Admin06 April, 2023
Mining Industry of Ukraine
The mining industry 1n Ukraine has played a significant role in the country’s economy Over the years. This report provides an overview of the industry, with a focus on the current state of the industry, the types of minerals mined in Ukraine. The report also examines the environmental and social impacts of mining, the government policies affecting the industry, and the future prospects for the mining sector in Ukraine.
The report finds that Ukraine has Significant deposits of various minerals, including coal, iron ore, manganese, and titanium. Coal mining is the most significant sub-sector of the industry, accounting for a large portion of Ukraine’s energy needs. However, the mining industry in Ukraine has faced several challenges, including outdated equipment, environmental concerns, high production costs and Ukraine-Russia war. The ongoing conflict in Ukraine between the Ukrainian government and Russian-backed separatists in the Donbass region, along with the annexation of Crimea by Russia, has created significant instability in the region. The conflict has had a significant impact on the mining industry in Ukraine, with mines and processing plants being forced to close due to the conflict.
The report highlights the risks and challenges facing the industry, such as the volatility of global commodity prices, the need for significant investment in infrastructure and effects of war with Russia. Overall, the report concludes that the future of the mining industry in Ukraine will depend on the government’s ability to create a conducive environment for mining investments while addressing environmental and social concerns.
1. Overview of the Mining Industry
The mining industry has played a significant role in Ukraine’s economy for centuries, with the country’s rich mineral resources attracting both local and foreign investment. The industry began to take shape in the late 19th century when large deposits of coal were discovered in the Donets Basin in eastern Ukraine. This led to the development of the coal mining industry, which became a major source of energy for Ukraine and the wider region.
In the early 20th century, the industry expanded to include other minerals, such as iron ore, manganese, and titanium. During the Soviet era, the mining industry was heavily centralized and state-owned, with significant investment in mining infrastructure and equipment. The industry was also a major source of employment for people in Ukraine, with many workers employed in the coal mines and other mining operations.
Following the collapse of the Soviet Union in 1991, Ukraine’s mining industry faced significant challenges, including outdated equipment and a lack of investment in modernization and innovation. Despite these challenges, Ukraine’s mining industry has continued to play a Significant role in the country’s economy, with coal mining remaining the most significant sub sector, but it has faced new challenges in recent years. The coal industry has been impacted by declining demand from Europe as the continent increasingly favors cleaner energy sources. Therefore, Ukraine needs to adopt new technologies to improve efficiency and sustainability.
Looking ahead, the mining industry in Ukraine is expected to continue to evolve, with new opportunities for growth and investment in areas such as the development of new mineral deposits and the modernization of mining equipment. The industry will need to address ongoing challenges such as environmental concerns and the need for investment in research and development to ensure its continued success and competitiveness in the global minerals market.
2. Geology of Ukraine
Geology of Ukraine is featured by a complex structure, with several platform and folded tectonic units within its territory. The East European Platform, which is an ancient Precambrian structure, is the main platform structure in Ukraine. It is separated from the Scythian Plate and the Western European Platform by a system of troughs and depressions. The Scythian Plate and the Western European Platform are younger struetures, with the basement of the former being formed in the Mesozoic Period, which occurred between 252 million to 66 million years ago, and the latter being formed in the Paleozoic Period, which occurred between 541 million to 252 million years ago.
Ukraine’s folded structures include the Ukrainian Carpathians, which are located in the western part of the country and were formed due to young (Alpine) orogeny that began in the Neogene period and continues to this day. The Crimean Mountains, located in the southern part of the country, emerged in the Mesozoic era but collapsed later. Their rejuvenation occurred during the Alpine period (late Mesozoic), resulting in their fold-block patterns. Finally, the Donetsk Folded Structure, which arose due to Herzinian folding in the Paleozoic era, is another important folded structure in Ukraine. Overall, Ukraine’s geology is characterized by a diverse range of structures, including ancient and young platform structures as well as folded structures. This complex geological structure has played a significant role in the formation of Ukraine’s mineral resources, with the country being rich in minerals such as coal, iron ore, manganese, titanium, and others. Understanding the geology of Ukraine is essential for the exploration, extraction, and production of these minerals, as well as for managing the environmental impact of mining activities.
Figure 1. Geological Map of Ukraine
3. Types of Minerals
According to the Ukrainian State Service of Geology and Mineral Resources, as of 2021, Ukraine has approximately 20,000 deposits of various metallic and non-metallic minerals resources. The metallic minerals include iron ore, manganese, titanium, nickel, copper, and zinc, while the non-metallic minerals include coal, rock salt, sulfur, building materials, and various types of industrial minerals.
Table 1. Rich Mineral Resources Base
|Types of minerals found in Ukraine (out of 120 known)||117|
|Deposits of industrial importance||8761|
|Total output of mining industries||$11.7 billion|
Source: World Mining Data 2020 report, published by the International organizing committee of World Mining Congresses
The most significant metallic mineral deposits in Ukraine include:
Iron ore: The Krivoy Rog iron ore deposit is estimated to contain over 20 billion tons of iron ore
Manganese: The Nikopol Manganese Basin is estimated to contain over 2 billion tons of manganese ore
Titanium: The Inguletskiy deposit is one of the largest titanium deposits in Europe.
Nickel: The Pobuzske deposit is the largest nickel deposit in Ukraine.
The most significant non-metallic mineral deposits in Ukraine include:
Coal: Ukraine has one ofthe largest coal deposits in Europe, with the Donbas region producing both thermal and coking coal.
Rock salt: The Stebnyk deposit is one of the largest rock salt deposits in Europe.
Sulfur: The Lviv-Volyn Basin is one of the largest sulfur deposits in the world.
Ukraine’s mineral resources are a valuable asset for the country’s economy, with metallic minerals like iron ore and manganese playing a significant role in the steel industry, while non-metallic minerals like coal and sulfur are important for energy production and other industries.
3.1. Quantities of Minerals Mined
According to the State Service of Geology and Mineral Resources of Ukraine, the country has estimated reserves of the following minerals:
- Coal: 35.4 billion tonnes
- Iron ore: 18.8 billion tonnes
- Manganese ore: 1.2 billion tonnes
- Titanium ore: 458 million tonnes
- Zinc ore: 32.6 million tonnes
- Lead ore: 15.6 million tonnes
- Copper ore: 6.7 million tonnes
3.2. Mine Productions
Ukraine is a significant player in the global mineral resources market, with a rich endowment of metallic, non-metallic, and fuel minerals. The country is among the world’s top producers of several key minerals and is an important supplier to many countries around the world.
In terms of metallic production, Ukraine is the seventh-largest producer of iron ore globally and has significant reserves of manganese ore. The country is also a major producer of titanium concentrate, which is an essential raw material in the aerospace and aviation industries. These minerals contribute significantly to the country’s economy, generatıng revenue and providing employment opportunities.
In non-metallic production, Ukraine is a major producer of sulfur, which is used in various industries, including fertilizer production. The country is also a leading producer of graphite, a mineral that is essential in the production of lithium-ion batteries. Ukraine is also home to significant deposits of potassium salts, which are used in fertilizer production.
In terms of fuel production, Ukraine is a major producer of coal and a significant producer and exporter of natural gas. These minerals are essential sources of energy, contributing to the country’s energy security and providing an important source of revenue. The ranking of Ukraine in the world’s mineral resources market is crucial, as it helps to highlight the importance of the country’s mineral wealth in the global economy. Ukraine’s ranking reflects the country’s significant contribution to the world’s mineral production and underlines its importance as a reliable supplier of key minerals to many countries worldwide.
Table 2. Ukraine’s Place in the World by Minerals Extraction
|Metallic Minerals||Non-Metallic Minerals||Mineral Fuels|
|Iron – 7th place: 39 million
t (2.56% of global output)
|Kaolins – 6th place: 2.1
million t (5.03% of global
|Power plant coal- 12th
place: 21.6 million t (0.37%
of global output)
|Manganese – 9th place: 682
thousand t (3.38% of global
|Zircon – 11th place: 21
thousand t (1.4% of global
|Coking coal 14th place:
4.6 milliont (0.45% ofglobal
|Titanium – 6th place: 518
thousand t (7.06% of global
|Graphite – 9th place: 15
thousand t (1.43% of global
|Uranium – 9th place: 1.3 t
(2.13% of global output)
Source: World Mining Data 2020 report, published by the International organizing committee of World Mining Congresses
3.3. The role of minerals in the country's economy
Minerals play an important role in the Ukrainian economy, contributing to the country’s GDP and providing employment opportunities. The mining industry in Ukraine is a significant sector of the economy and contributes to the country’s overall economic growth. The country is rich in mineral resources, and some of the key minerals mined in Ukraine include coal, iron ore, manganese ore, natural gas, oil, sulfur, and titanium. Here are some of the ways in which minerals contribute to the Ukrainian economy:
Export earnings: According to data from the State Statistics Service of Ukraine, mineral products accounted for 29.6% of the country’s total export earnings in 2020. This includes iron ore, ferroalloys, titanium ore, and other mineral products.
Job creation: According to the Ukrainian Mining and Metallurgical Trade Union, the mining and metallurgical sector employed around 322,000 people in Ukraine in 2020. This includes workers in mining, processing, and related industries.
Infrastructure development: The mining and processing of minerals requires significant investments in infrastructure such as transportation, power, and communications. For example, the Ukrainian iron and steel industry invested around 11.5 billion Ukrainian hryvnia (approximately $410 million USD) in infrastructure in 2020.
Industrial development: According to the Ukrainian Ministry of Energy and Environmental Protection, the mining and metallurgical sector accounts for around 25% of the country’s industrial production. The sector is a key supplier of raw materials to domestic industries, including steel production, construction, and electronics.
4. Mining Companies
According to the State Service of Geology and Mineral Resources of Ukraine, of 2021, there were over 3,000 registered mining and quarrying enterprises operating in the country. These companies are involved in the exploration, extraction, processing, and marketing of minerals, including metallic, non-metallic, and fuel minerals. Some of the key players in the Ukrainian mining industry include state-owned companies such as Ukrayina Halnaftohaz and other private mining companies operating in the country. Important producers are given below on the basis of ore.
4.1. Gold Producers
- Ukrzaliznytsia – A state-owned railway company that operates a gold mine in the Kirovohrad region of Ukraine.
- PJSC Pokrovsky Mining and Processing Plant – A subsidiary of Polymetal International, a multinational mining company with operations in several countries. The Pokrovsky plant operates a gold mine and processing plant in the Poltava region of Ukraine.
- Avellana Gold- A Canadian mining company that operates the Buzhanskaya gold mine in the Kirovohrad region of Ukraine.
- VostGOK – A state-owned uranium mining company that also produces gold as a byproduct of its uranium mining operations.
4.2. Coal Producers
- DTEK -A private energy company that is the largest coal producer in Ukraine. It operates several coal mines in the Donetsk and Luhansk regions, including the Pavlograd, Dobropillya, and Bilozerska mines.
- State-owned coal mining companies – Ukraine also has several state-owned coal mining companies, including:
a. Dniprovska Coal Group -Operates several mines in the Dnipropetrovsk region.
b. Luhansk Coal – Operates mines in the Luhansk region.
c. Lvivvugillya – Operates mines in the Lviv region.
- Metinvest – A mining and metals company that operates several coal mines in the Donetsk and Luhansk regions.
- Krasnoarmeyskaya Coal Company – A private company that operates the Krasnoarmeyskaya and Novogrodovskaya coal mines in the Donetsk region.
- Volynvugillya – A state-owned coal mining company that operates mines in the Volyn region. Mine named after Surgay – A state-owned coal mining company that operates mines in the Donetsk region.
4.3. Iron Ore Producers
- Melinvest- A mining and metals company that is the largest iron ore producer 1n Ukraine. It operates several iron ore mines in the Kryvyi Rih region, including the Northern and Central GOK mines.
- Ferrexpo – A producer of iron ore pellets, with mining and processing operations located in the Kremenchuk region of Ukraine.
- Poltava Mining and Metallurgical Company (PMMC)- A producer of iron ore pellets, with mining and processing operations located in the Kryvyi Rih region of Ukraine ArcelorMittal Kryvyi Rih – A steel and mining company that operates an integrated steel plant and several iron ore mines in the Kryvyi Rih region of Ukraine.
- Ingulets Iron Ore Enrichment \Works (Ingulets GOK) – A producer of iron ore concentrates, with mining and processing operations located in the Kryvyi Rih region of Ukraine.
- Kryvyi Rih Iron Ore Plant (KZRK) – A producer of iron ore concentrate, with mining and processing operations located in the Kryvyi Rih region of Ukraine.
4.4. Manganese Producers
- Nikopol Ferroalloy Plant (NZF) – A state-owned company that is one of the largest manganese ferroalloy producers in the world. It operates several manganese mines in the Nikopol region of Ukraine and produces ferromanganese and silicomanganese alloys.
- Privat Group A private conglomerate that operates several manganese mines in the Ordzhonikidze and Nikopol regions of Ukraine, including the Ordzhonikidze and Marganets mines.
- Pokrov Mining and Processing Plant A subsidiary of the Polymetal International mining company, which operates a manganese mine and processing plant in the Ordzhonikidze region of Ukraine.
- Ukrainian Manganese Company (UMC) – A private company that operates several manganese mines in the Dnipropetrovsk region of Ukraine, including the Gvardevskoye and Ordzhonikidze mines.
4.5. Titanium Producers
- Velta – A private mining and processing company that operates several titanium and zirconium mines in the Dnipropetrovsk region of Ukraine. The company also produces ilmenite, rutile, and other titanium-bearing minerals.
- Irshansk Mining and Processing Plant – A state-owned company that operates several titanium mines in the Zhytomyr region of Ukraine. The company produces ilmenite, rutile, and other titanium-bearing minerals.
- Ukrainian Titanium Company (UTC) – A private company that operates a titanium and zirconium mine in the Kirovohrad region of Ukraine. The company produces ilmenite, rutile, and other titanium-bearing minerals.
4.6. Sulfur Producers
There are several sulfur producing companies in Ukraine. Here are some of the largest ones:
- Concern Stirol – Concern Stirol is a large chemical company in Ukraine that produces range of chemical products, including sulfuric acid and elemental sulfur. The company’s main production facility is located in the city of Horlivka in the Donetsk Oblast.
- Ostchem – It is another major chemical company in Ukraine that produces sulfuric acid and elemental sulfur. The company’s sulfur production facility is located in the city of Kalush in the Ivano-Frankivsk Oblast.
- Sumykhimprom: Sumykhimprom is a chemical company that produces sulfuric acid, elemental sulfur, and other chemical products. The company’s production facilities are located in the city of Sumy in the Sumy Oblast.
4.7. Zinc Producers
- ArcelorMittal Kryvyi Rih – ArcelorMittal Kryvyi Rih is a steel and mining company in Ukraine that produces a range of steel products, including galvanized and zinc-coated steel. The company’s main production facility is located in the city of Kryvyi Rih in the Dnipropetrovsk Oblast.
- Zaporizhzhia Zinc Plant – Zaporizhzhia Zinc Plant is a zinc smelting company in Ukraine that produces zine and other non-ferrous metals. The company’s main production facility is located in the city of Zaporizhzhia in the Zaporizhzhia Oblast.
- Ukrainian Mining and Metallurgical Company – Ukrainian Mining and Metallurgical Company is a mining and metallurgical company in Ukraine that produces zinc, lead, and other metals. The company’s zinc production facilities are located in the city of Lviv in the Lviv Oblast.
5. Future Prospects
The mining industry in Ukraine holds considerable potential for future growth and development. The country has vast reserves of mineral resources, including iron ore, coal, manganese, titanium, nickel, which can be harnessed for economic benefits. The Ukrainian government has also taken steps to address the challenges and risks facing the sector by creating a favorable business environment, improving infrastucture, and strengthening security measures. The country has also signed agreements with international companies to invest in mining projects, which will help to modernize the sector and boost its productivity. Additionally, Ukraine’s strategic location, close to major European and Asian markets, makes 1t an attractive destination for mining investment. The government’s efforts to increase exports and diversify the mining industry will also contribute to its growth potential. Therefore, with favorable policies, improved infrastructure, and strategic partnerships, the mining industry in Ukraine can look forward to a bright future with significant prospects for growth and development.
5.1. Potential opportunities for growth in the mining industry
The mining industry in Ukraine has significant potential for growth and development through modernization, development of new resources, and increasing exports. Many of Ukraine’s mines are in need of modernization, presenting an opportunity for companies to invest in new equipment and infrastructure to improve safety, efficiency, and productivity. Ukraine has significant potential for the development of new mineral deposits, particularly in the fields of rare earth metals and lithium. By increasing exports of minerals such as iron ore, coal, and ttanium, Ukraine could generate significant revenue and drive growth in the mining sector. Additionally, the exploration of unconventional resources such as shale gas and oil presents new opportunities for growth and investment in the mining and energy sectors. However, regulatory issues and environmental concerns must be addressed to fully realize the industry’s potential.
5.2. Potential risks and challenges facing the mining industry
The mining industry 1n Ukraine faces several risks and challenges that can impact its growth and development. Regulatory uncertainty, infrastructure challenges, and security risks are some of the major challenges facing the sector. Ukraine’s mining industry 1s subject to a complex regulatory environment that creates uncertainty and makes it difficult for companies to plan and invest. Additionally, infrastructure, such as railways, ports, and roads that the mining industry heavily relies on, is in poor condition and requires significant investment to upgrade. This can lead to delays and increased costs for companies operating in the sector. The ongoing conflict in eastern Ukraine creates security risks for companies operating in the mining industry. The conflict has disrupted supply chains, damaged infrastructure, and led to a decline in investment in the sector. Many mining operations in the eastern regions of Donetsk and Luhansk have been disrupted or shut down due to the conflict, resulting in a decrease in production and revenue for companies operating in the area. Additionally, the conflict has created security risks for companies operatıng in the affected regions, increasing costs for security measures and insurance. The conflict has also contributed to the regulatory uncertainty in the country, which has made it difficult for companies to plan and invest in the long term.
In conclusion, it can be observed that the mining sector in Ukraine has a pivotal role in the
country’s economy, contributing significantly to its Gross Domestic Product and providing employment opportunities. Ukraine’s rich mineral resources, such as iron ore, coal, manganese, titanium, nickel have been crucial to the country’s industrial development and the production of steel and other metals. The mining industry has also been a major source of revenue, with mineral exports contributing to Ukraine’s trade balance. However, the industry is not without its challenges, including regulatory uncertainties, infrastructure deficiencies, and security risks. Nonetheless, the potential for growth and development in the sector remains considerable. By upgrading existing mines, exploring new resources, and increasing exports, the mining industry can generate substantial revenue and stimulate growth in the Ukrainian economy. Ultimately, the mining sector will continue to play a vital role in Ukraine’s economic development in the foreseeable future.
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