Ukrainian Resource Base: current state, features, export potential

The Chamber of Commerce and Industry Israel-Ukraine is an Israeli non-profit organization which main goal is to develop trade and economic relations between Israel and Ukraine. The Chamber serves as a platform for interstate dialogue and bringing together representatives of the business communities of our two countries. In connection with the new world realities emerging after the Covid-19 pandemic and its global economic consequences, we would like to familiarize the international business community with relevant information on the resource base available in Ukraine, its state and prospects.

Ukraine is one of the most mineral-rich regions. For example, there are 120 types of mineral deposits consumed by a human, and almost all of them (117 types) are extracted in Ukraine. In addition to the minerals themselves, their components and industrial minerals are actively developed here. Iron, manganese, ilium-zirconium, and uranium ore mining, coal mining, development of kaolin, clay, graphite, sulfur, lead, rock salt, cement, and construction raw materials, as well as facing stone are the most active in the country. It is introduced new technologies of extracting main energy resources – natural gas, oil, and turf. Along with mining Ukraine exports manganese iron, mercury, graphite, clay, sulfur, cadmium and various raw materials for the production of building materials and glass to meet its own needs. The natural resources of Ukraine make it one of the high potential regions for investing in the resource-extracting industry.

Energy resources of Ukraine

Ukraine is actively engaged in the development of projects in the energy sector, due to which in the country there was made the modernization of production of combustible minerals, hydropower resources, biofuels, and nuclear raw materials.

Caustobioliths

 

Ukraine is known as a country where there are quite large deposits of all types of oil and gas resources: oil, peat, natural gas, shale, and condensate. There are several oil and gas regions in the mining industry:

• Dneprovsko-Pripyatskaya is the main gas and oil-producing region with a large potential of hydrocarbon resources. There are oil and gas deposits in the south-west, and gas deposits are in the south-east. At the same time, due to Devonian deposits, there are prospects for this region development;
• Baltic-Preddobrudginskaya with oil and gas deposits;
• Carpathian region, which is considered to be the leading oil and gas producing area in the western parts of Ukraine with two clearly defined zones. The inner zone contains oil and gas-condensate deposits, while the outer zone contains gas reserves in platform sediments;
• The Black Sea-North Caucasus-Mangyshlak region with gas-producing areas near the Black and Azov Seas in all complexes of formations and deposits. Besides, there is an oil promising area of the Predobruzhinsky deflection with oil-and-gas-producing strata on land and water area.

The most favorable area for discovering new hydrocarbon deposits is in the south of Ukraine in the Black and Azov Seas area. There are also deposits at great depths in the east and west of Ukraine. The energy potential of the country is connected not only with oil and gas but also with the development of coal deposits in Donetsk (currently, coal production is minimal) and Lviv-Volynsk basins, where coal deposits contain more than 80% of methane.

Despite mentioned above, Ukraine’s fuel resources are still scarce, covering only 20% of its own needs in gas, 10% in oil, and 20% in coal. Every year there is a decrease in reserves in the investigated areas, which is connected including other things, with exhaustiveness and deterioration of oil and gas development conditions, increase in the depth of mine workings, decrease in the capacity of productive coal layers and complication of mining and environmental conditions of field development. On the one hand, because of the decrease in the number of extracted fuel resources in Ukraine, this type of activity may seem unprofitable and not promising, but it is possible to start developing in new areas, which are still little explored and require investment by applying modern technologies. As a result, it can be achieved the intensification of production to meet the needs of the domestic market and exports.

Hydropower resources

Powerful hydroelectric stations have been built in Ukraine since Soviet times including Dnestrovskaya (which is considered the largest and most powerful in Europe) and Kievskaya. The planned installed capacity of already existed hydroelectric power plants for the next few years is 14.5 million kW, and the planned electricity production is 17 billion kWh, including the Dniester River and Transcarpathian region. Besides, the government looks into the possibility of production increasing by modernizing existed Hydroelectric stations and attracting middle-size river resources (at the end of 2019 the hydro potential of small and medium rivers in Ukraine amounted to about 30% of the total hydro potential of the state). The hydro potential of small rivers is 4 times higher than that of large waterways, so with their competent use and investment in hydropower, it is possible to achieve huge savings in fuel and energy resources (FER), and also export it.

Biofuel

Recently Ukraine has started to pay attention to renewable power resources which not only promote energy improving security and decreasing negative affect on the environment but enable to produce alternative power raw material (energy resources) for export. There are the following materials and natural resources for biofuel:

• Straw (wheat, rapeseed, corn). This is considered a good fuel due to its low relative humidity and high heat of combustion. Straw pellets are recognized as the most efficient and cheapest fuel (cost of 1 ton of straw – about 10 euros), suitable for both heating and grain drying;
• Husks produced by buckwheat, sunflower, and rice seeds and used as raw material for solid granulated or briquette biofuels. Such raw materials, especially during sunflower processing, have high potential due to the presence of oil plants in Ukraine, large sunflower plantations with high yields, and the ability to transport briquettes from the husk at any distance. About 80% of these biofuels are exported;
• Peat deposits are ecologically safe and easy enough to extract raw materials with a high heat of combustion due to 50% of carbon composition. A distinctive feature of peatlands is their ability to recover. In Ukraine, there are more than 3100 researched peat deposits, which contain 2.2 billion tons of reserves. The balance stock of peat in the country is 735 million tons;
• Bioethanol is another type of biofuel that is produced in Ukraine. It is produced at re-profiled sugar factories (for example, a factory in the Odesa region, which is being modernized to produce bioethanol from corn stalks and straw).

Nuclear raw materials

Ukraine is known all over the world as a nuclear state, where, also, the tariff for uranium energy is the lowest – about 2 cents. And that is even though Ukraine has carried out several works and adapted the Soviet units for the American fuel, after which the neighboring countries decided to re-develop the project of diversification of supplies.

Ukraine has everything for nuclear power development: the largest uranium deposits, high-capacity nuclear reactors, repositories, and machine-building corporations for the production of special machinery and equipment, specialists. It is not surprising that nuclear power engineering is a strategic sector that provides half of the country’s electricity production.

Prospective uranium deposits are located in the Mykolaiv, Kirovograd, and Dnepropetrovsk regions, and the potential for concentrate production varies from 250 to 300 thousand tons, while currently there are no more than 16 thousand tons produced.

Minerals, non-ferrous metals, metallurgical and mining chemical feedstock

Mineral resources base in the country is one of the richest in the world and includes 7500 explored fields, where one can find manganese ore, clay, metallurgical raw materials, salt, sand, etc. Ukraine has one of the largest manganese ore reserves in the world (up to 20% of the planet’s resources is located in Nikopol) – it ranks second by this indicator, as well as iron ore (up to 7% of the world reserves can be found in the Kryvyi Rih basin, Kryvyi Rih and Kremenchuk). Nickel, titanium, and aluminum can also be found in these areas. Ukraine also has deposits of gold, which have not yet been explored – in the Transcarpathia region (except active gold mining in Muzhiyevskiy deposit) and Donbas. Deposits of mining and chemical feedstock meet the country’s demand in building materials and allow them to organize the export of resources – according to statistics, each fourth standard unit received by the country’s budget is earned through metallurgy and related industries.

And this is not surprising, as the planned volume of steel production for this year is more than 22.3 million tons and most of it is exported. Besides, Ukraine is known all over the world as a supplier of titanium (90% of more than 9 thousand tons of titanium products and the raw material itself is exported), aluminum (about 80% of production is sold abroad) and nickel (the main buyer is Greece, where more than 8 thousand tons of ore are supplied).

Ukraine is one of the leaders in sulfur mining and its exporting, as well as in the exploration of places with large deposits of rock salt (there are 9 billion tons of the explored reserves, but there are also new deposits, so the reserves can be called almost unlimited), which is necessary for various types of industries, including light, chemical, and food. It is elaborated in the halite of the Donbas and Transcarpathia region, as well as in highly mineralized underground waters of the Pre-Carpathian region and estuaries of Black and Azov Sea.

Refractory and bentonite clay, flux limestone, dolomite, dry sand, graphite, and zeolite are produced for the metallurgical and chemical lines of industries. Deposits are scattered all over Ukraine – in Donbas and the Dnieper region, Transcarpathia, and south-eastern region. The country has also explored deposits of structural (over 8 billion cubic meters) and facing (250 million cubic meters) stone. They are granite, basalt, labradorite, marble, tuff, sandstone, and limestone, the rational extraction of which can bring real profits.

Resources of semiprecious and precious stones in Ukraine are not yet sufficiently explored and studied, but some mineralogical findings allow us to conclude that there are prospects with topazes, crystals, amber, rhodonite, shale, opals, amethyst, and other gems.

Water resources

There is enough water in Ukraine and it can deliver this resource to neighboring countries, as the annual water demand of the population and industry of the country is about 15 billion cubic meters, and the total amount of water reserves available for use – 88 billion cubic meters (in dry years, this figure dropped to 50). The water-economic complex consists of more than 1,000 reservoirs, 50,000 ponds, 20,000 lakes, 60,000 rivers, 5 main canals to supply dry regions, and more than 5 million hectares of reclaimed land. Also, the country is implementing State targeted programs for environmental rehabilitation and water sector development

Land and forest resources

In terms of land resources, Ukraine holds leading positions in the world, as the total area is 60 million hectares, more than 70% of which is developed. Most of the land is occupied by agricultural land, which grows grain, vegetable, and fruit crops, as well as cattle breeding and grazing. Cropland is represented by three types of black earth: common, typical, and southern. The bio productivity of this land is very high and it ensures high crop yields.

Forest areas cover about 13% of the country’s total area (10 million hectares), with most of it located in the west and the Carpathians, where relict forests grow. In other regions, forests are created artificially, so the trees are young or middle-aged. There are such trees as pines, spruce, oak, and beech, which are suitable for use both as wood building materials, fuel resources, and raw material.

Agricultural industry resources

Ukraine is a major agricultural power and a leading supplier of food around the world. This is due not only to the renewal and modernization of agricultural methods but also to the excellent climate and the availability of resources for the development of agro-industry.

Climatic conditions in Ukraine, humidity, and temperature are the determining factors for high and stable yields of various crops.

Soil and land resource potential of Ukraine is huge. The country takes the leading place in the world in terms of the number of fertile soils per person – there are 1.4 hectares of land per one Ukrainian, half of which is arable and one third – black earth. For comparison, the average land area per person all over the world is less than 0.2 ha of arable land and 0.05 ha of black earth.

Ukraine is rightfully one of the most fertile countries, where the agrarian complex and agriculture are actively developing, including foreign investment. Besides, Ukraine is attractive as an energy-resource county. The huge resource potential of Ukraine allows to develop production, as well as to extract raw materials for export (nickel, aluminum, building materials, manganese, iron, rock salt, minerals, land, water and fuel, and energy resources, etc.) It can be stated with confidence that Ukraine is one of the richest countries in the world in terms of land, mineral, natural and recreational resources.

The Chamber of Commerce and Industry Israel-Ukraine will be glad to assist Israeli business representatives in establishing and developing trade and economic ties with Ukraine. If you have any questions, you can contact us using the contact details provided on our website.