Titanium is a metal as strong as steel, but almost twice as light and very resistant to corrosion. It is used in the aerospace, automotive, medical (implants, prosthetics, cosmetics), defense industries, as well as in the production of household, computer and mobile appliances. Titanium dioxide is a common pigment in the production of virtually everything, for example, an ingredient in decorative cosmetics and natural sunscreens. Anything that has a white color (pills, paint, even AirPods) contains titanium. Titanium is the fourth in the list of the rarest elements on our planet and is included in the list of critical raw materials of the EU. And Ukraine is among the top 10 countries with the largest deposits of this critical raw material.
According to the Ukrainian legislation, information on titanium ore reserves is a state secret. At the same time, the US Geological Survey estimates our reserves at 8.4 million tons as of 2022, which is 1.12% of the world’s titanium reserves. Many experts estimate explored and unexplored reserves of titanium ores in Ukraine at the level of 10%. According to JSC “United Mining and Chemical Company” (UMCC), Ukraine has about 20% of the recorded world reserves of titanium ores.
On the basis of placer deposits of titanium, the Irshansky GZK operates in the Zhytomyr region. In the Dnipropetrovsk region, titanium (ilmenite) concentrates are mined by the Vilnohirsk Mining and Metallurgical Factory. Both enterprises belong to the state-owned JSC “United Mining and Chemical Company”, which is almost the only state-owned enterprise in the Ukrainian titanium industry, along with about a dozen private ones, the largest of which is VKF “Velta” LLC.
The following deposits are also being developed: the Valky-Hatskivske deposit and the Isakivske section of the Mezhyrichne deposit in the Zhytomyr region, the Byrzulivske deposit in the Kirovohrad region, the Vovchanske deposit in the Dnipropetrovsk region, as well as the Western and Eastern sections of the Balka Kruta deposit, which is a technogenic zircon-rutile-ilmenite ore deposit sands of the Malyshevske deposit of the Dnipropetrovsk region.
Before the start of the full-scale invasion of the Russian Federation, Ukraine was one of the largest producers of titanium dioxide in the world, ranking sixth with a volume of 564,000 tons. According to the US Geological Survey, Ukraine’s share in the world production of ilmenite was more than 6%, rutile – almost 15%. Part of the raw materials was processed into titanium sponge (from 6 to 12 thousand tons per year), metallic titanium and products made from it.
The enterprises of the titanium industry of Ukraine are territorially close together and are located in developed areas with a developed industrial structure and transport. This makes it possible to significantly expand the existing production capabilities for the extraction and processing of titanium and to create in Ukraine a full cycle of titanium processing with the production of products with high added value.
The European Commission noted 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 elements, is noted.
Accordingly, in order for investors, primarily private ones, to have the desire to invest in Ukraine, it is necessary to create attractive conditions for this. In 2021, the Decree of the President of Ukraine No. 306 put into effect the decision of the National Security and Defense Council of Ukraine “On stimulation of the search, extraction and beneficiation of minerals that are of strategic importance for the sustainable development of the economy and defense capability of the state”, which includes titanium ores. And on March 28, the Law of Ukraine “On Amendments to Certain Legislative Acts of Ukraine Regarding the Improvement of Legislation in the Field of Subsoil Use” dated December 1, 2022 No. 2805-IX entered into force. This law creates new rules in the field of subsoil use and effectively restarts the industry in order to develop and attract investment.
Nevertheless, the new law does not solve the entire range of problems of the investment attractiveness of the subsoil exploitation industry in Ukraine. For the systematic attraction of investments in the titanium sphere, it is necessary to ensure favorable conditions for both potential investors and existing market players and the state:
- to provide the defense industry and the military-industrial complex with high-quality titanium products;
- create prerequisites for the production of titanium products with high added value by forming a complete cycle of titanium processing;
- carry out technological modernisation of titanium industry enterprises using energy-efficient and environmentally friendly processing and production technologies;
- intensify the development of the titanium industry, improve its investment attractiveness, facilitate access to debt capital and other financial and economic instruments;
- to strengthen Ukraine’s position in the world market for the supply of titanium products, its economic and scientific ties with strategic partners, such as the EU, Great Britain, the USA and other allies;
- stimulate the development of human potential and the educational and scientific base, implement programs on inclusiveness and gender equality.
All of the above can be achieved through further deregulation of the market, the introduction of effective financial and economic instruments (crediting, state guarantees, etc.), the development of export potential, investments in the young generation of specialists, the introduction of international standards (in particular, regarding the assessment of JORC mineral reserves) and many other instruments.
But first of all, Ukraine needs a working and effective industrial policy, in particular regarding the development of the titanium industry.
Experts of the project “Development of Ukraine’s new Subsoil Code” are already working in this direction. Among the main tasks, planned for 2023, are the update of the research on investment barriers and risks for European investors in the Ukrainian subsoil sector, prepared by the Project in 2022, and development of the criteria for determining critical raw materials based on EU practice.
The Project “Development of Ukraine’s new Subsoil Code” is implemented by the Consortium consisting of experts from Projekt-Consult (Germany), MinPol (Austria) and the Better Regulation Delivery Office (Ukraine). This publication was produced with the financial support of the European Union. Its contents are the sole responsibility of the Project and do not necessarily reflect the views of the European Union.