Ukraine has lost “the building blocks of its economy” and may find it difficult to exist as an industrialized nation in the aftermath of the conflict with Russia, the Washington Post reported on Wednesday.
The warning came in a feature article based on an analysis of the value of Ukraine’s hydrocarbons and valuable minerals which have come under Russian control amid the protracted conflict.
Russia controls over $12 trillion-worth of the resources that used to be under Kiev’s jurisdiction before 2014, according to SecDev, an Ottawa-based analytical firm. WaPo said coal accounts for the lions’ share of the sum. Some 30 billion tons of hard coal deposits with an estimated commercial value of $11.9 trillion were identified by the Canadian researchers, the newspaper reported.
“The worst scenario is that Ukraine … becomes more like one of the Baltic states, a nation unable to sustain its industrial economy,” Stanislav Zinchenko, chief executive of the Kiev-based economic think tank GMK, told the newspaper.
A senior Ukrainian official with the nation’s Geological Survey told WaPo that the lost reserve may be worth even more than the estimate.
SecDev, which counts various Western governments and organizations like US AID among its partners, warned that Russia’s seizure of Ukrainian natural wealth would have a profound impact on the European economic future, too.
“Unless they can rapidly diversify oil and gas sources and shift to renewables and nuclear, European countries will remain dangerously dependent on Russian hydrocarbons,” it said.
“Similarly, Europe will also remain highly dependent on China for rare earths, a country that already supplies the region with 98% of its current supply,” it added, referring to plans in the EU to have Ukraine develop rare-earth mineral extraction on its soil.
Heavy metals like neodymium, crucial for many modern technologies, are relatively abundant in earth crust but their extraction and refining are associated with serious environmental impact. For historic reasons, China became the world-leading producer of rare earths.
WaPo journalists toured a mine operated by a Ukrainian company, which, the newspaper said, conditioned the visit on an agreement not to reveal the site’s location or the surnames of workers.
Extracting the fuel “has become an act of patriotism” for the workers, the report said, adding that “should the towns between the mine and the front lines fall, there is little to separate the Russian troops from [them].” The story includes multiple photos of people working at the mine, with their faces clearly visible in some.
It’s not uncommon for Western officials and media to highlight potential wealth hidden in foreign nations that the US and its allies risk losing access to. During NATO’s withdrawal from Afghanistan a year ago, Pentagon officials and many news outlets cited the estimated $1 trillion to $3 trillion worth of minerals in the possession of the south-central Asian country. Those include copper, lithium, rare-earth elements, gemstones and other valuables.