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 among the regions richest in mineral resources. For example, 120 types of minerals consumed by humans are known, and almost all of them (117 varieties) are mined in Ukraine. In addition to the minerals themselves, components of minerals and mineral raw materials of industrial importance are actively mined here. The country's most active mining activities include iron, manganese, ilment-zirconium, and uranium ores, coal mining, and the development of deposits of kaolin, clay, graphite, sulfur, lead, rock salt, cement and construction raw materials, and facing stone. The latest technologies are being implemented to extract key energy resources—natural gas, oil, and peat. Along with mining, Ukraine exports manganese iron ore, mercury, graphite, clay, sulfur, cadmium, and various raw materials for the production of building materials and glass to meet its own needs.

Ukraine's natural resources make it one of the most promising regions for investment in the resource extraction industry.

Energy resources of Ukraine

Ukraine is actively pursuing projects in the energy sector, which has led to the modernization of fossil fuel, hydropower, biofuel, and nuclear power production. This is being achieved by attracting investors and implementing modern technologies and production practices.

Combustible minerals

Ukraine is considered a country with significant reserves of all types of fossil fuels: oil, peat, natural gas, shale, and condensate. The extractive industry is divided into several oil and gas provinces:

• The Dnieper-Pripyat region is the largest gas and oil-bearing region with significant hydrocarbon resource potential. Oil and gas deposits are located in the southwest, while gas is found in the southeast. Furthermore, the Devonian deposits offer potential for development in this region.;
• Baltic-Preddobrudzhinskaya with oil and gas deposits;
• The Carpathian region, considered the leading oil and gas producing region in the western regions of Ukraine, has two distinct zones. The inner zone contains oil and gas condensate deposits, while the outer zone contains gas reserves in platform deposits.;
• The Black Sea-North Caucasus-Mangyshlak region includes gas-bearing areas near the Black and Azov Seas, spanning all formation and sediment complexes. Furthermore, the oil-prone Pred-Dobruzhinsky Trough, with oil and gas-bearing strata on land and offshore, is located here.

The most favorable region for discovering new hydrocarbon deposits is southern Ukraine, along the Black and Azov Seas. There are also deep-sea deposits in the east and west. The country's energy potential lies not only in oil and gas, but also in the development of coal deposits in the Donetsk (coal production is currently minimal) and Lviv-Volyn basins, where coal deposits contain over 801 Tcf of methane.

Despite the above, Ukraine's fuel resources remain scarce, covering only 20% of its own gas needs, 10% of oil, and 20% of coal. Each year, reserves in explored deposits are declining, due, among other things, to depletion and deteriorating oil and gas production conditions, increasing depth of mine workings, decreasing thickness of productive coal seams, and increasingly complex mining and environmental conditions at deposits. While the declining amount of fuel resources extracted in Ukraine may make this type of activity seem unprofitable and unpromising, by applying modern technologies, it is possible to begin production in new deposits that are still poorly explored and require investment. This could lead to intensified production to meet domestic and export demand.

Hydropower resources

Since Soviet times, powerful hydroelectric power plants (HPPs) have been built in Ukraine, including the Dniester (considered the largest and most powerful in Europe) and the Kyiv Hydroelectric Power Plant (HPPs). The planned installed capacity of existing HPPs in the territory for the next few years is 14.5 million kW, and the planned electricity generation is 17 billion kWh, including from the Dniester River and the Zakarpattia region. Furthermore, the government is considering increasing production by modernizing existing HPPs and tapping into the resources of medium-sized rivers (as of 2019, the hydropower potential of small and medium-sized rivers in Ukraine amounted to approximately 301 TP3T of the country's total hydropower potential). The hydropower potential of small rivers is four times greater than that of large waterways, so with their proper use and investment in hydropower, significant savings in fuel and energy resources (FER) can be achieved, as well as exports.

Biofuel

Over the past few years, Ukraine has begun to focus on renewable energy sources, which not only improve energy security and reduce environmental impacts but also enable the production of alternative energy sources for export. Ukraine has the following materials and natural resources for biofuels:

• Straw (wheat, rapeseed, corn). This is considered a good fuel due to its low relative humidity and high calorific value. Straw pellets are recognized as the most efficient and inexpensive fuel (the cost of 1 ton of straw is approximately 10 euros), suitable for both heating and grain drying;
• Hulls, the residue left over from the production of buckwheat, sunflower, and rice seeds, are used as a feedstock for solid granulated or briquetted biofuel. This feedstock, particularly from sunflower processing, has high potential due to the presence of oilseed mills in Ukraine, large sunflower plantations with high yields, and the ability to transport hull briquettes over any distance. Approximately 801 TP3T of this biofuel is exported.;
• Peat deposits are an environmentally friendly and relatively easy-to-extract raw material with a high calorific value due to its carbon composition. A distinctive feature of peatlands is their ability to regenerate. Ukraine has over 3,100 explored peat deposits, containing 2.2 billion tons of reserves. The country's balance peat reserves are 735 million tons.;
• Bioethanol is another type of biofuel produced in Ukraine. It is manufactured at repurposed sugar factories (for example, a plant in the Odessa region is being modernized to produce bioethanol from corn stalks and straw).

Nuclear raw materials

Ukraine is known worldwide as a nuclear power state, which also has the lowest tariff for uranium energy—approximately 2 cents. This is despite Ukraine having carried out a number of projects to adapt Soviet reactors to American fuel, after which neighboring countries decided to re-develop a supply diversification project.

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.

Promising uranium deposits are located in the Nikolaev, Kirovohrad, and Dnipropetrovsk regions, and the potential for concentrate production ranges from 250,000 to 300,000 tons, while no more than 16,000 tons are currently produced.

Minerals, non-ferrous metals, metallurgy and mining

chemical raw materials

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.

Refractory and bentonite clay, fluxing limestone, dolomite, foundry sand, graphite, and zeolite are mined for the metallurgical and chemical industries. Deposits are scattered throughout Ukraine—in the Donbas, the Dnieper region, Transcarpathia, and the southeastern region. The country also boasts proven deposits of building stone (over 8 billion cubic meters) and facing stone (250 million cubic meters of reserves). These include granite, basalt, labradorite, marble, tuff, sandstone, and limestone, the efficient extraction of which can generate substantial profits.

Ukraine's ornamental and precious stone resources have not yet been sufficiently explored and studied, but individual mineralogical discoveries suggest the presence of promising deposits of topaz, crystals, amber, rhodonite, slate, opals, amethysts, and other gemstones.

Water resources

Ukraine is well-stocked with water and is capable of supplying this resource to neighboring countries, as the annual water demand for the country's population and industry is approximately 15 billion cubic meters, and the total volume of water reserves available for use is 88 billion cubic meters (in dry years, this figure dropped to 50 billion cubic meters). The water management system comprises more than 1,000 reservoirs, 50,000 ponds, 20,000 lakes, 60,000 rivers, five main canals supplying low-water regions, and over 5 million hectares of reclaimed land. Furthermore, the country is implementing state-targeted programs for environmental improvement and water management development.

Land and forest resources

Ukraine occupies a global leadership position in terms of land resources, with a total area of 60 million hectares, of which over 701,000 hectares are developed. Most of this land is used for agricultural production of grain, vegetables, and fruit crops, as well as livestock breeding and grazing. Arable land consists of three types of chernozem: ordinary, typical, and southern. This type of soil has a very high bioproductive potential, ensuring high yields.

Forests occupy approximately 131,000 square kilometers of the country's territory (an area of 10 million hectares), with the majority located in the west and the Carpathians, where relict forests grow. In other regions, forests are artificially created, so the trees are young or middle-aged. Pine, spruce, oak, and beech predominate, making them suitable for harvesting timber for construction, as a fuel resource, and as a source of raw materials.

Agricultural production resources

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.

Ukraine is one of the most fertile countries, with a rapidly developing agricultural sector and agriculture. Furthermore, Ukraine is attractive as an energy resource power. The country's vast resource potential allows for the development of manufacturing and the extraction of raw materials for export (nickel, aluminum, construction materials, manganese, iron, rock salt, minerals, land, water, and fuel and energy resources). We can confidently state 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.