Tuesday, July 26

With so much potential wealth, why is Ukraine so poor?

The author mentions the Russian interest in the incredible wealth of the subsoil in Donbass. The Russians can stand in line; everyone and his uncle must have been interested in developing that land -- except, it seems, the Ukrainians themselves.  What have those people been doing all these years? Very mysterious, it seems to me.     

Donbass: why is it so disputed?| ILLUMINATION | Medium

Everything depends on the riches of its subsoil

By Annalisa Vibio
April 20, 2022

The military aggression by the Kremlin goes far beyond the desire to recover the identity of the ancient Slavic people of the Rus’. Behind this political facade, in fact, there are practical and economic reasons. Putin’s goal is mainly to lift the Russian economy and solve its difficulties by targeting the mineral wealth of the Donbass.

This region, in the east of Ukraine, can indeed be considered as the industrial heart of the country, as it is rich in mineral deposits, oil and, at the same time, famous for its coal reserves. The most exploited area extends for about 23,000 square km south of the Donets River, but the areas that have coal in the subsoil also cover several kilometers overst [sic], up to the Dnieper River.

In short, the Donbass has always been one of the most economically advantaged areas in Ukraine. Before 2014, before the self-proclaimed Republics of Donetsk and Lugansk caused the separatist conflict, the region was worth 14.5% of the nation’s GDP and produced 25% of exports. Until Frebruary, low-intensity warfare has however, then brought tragic consequences. In addition to the collapse of industrial production by 70% or the railway lines and roads destroyed, in seven years the number of victims has reached 14 thousand.

What thus is the Donbass treasure?

Gas and lithium

The Donbass or all the territories bordering the Dnieperare rich in gas fields, discovered starting from the 1950s. 90% of neon gas comes from the region, which is the basis for electronic chips. Iceblick is therefore the company, founded 32 years ago in Odessa, which produces 65% of the world’s neon. For this reason, it is Silicon Valley’s preferred supplier.

Connected to neon, Donbass is also important for lithium, a fundamental component for electric car batteries. The Australian group European Lithium, in Donetsk, in the days preceding the outbreak of the war, had just closed an extraction contract. Similarly, Chinese interests were also coming to the area as the Chengxin company had just decided to finalize a concession.

Obviously, the Kremlin’s design thwarted all efforts.


According to the experts of the CNR of Rome, the rocks of the Donbass region are particularly valuable. In fact, lithium is not contaminated by other metals, such as zinc, lead or cadmium.

Other minerals are also present in the subsoil, as well as rare elements (cobalt, chromium, ziconium, molybdenum). These are particularly important for the production of optical fibers to catalysts. In addition, the Donbass includes 10% of the world reserves of iron, 6% of titanium and 20% of graphite. The Kiev geological service, before last February, was trying to attract 10 billion in investments.

Furthermore, Ukraine is the largest manganese reserve in Europe, with more than 2 billion tons, located mainly in the Dnipro basin. Finally, the nation ranks first on the continent for both titanium and uranium reserves. At the time of the Soviet Union, the country owned the monopoly for the production of concentrated titanium. Likewise, it is no coincidence that the main nuclear power plants have been built in these areas.

The Azovstal

The Azovstal steel factory became the symbol of the siege of Mariupol. Part of the Metinvest group, it was founded in 1837 and then relaunched in 1933. Strategically located in the heart of Europe, the industrial complex, now bombed and besieged, was technologically advanced and particularly efficient. Not surprisingly, at the time of the USSR, it supplied 50% of the steel produced in the Soviet Union. Its great strength was its proximity to the energy and raw materials supply funds, alongside the commercial port.

Thanks to its efficiency, tensions and low-intensity warfare have never hurt the turnover, which reached 2.7 billion euros last year, beating the other large Kryvorizhstal complex near Kiev. This was recently bought by ArcelorMittal.

Sources I was inspired by to write this article:

I am an Italian student who tries every day to improve her English. I really like writing and studying in this language, also to be able to reach more people. However, I still often run into mistakes. So, if while reading my article you have found some, do not hesitate to contact me, either through a comment or private note!



sykes.1 said...

The US coup d' état in 2014 installed a large number of former Soviet nomenclatura as oligarchs, who were financed by various Wall Street investment houses. They looted the economy. Even today, in the midst of a war for survival, the oligarchs are siphoning off US/NATO equipment, and selling it on the world black market.

Ukraine's poverty has it roots in the old Soviet economy. But the US has sabotaged any economic revival.

Pundita said...

Sykes -- They're all a bunch of crooks.