First in Minerals, U.S. Delegation Scours Ukrainian Mines for Early Projects

U.S. Delegation Explores Ukrainian Mineral Deposits for Strategic Investment

A U.S. delegation recently visited Ukrainian titanium, zirconium, and hafnium deposits to evaluate potential initial projects under the U.S.-Ukraine minerals deal. This marked the first such visit since the agreement was signed earlier this year, signaling a growing interest in Ukraine's mineral resources.

The delegation included representatives from the U.S. International Development Finance Corporation (DFC) and Ukrainian officials, including Economy, Environment, and Agriculture Minister Oleksii Sobolev. They toured the Byrzulivskyi Mining and Processing Plant and the Likarivske deposit in the Kirovohrad Oblast region of central Ukraine. These sites are owned by Velta Holding, a leading Ukrainian titanium producer.

Sobolev emphasized the importance of these visits in assessing the ground-level potential for future investments. He highlighted the need to consider economic development, environmental responsibility, and community growth when evaluating new projects.

Velta Holding has been mining titanium ore at the Byrzulivskyi site for over 14 years. The company also plans to produce titanium, as well as zirconium and hafnium, at the Likarivske deposit. These minerals are essential for fuel and control rods in nuclear reactors. From a geological perspective, the Likarivske deposit is an extension of the Byrzulivskyi site, according to Velta’s CEO, Andriy Brodsky.

In addition to titanium, zirconium, and hafnium, Velta will mine materials critical for construction, including clay, sand, and kaolin. Brodsky noted that offering an alternative source of critical materials outside of China is vital for American partners. He also mentioned that the additional products will be in high demand during Ukraine's reconstruction efforts.

The project is expected to create jobs and contribute to budgets at various levels. Titanium, one of the 34 key critical materials listed by the EU, is widely used in defense, aerospace, and technology sectors. With global tensions rising, demand for titanium is surging. Market intelligence firm Precedence Research predicts the titanium market will reach $53.65 billion by 2034.

Ukraine is among the top ten titanium producers globally, surpassing the U.S., although China dominates the market. Previously, both Washington and Brussels relied on Russian titanium imports, which accounted for nearly a third of America’s titanium rods and bars before the war. The full-scale invasion of Ukraine led to a titanium shortage in 2023 after the U.S. and EU sanctioned Russia’s state-owned titanium company VSMPO-AVISMA, causing a spike in titanium ore prices.

While the U.S. and EU still import some Russian titanium, the volume is decreasing each year as they seek alternatives. Ukraine is now positioning its titanium and other critical raw materials as a promising opportunity for Western investors following the signing of the minerals deal on April 30.

Since then, the DFC and Kyiv have established the framework for an investment fund, with the first board meeting held on September 3. The deal grants the U.S. special access to investment projects in Ukraine, covering natural resources, related infrastructure, and even defense projects. For the first ten years, profits from the reconstruction investment fund will be fully reinvested in the economy.

Contrary to some reports, the agreement does not secure automatic offtake rights for the U.S. Instead, it guarantees Washington the right to be notified of potential deals and to negotiate. Companies are not required to grant preferential terms and remain free to sell to other buyers.

The board of managers is currently compiling a list of initial projects that align with the fund’s vision and objectives and can be feasibly developed. Deputy Economy Minister and board manager Yegor Perelygin stated that the board hopes to kickstart the development of three "high-quality" projects within the next 18 months.