What are “critical raw materials”, and what does Ukraine have to do with them?

Critical raw materials are minerals that are strategically important for the functioning of the EU economy, but their deposits on the territory of the EU are not sufficient to meet the EU’s needs. As a result, the EU has to import most of them, and this includes certain risks, such as the unreliability of suppliers, on which the economic security of the entire European region depends.

Critical raw materials are used in virtually all sectors of the economy related to electronics, health care, and green energy. Moreover, minerals belonging to the list of critical raw materials are found in things without which we cannot imagine our lives.

For example, lithium is the most common element in smartphone batteries. The main deposits of lithium are located in the territories of Chile, Australia, and Argentina. Or titanium – a metal as strong as steel but almost twice as light and very resistant to corrosion. It is used in the aerospace and medical (implants and prostheses) industries, as well as in cosmetics – titanium dioxide is a common ingredient in decorative cosmetics and sunscreens with natural components. Titanium is the fourth in the list of rare-earth elements on our planet, and its largest deposits are located in China, Japan, the Russian Federation, Kazakhstan, and the USA. Interestingly, Ukraine is among the top 10 countries with the largest deposits of this critical raw material.

In order to reduce the risks associated with the import of critical raw materials and to ensure the stability and continuity of the functioning of the EU economy, the European Commission approved the European Critical Raw Materials Act. This Regulation proposes a list of actions that will allow the EU to guarantee access to those minerals that are critical for the development of the European Union’s economy.

Among them, in particular, is the development of strategic partnerships.

On July 13, 2021, Ukraine and the EU signed a Memorandum on strategic partnership in the raw materials industry and a corresponding roadmap of measures. The memorandum envisages joint efforts of both parties to develop a green economy, create new business opportunities and jobs, increase Ukrainian production of “minerals of the future” and fuel and energy minerals, increase exports, and reduce imports of mineral raw materials.

The European Commission mentioned that Ukraine is a significant global supplier of titanium and can become a potential supplier of more than 20 elements from the list of critical raw materials to the EU. Accordingly, among the planned measures of the EU in the field of trade, support for investments in the mining and processing industries of Ukraine, which work with rare-earth elements, is mentioned.

In order to create the best regulatory conditions for Ukraine’s cooperation with the EU, the team of the EU Project “New Subsoil Code of Ukraine” is working. Among its tasks are the analysis and determination of the obligations of Ukraine as a candidate country for joining the EU in the field of subsoil use and critical raw materials, analysis of the Act on European raw materials until 2030, development of criteria for critical raw materials based on the EU practice, and more.

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The project is financed by the European Union and implemented by the Consortium consisting of experts from Projekt-Consult (Germany), MinPol (Austria) and the Better Regulation Delivery Office (Ukraine). This publication reflects the position of the Project and does not necessarily coincide with the position of the European Commission.