sustain and support Ukraine but it goes much further than this the EU has understood essentially that there is something at stake regarding the rule of law regarding Democratic Fabrics regarding essentially the future security of Europe as a whole not just Ukraine but if we look at the larger picture the reason why I argued that Russia is particularly interested in Ukrainian resources regarding critical raw materials is that Russia is actually active not just in Ukraine but in a number of different theaters via other means via disinformation by a political influencing by industrial influencing as well to try and make sure that it essentially becomes a geoeconomic power broker for all energy and Industrial and critical Supply chains including food for that matter and potentially water in the future which will Define essentially the future of security not just from an industrial and economic perspective but Security in an age where there is essentially a number of climate disruptions coming our way so Russia has a very purview regarding a long-term game and that’s why we need to understand Ukraine as part of a larger chest game and part of a larger sort of Arsenal of war that Russia is waging against Europe against Ukraine and for its own Supremacy in the future and joining us now from Bucharest is Andre Kario he’s an International Energy expert and co-founder of SRA that’s a forum for sharing Su sustainability knowledge now what role did Ukraine’s natural resources play in Putin’s plans to invade you think thank you for having me so of course uh critical raw materials in general in Ukraine are not the main reason why Russia is is taking this unjustified war in Ukraine but it could be as you mentioned a significant benefit uh in a positive military scenario for Kremlin so a potential scenario in which Russia would control some of these regions that are uh rich in critical raw materials would basically reinforce Russia’s role uh in the global energy Commodities markets so apart from being still relevant on the fossil fuel uh resources side it would also increase its critical uh minerals portfolio which is critical as you mentioned to the energy transition process globally now but what would it mean if Russia was successful uh for let’s say the worldwide transition to Green technology if large parts of the lithium Market are in Russia’s hands so it’s important to understand from the beginning that Russia has also its own resources when it comes to critical raw materials when it comes to lithium but Russia was never able to scale up uh the mining the refining processes as well as the uh manufacturing that uh is based on these resources but its partnership with China would basically mean that together the two countries would reinforce the energy security dominance through Russia’s uh fossil fuel reserves and now through some critic additional critical raw materials and also through Chinese uh mining refining and Manufacturing uh experience because China controls this uh markets significantly uh but I think it’s also important to understand that in the scenario that we are talking about uh that would also affect the Western world’s uh capacity and the pace of the energy transition process it would limit basically access to supply of these critical raw materials which may lead to higher prices and equally I think it’s important to understand that it would would also affect Ukraine’s potential for reconstruction because after the war will would end uh Ukraine will aim to build back its economy and critical raw materials may play a significant role in that provided that uh Kev can actually uh benefit from that now many Western countries uh were betting that Ukrainian resources would help the West become less dependent on Russia and China you mentioned that now could Putin use these resources as a bargaining chip maybe if ke is pressured to accept an end to the war on Russia’s terms just to put a perspective on some numbers so the International Energy agency uh forecast that the demand for lithium alone will triple by the end of this decade will increase tenfold by 2050 so just to come back to your point U any player that controls a significant portion of the market for these critical raw materials today mostly in Chinese hands but uh that could change in this du that I’m talking about can have a higher geopolitical uh leverage of course and the energy geopolitics of Tomorrow will be based on the control uh the mining the refining of these critical raw materials so of course that can be one of the tools of kremlin’s toolbox in the future provided that uh they they will be able to control that and they will be able to design a framework where they can use that either uh through uh as you said through using them in the energy transition process or U um basically uh limiting supply for Western world that needs that uh intensively in the next few decades the energy expert Andre Kario there thank you very much thank you well for more now I’m joined by oric Bloom he’s a professor ameritus of economics and founder and CEO of the German lithium Institute he’s also considered to be an expert on economic Warfare Professor blo it’s good to have you with us do you think you Ukraine’s mineral riches especially its lithium deposits do you think they were Vladimir Putin’s main reason for invading Ukraine what do they mean they mean that his model of Finance financing his state will collapse with with the climate transition and with if it collapses with climate transition what do the result be it is that he is financially U down and so I think getting the lithium and other mineral resources where Ukraine is number 2 three four sometimes only one step behind Russia in Exploration is this very very rational way of trying to stabilize his his Rule and his his system his ocratic system do we know has Russia already already been able to access the lithium that is in the dep the deposits there in the donbass region um we don’t know of any refinement and for especially enrichment because the lithium you have in the donbas area is a lithium which is by average below 1% and you have to enrich it it’s the in these pites in these minerals you have to enrich it to 5.5 to 5.8% to sell it on the world World Market in order to process it in refineries and converters to lithium hydroxide monohydrate and that’s the battery Gr stuff and this would take Machinery that would take converters and we don’t know of any of these things being import deployed in Russia so what would Russian control of the donbass lithium what would it mean for the world’s energy transition away from fossil fuels or or would it have any impact well um if Russia gets the donbas especi and controls even more because in the center of Ukraine there is the uh doora block lithium deposit which is much richer and much U much better and much more exploitable and then of course the situation for Europe uh gets worse because Europe can could get most of the minerals necessary for energy transition from Ukraine and Ukraine by that could reconstru Finance the Reconstruction of it country which will cost much much more than the World Bank uh estimates so um if we can drive Putin out of all these areas it’s a big big benefit not only for energy transition in Europe but also the Reconstruction of Ukraine and that is of course what Putin doesn’t want yeah and uh let me add one word um even if he only controls donbas all the rest of the reason is at risk and do you want to invest if the region is at risk well it all of this makes Ukraine seem even that much more important to Europe right when you consider that it has this lithium even in the central part of the country which is still in you know Ukrainian hands if the EU wants to build a batteries industry it needs to have a free Democratic Ukraine that’s part of the EU right right exactly that’s what I always say and that’s what was our memorandum that we sent out yet last year and that’s why we think we have to support them because if we don’t support them it will cost much much more than anything else and that you see the intent of Putin because he doesn’t he wants the land not the people and they his strategy in his Warfare is just emptying the country just getting the uh uh the area yeah just emptying the country and then taking a bulldozer to see what’s beneath the ground obviously he knows what he will find yeah he knows it has all these things have all been explored under Soviet times yeah so the deposits that we know are all cat the craphy is all from Soviet times so they know well okay Mr Bloom unfortunately we’re out of time but we certainly appreciate your time and your valuable analysis tonight thank you come back again yeah byebye

As Russia’s war on Ukraine rages on, it stands to gain trillions of dollars in mineral and resources if it takes over the country — or even just hangs on to territory it has seized so far. Ukraine has huge deposits of lithium, in particular, a key mineral for batteries powering electric cars or smartphones.

0:00 Are Ukraine’s deposits of lithium a reason for Russia’s war?
2:01 Gracelin Baskaran, Director of the Project on Critical Minerals Security at the Center for Strategic and International Studies (CSIS)
7:44 Olivia Lazard, Fellow at Carnegie Europe and expert on geopolitics
11:57 Andrei Covatariu, Energy expert and co-founder of ECERA
16:05 Ulrich Blum, Founder and CEO of the German Lithium Institute and expert on economic warfare

#russia #ukraine #lithium

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