Is the true motivation for the Russia-Ukraine war connected to rare earth metals and minerals?
That is the conclusion drawn by some as a renewed focus has been placed on the vast collection of lithium oxide and other minerals deep underground in Ukraine — many located in the regions Russia recently annexed and now controls.
Ukraine holds some of the world’s largest untapped reserves of titanium, iron ore, lithium, and coal — collectively worth tens of trillions of dollars, according to a recent report from The Washington Post.
Lithium is a critical component of electric vehicle batteries. Currently, EVs using lithium-ion batteries comprise 1.3 percent of the global transportation market. Analysts forecast that by 2030, at least 27 percent of vehicles will be powered by lithium-ion batteries and market penetration by 2050 will be 58 percent.
The Kleinman Center for Energy Policy estimates the global demand for lithium to grow between “400 percent and 4,000 percent in the coming years.”
Much of that growth is attributable to governments around the world pivoting to green economies that seek to ban vehicles powered by fossil fuels. But, because of the increased demand, lithium has been in short supply.
Amid the push for more EVs, lithium prices have gone up by as much as 600 percent, according to the New York Times.
Ukranian researchers estimate the country’s lithium oxide reserves at nearly 500,000 tons, making it one of the largest supplies on earth.
The sizable amount and skyrocketing demand for lithium has made Ukraine a target of “strategic importance” that attracted global attention, the New York Times reported.
Earlier this year, more than a dozen former military leaders sent a letter to U.S. Secretary of Defense Lloyd Austin urging the Department of Defense to prioritize securitization of natural resources.
"The national security imperative of creating sufficient mineral supplies to build future EVs, energy infrastructure from turbines to transmission, and modern aerospace and defense systems must include a robust and secure supply chain within U.S. control,” the officials cautioned.
“Adversary nations now use natural resources as diplomatic weapons and instruments of coercion to achieve their own strategic objectives, often to the detriment of our own security and freedom,” they stated. “Given EVs and wind farms require some six and nine times more critical minerals than traditional technologies they might displace, respectively, and defense systems increasingly rely on critical and rare earth minerals, the need for the United States to develop domestic mineral supplies is clear.”
Though many around the world agree on the growing importance to control this energy sector, not all defense officials are bullish on the idea that the primary motivation in the Russia-Ukraine conflict is rare earth metals and minerals.
“This may not be the main reason for the invasion, but undoubtedly Ukraine's mineral wealth is one of the reasons why this country is so important to Russia,” said Rod Schoonovevr, former director of global health at the National Intelligence Council in the Office of the Director of National Intelligence.
“Since there are no developed deposits, I highly doubt that lithium resources are the motivation for attacks in the Southeast,” Schoonover said. “But if this region falls under Russian control, lithium reserves would certainly be a co-benefit for the Kremlin. Certainly the rest of the world would have a say.”
Others question Moscow’s motivation in the conflict, given that just a week before President Vladimir Putin announced the invasion was when Ukranian researchers published their findings of massive lithium deposits. Additionally, during a time of global expansion of EV production, Russia has overseen a decline in its own lithium production.
In 2015, it was reported that Russia’s lithium shortage began after its only lithium production plant in Transbaikal was shut down. Analysts predicted it could take decades for Russia to become a top lithium producer again.
In 2018, analysts with Analytical Credit Rating Agency said, “We do not forecast a significant increase in lithium production in Russia in 2018-2022, as we do not see major projects in their final stages.”
“There is not enough demand from local and international players for Russian-origin lithium as metal from Argentina, Chile and Australia is cheaper and is already present in the market,” concluded Maxim Khudalov, director of ACRA's corporate ratings group.
Today, many of the contested regions within Ukraine are said to have significant deposits of lithium beneath the surface.
