MINEX Forum

Tag: Ukraine

  • Ukraine’s Rare Earth “Deal” with the US: More Political Theater than Economic Reality

    Ukraine’s Rare Earth “Deal” with the US: More Political Theater than Economic Reality

    As US Treasury Secretary Scott Bessent toured Ukraine this week, President Volodymyr Zelenskyy put forward a proposal for potential rare earth mining deals—reminiscent of the legendary “Potemkin villages.” This maneuver appears designed to court former President Donald Trump, who has suggested Ukraine’s rare earths could secure continued US military support.

    While a formal agreement may be announced during the Munich security conference, the reality of such a deal is tenuous at best. Ukraine does not currently produce rare earths, has no proven reserves, and is unlikely to become a significant player in the global market. Developing a rare earth mine would require either massive US funding or tax incentives, with little financial return.

    The numbers further undermine the proposal. The US annually imports just $200 million worth of rare earths, while Trump has speculated about securing $500 billion worth. Even the only major non-Chinese rare earth producer, Lynas, posted revenues of just $293 million last year.

    Moreover, despite their strategic-sounding name, rare earths are largely used in mundane manufacturing applications—fridge magnets and lighter flints account for more consumption than defense-related uses like missiles and lasers. The US’s relatively small manufacturing sector cannot absorb a significant share of global supply, even with optimistic projections.

    Some commentators have suggested the US may actually be eyeing Ukraine’s lithium or mineral sands. However, Ukraine’s lithium resources are modest at best, dwarfed by US reserves. Similarly, its ilmenite reserves are just 1% of the global total.

    Ultimately, while a rare earth agreement may bolster political ties and diplomatic optics, it is unlikely to reshape global minerals markets or offer tangible benefits for either side. The true advantage seems to lie in the political theater rather than economic substance.

  • Metinvest’s Kamet-Steel Plant Announces Major Investment Program for 2025

    Metinvest’s Kamet-Steel Plant Announces Major Investment Program for 2025

    Kamet-Steel, a subsidiary of Metinvest Group, has unveiled an ambitious investment program for 2025 with a total planned budget exceeding 2.5 billion hryvnias (approximately $59.8 million). This significant investment comes as the company continues its systematic work towards construction and reconstruction to improve production reliability and efficiency, despite the ongoing challenging wartime conditions.

    Key highlights of the investment program include:

    1. Major overhaul of Blast Furnace No. 9, which will receive nearly one-third of the program’s budget.
    2. A pilot project to construct an alternative power station using solar panels, marking Metinvest’s first venture into this type of renewable energy project.
    3. Implementation of 114 investment projects of varying scales throughout the year.
    4. Capital repairs of key equipment in main production shops.
    5. Modernization of the energy infrastructure, with a focus on constructing new water pipelines.
    6. Initiation of the first launch complex for a large-scale project to build a new blast furnace gas collector.
    7. Modernisation of the drive control system for continuous casting machine No. 1.

    Mikhail Koptev, Director of Capital Construction and Investments at Kamet-Steel, emphasized that this year’s investment budget is the largest in recent years. He stated that a significant portion of the funds will be directed towards supporting and upgrading core production equipment, which will serve as a springboard for further development and modernization of the enterprise.

    The company expects that the restoration of production capabilities will allow Kametstal to renew its presence in existing markets and expand into new ones, thereby generating additional profit.

    This investment program demonstrates Metinvest’s commitment to maintaining and improving its production facilities, even in the face of ongoing challenges. It also aligns with the company’s broader strategy of expanding its market presence and investing in green steel technology, as evidenced by its recent focus on North Africa and Turkey for future growth.

  • Metinvest’s Northern GOK Increases Product Output to Meet Orders from European Metallurgists

    Metinvest’s Northern GOK Increases Product Output to Meet Orders from European Metallurgists

    Northern GOK, part of Metinvest Group, has ramped up production of commercial products to fulfill orders from European steel manufacturers. The plant has launched a second pelletising machine to handle additional order volumes for European partners. Currently, both LURGI 552 A and LURGI 552 B machines are engaged in pellet production.

    The Pelletizing Plant #2 team prepared in advance for the increased production plans approved for the beginning of the year. To ensure equipment reliability, a complex of repair works was carried out on both pelletizing machines in the fall. The LURGI 552 B underwent equipment inspection and quarterly maintenance, including standard procedures to maintain key components. This improved machine reliability, ensured quality indicators were met, and allowed for higher loading today. Repair works were also completed on machine A in the fall, along with a major overhaul of the rotary reclaimer used for finished product loading.

    To fulfill European steel makers’ orders on time, the plant decided to launch both pelletizing machines simultaneously, rather than alternating their use as usual. Additional shifts for key workers on weekends and nights were organized to prepare and launch the second machine. This operating mode requires non-standard approaches and significant resources, as both machines need servicing, which is challenging in cold weather and with personnel shortages.

    The machines A and B are currently operating at productivities of 463 and 460 tons of high-quality pellets per hour respectively.

    Dmitry Malykh, Director of Production and Planning for Metinvest’s GOKs, noted: “The market dictates its rules, and we must maintain the company’s reputation and strengthen its competitiveness. It will be more challenging for Northern GOK teams, especially Pelletizing Plant #2, due to the changed regime. But our people meet such challenges with dignity, aware of their responsibility for the overall result. More production means more earnings and more taxes for the state to direct towards critically important areas during wartime.”

  • Ukraine’s Critical Materials Sector: Challenges and Investment Potential

    Ukraine’s Critical Materials Sector: Challenges and Investment Potential

    Ukraine’s critical materials sector was the focus of the “Strategic Resources of Ukraine” Conference, held within the framework of the Economic Growth Strategy until 2040. The event, developed by Boston Consulting Group in partnership with the We Build Ukraine think tank, assessed investment prospects and key challenges in the industry.

    The metals and mining industry remains a cornerstone of Ukraine’s economy, contributing 6.1% to GDP and 30% of total exports (as of 2021). Despite the country’s vast reserves and historically low-cost structure, the industry faces asset losses, infrastructure damage, and labor shortages due to the ongoing war. Ferrous metals mining, concentrated in the Kryvyi Rih basin, remains largely under Ukrainian control, while non-ferrous materials, including precious metals and rare earth elements, are crucial for sectoral growth. However, the war has shifted export dynamics, increasing dependence on raw ore exports and leading to profitability declines and logistical challenges.

    Globally, the demand for critical raw materials is intensifying, driven by their essential role in industrial production, technological development, and renewable energy. However, supply chains face high geographic concentration, long project development timelines, declining resource quality, environmental concerns, and climate risks.

    Investment in Ukraine’s mining sector is hindered by multiple barriers:

    • State policy gaps, including the lack of an updated critical materials strategy and an outdated mineral classification system.
    • Institutional shortcomings, such as fragmented geological data, secrecy in resource information, and complex land acquisition procedures.
    • Limited state support, with no fiscal incentives, war risk insurance, or export assistance for mineral companies.

    Despite these obstacles, Ukraine has significant potential to attract international investment in critical raw materials extraction, processing, and exports. The country must develop a long-term strategy to leverage its mineral wealth, strengthen economic independence, and accelerate green energy transition.

  • A bizarre mining business’s fake audit reveals the potential for fraudsters at Companies House

    A bizarre mining business’s fake audit reveals the potential for fraudsters at Companies House

    A multibillion-pound mining firm, Gofer Mining plc, has been exposed as a firm with a fake audit and a true threat to tax fraud in the UK.

    At first glance, Gofer Mining appears to be just another large corporation, with its headquarters located in Canary Wharf and interests in mining in various parts of the world, including Greece, Congo, Kenya, Greenland, Tibet and Ukraine. However, a closer inspection reveals the company’s true colors – it has not filed accounts for several years, and its director, the “Duke of Commonwealth,” appears to have declared his own country, the Union State of British Commonwealth.

    According to the company’s account files, Gofer Mining has nearly 4,000 employees and has issued over 10 million passports in its new country. Gofer Mining’s involvement in a high-stakes attempt to seize control of a Ukrainian goldmine in 2020 highlights concerns over weak checks and a lack of enforcement at Companies House, the UK’s official register of companies.

    Investigations conducted by Dan Neidle, a former senior tax lawyer and founder of the Tax Policy Associates thinktank, have revealed evidence suggesting that Gofer Mining’s accounts have been falsified. Further concerns arise from Neidle’s findings that Gofer Mining was audited by a firm linked to its own director, Michail Roerich, rather than an independent auditor. There is no evidence of the named auditor, accounting firm Smith Barclay LLP, and its address is completely fake.

    Gofer Mining has a complex network of other companies associated with it, collectively claiming to have billions of assets on their balance sheets or tied up in shares. Furthermore, the firm has a past association with the now-defunct British Technology Bank, which claimed to be part-owned by the Bank of England.

    Roerich denied any involvement in falsifying the company’s accounts and instead stated that the company was being exploited by criminals. However, an investigation by The Observer found that the company’s Auditor, James Whitelaw, has no trace and the named accountancy firm, Smith Barclay LLP, was actually an offshoot of his partner, Roerich’s, current employer. Moreover, a warning notice from the FCA has also noted non-autorisation. Gofer Mining remains active despite prompt action being urged.

    The case highlights concerns over weak checks and a lack of enforcement at Companies House and questions around the veracity of audited accounts in the UK. Neidle stated that the UK is a “business centre” that fraudsters find particularly vulnerable and allured by Companies House’s access, independence, and reputation. Therefore, improvements are necessary to prevent fake auditors and document arrangements. Campaigners including Dan Neidle, warn that Companies House should not leave loopholes like loopholes against fraudulent entities.

    In response to the allegations, Companies House stated that they take fraud allegations seriously and that they are developing systems and processes to determine the accuracy of information.

  • Ukraine’s Critical Materials Sector: Challenges and Investment Opportunities

    Ukraine’s Critical Materials Sector: Challenges and Investment Opportunities

    Ukraine’s critical materials sector is at a crossroads as industry experts and policymakers seek solutions to investment barriers and economic growth challenges. The recent conference, Strategic Resources of Ukraine: Scenarios for the Development of the Subsoil Use Industry, held as part of the Economic Growth Strategy of Ukraine until 2040, outlined key issues and opportunities in the mining sector. The event was organized in collaboration with the Boston Consulting Group and the think tank We Build Ukraine.

    Ukraine’s mining industry, a major contributor to GDP and exports, is facing significant obstacles, including asset losses, supply disruptions, and infrastructure damage due to the ongoing conflict. While the Kryvyi Rih basin remains under Ukrainian control, non-ferrous metals, including rare earth elements and precious metals, present potential growth areas. However, challenges such as outdated geological data, a lack of strategic policies, and complex land acquisition processes hinder investment.

    On a global scale, access to critical raw materials is essential for industries, technological progress, and renewable energy development. However, risks such as high geographic concentration of production, lengthy project development times, and environmental concerns contribute to market volatility.

    To attract investors, Ukraine must address several barriers, including the absence of a clear state policy on critical materials, outdated classification systems, and limited support for businesses seeking mining rights. Additionally, the country lacks fiscal incentives, export support, and mechanisms to insure against war-related risks.

    Despite these challenges, Ukraine remains an attractive destination for investment in critical raw materials. By creating economic clusters and strengthening policies, the country can enhance its economic resilience, improve energy independence, and attract international investors. A strategic approach to resource development could unlock Ukraine’s vast raw material potential, contributing to long-term economic stability.

  • Ukraine’s Steel Industry Faces Crisis After Closure of Last Coking Coal Mine

    Ukraine’s Steel Industry Faces Crisis After Closure of Last Coking Coal Mine

    Ukraine’s steel producers are scrambling for alternatives after the country’s last operating coking coal mine in Pokrovsk shut down on Jan. 13. Metinvest Group, the mine’s owner, halted operations and evacuated workers as Russian forces advanced on the Donetsk Oblast town.

    The Pokrovsk mine, valued at around $1.8 billion before the war, was the last Ukrainian-controlled source of coking coal, a critical raw material for steelmaking. With its closure, domestic steel producers must now rely on costly imports, threatening Ukraine’s global competitiveness in the industry.

    “To produce 7.5 million metric tons of steel in 2024, we would need to import 1.9 million tons of coal. We have doubts whether such quantities can be secured, and import costs will further strain steelmakers,” said Oleksandr Kalenkov, head of Ukraine’s steelmakers’ association.

    Once a global top-10 steel producer, Ukraine has slipped below 20th place since Russia’s full-scale invasion. Annual coke production plummeted from 23.7 million tons in 2013 to just 2.7 million tons in 2023, reflecting the loss of key production sites in occupied territories.

    With no immediate domestic alternative, steelmakers, including Metinvest and ArcelorMittal Kryvyi Rih, will turn to imports from Poland, Australia, and the U.S. However, the added costs—estimated at $50 per ton for Australian coking coal—will raise steel production expenses by 11%, squeezing already thin profit margins.

    Before the war, the Pokrovsk mine supplied 66% of Ukraine’s steel industry with coking coal. Finding a replacement will require nearly 3 million tons of imports, but logistical and economic challenges loom large. Poland, the primary source of Ukraine’s coke imports (85% in 2024), has limited export capacity. Meanwhile, shipping coal from overseas can take over six weeks.

    Despite the industry’s struggles, steel remains a cornerstone of Ukraine’s economy, contributing 5.7% of GDP in 2023. While production grew 21% last year, forecasts for 2025 suggest a sharp decline. Without Pokrovsk, steel output could drop to as little as 2-3 million tons, potentially cutting 1% off GDP.

    Although global coking coal prices are currently low, Ukraine’s reliance on imports will inflate costs, impacting post-war reconstruction efforts. With domestic mining investments unlikely during wartime, Ukraine may eventually be forced to import steel itself, further increasing reconstruction expenses already estimated at nearly $500 billion.

  • Ferrexpo shares plummet 51% following $3.8 billion Ukrainian civil claim

    Ferrexpo shares plummet 51% following $3.8 billion Ukrainian civil claim

    Ferrexpo’s shares experienced a sharp decline, falling by as much as 51%, after the company announced that its Ukrainian subsidiary, Ferrexpo Poltava Mining (FPM), is facing a 157 billion Ukrainian hryvnias ($3.8 billion) civil claim in Ukraine. The claim was made due to allegations of illegal mining and the sale of subsoil, which has purportedly caused environmental damage.

    Ferrexpo, a Swiss-based iron ore producer listed in London, faced its most significant intraday drop on record, before recovering some losses to 23%. Previously, in mid-January, Ferrexpo responded to allegations made by the Prosecutor General’s Office of Ukraine against four senior managers of FPM, which concerned suspicions of illegal mining and sale of waste products.

    According to Ferrexpo, these minerals cannot be classified as a separate mineral resource. Furthermore, the company has stated that waste products have been sold for several years, and all activities were consistently inspected by the state. FPM plans to rigorously defend itself in the Ukrainian courts.

    Ferrexpo’s Poltava operation, their largest iron ore mine, is located in central Ukraine. Prior to the Russian invasion of Ukraine in 2022, Ferrexpo PLC was the world’s third-largest exporter of iron ore pellets. This is not the first time Ferrexpo has faced controversy related to its Ukrainian operations, further highlighting the delicate nature of the situation and the potential challenges to overcome.

  • Ukraine Open to Rare Earth Mining Collaboration: President Zelensky

    Ukraine Open to Rare Earth Mining Collaboration: President Zelensky

    President Volodymyr Zelensky stated that Ukraine is open to mining rare earths in partnership with allies, during a press briefing. This follows comments by U.S. President Donald Trump about Washington’s interest in Ukrainian rare earths in exchange for aid.

    Zelensky emphasised the importance of developing mineral resources with partners who support Ukraine militarily and economically. He noted that this collaboration is crucial to push back against Russian influence and prevent other adversarial nations, such as Iran or North Korea, from gaining control of these resources.

    Ukraine is home to 20 critical minerals and metals essential for industries like aerospace and electric vehicle manufacturing, including titanium and lithium. With the global shift towards renewable energy, demand for rare earth elements, such as cerium, yttrium, lanthanum, and neodymium, has surged.

    Trump’s interest in Ukraine’s minerals is likely driven by China’s current dominance in the rare earth market. Zelensky’s comments also reflect concerns about the future of U.S. aid under President Trump, who has criticised previous administrations’ support for Kyiv.

    The U.S. remains the largest supporter of Ukraine’s defence, providing over $91 billion in aid since 2022.

    As the global demand for rare earth minerals continues to rise, Ukraine’s mineral resources are likely to play an increasingly central role in geopolitics, making partnerships like the one suggested by Zelensky a key part of the country’s strategic future.

  • Trump Suggests Ukraine Pay US Aid with Rare Earth Minerals

    Trump Suggests Ukraine Pay US Aid with Rare Earth Minerals

    President Donald Trump proposed on Monday that Ukraine compensate the United States for its substantial financial support in the ongoing conflict with Russia by supplying rare earth minerals, a critical resource for advanced technologies.

    Speaking to reporters at the White House, Trump emphasized the potential for an “equalisation” deal, referencing the nearly $300 billion in aid the United States has provided to Ukraine. “We’re telling Ukraine they have very valuable rare earths,” Trump stated. “We’re looking to do a deal with Ukraine where they’re going to secure what we’re giving them with their rare earths and other things.”

    The proposal highlights the strategic importance of rare earth minerals, a group of 17 metals essential for manufacturing electronics, electric vehicles, and other high-tech products. These minerals are crucial for power generation and motion technologies, with no known substitutes.

    While Trump did not specify exactly which minerals he was referencing, Ukraine does possess significant deposits of uranium, lithium, and titanium. However, the country is not considered a top-five global producer of these resources.

    The United States currently has limited rare earth mineral production, with only one operating mine and minimal processing capacity. In contrast, China dominates the global market for these critical minerals.

    The US Geological Survey identifies 50 minerals as critical for the country’s economic and national defense interests, including various rare earths, nickel, and lithium.

    The feasibility and potential diplomatic implications of Trump’s proposed mineral-for-aid exchange remain unclear, and further details have not been provided.