In the Kirovohrad region of Ukraine, ilmenite—a vital mineral for titanium production—is extracted from deep sand deposits. This extraction process involves using gravity to refine the mineral into a substance that shines like a starlit sky. Ukraine is rich in these ilmenite reserves, primarily located in the heavy mineral sands that run for miles through the eastern part of the country, an area currently facing unrest due to ongoing conflicts.
Despite its potential, Ukraine’s minerals industry remains largely unexploited, hindered by both warfare and stringent state policies. This situation might be on the verge of transformation if a proposed agreement materializes between the U.S. administration and Ukraine, allowing for an exchange of critical minerals in return for continued military support from the Americans.
Within the central Kirovohrad region, the ilmenite open-pit mine presents a wealth of untapped deposits that its owner is eager to develop in partnership with U.S. enterprises. However, several obstacles must be navigated to capitalize on these resources, including financial costs, complicated licensing agreements, and the necessity of having security assurances in place.
At the Munich Security Conference, Ukrainian President Volodymyr Zelenskyy confirmed that he has prevented his ministers from signing any agreements regarding mineral resources with the U.S., citing that the current proposal fails to adequately safeguard Ukrainian interests. Business leaders familiar with the minerals sector also express doubt regarding the feasibility of such an agreement, pointing out that the capital-intensive nature of the industry means tangible returns could take years—or even decades— to realize. Concerns linger over the willingness of U.S. firms to invest in an environment where local policies have already discouraged domestic entrepreneurs.
Andriy Brodsky, CEO of Velta, a prominent titanium mining company, noted that security guarantees are crucial for this exchange to be successful. He believes that economic ties could incentivize stronger nations to ensure Ukraine’s defense against threats.
Establishing a deal that exchanges resources for military assistance may further solidify ties between Kyiv and the U.S. The United States is a significant consumer of critical minerals, including lithium and gallium, both of which Ukraine possesses in verified reserves. While President Trump has highlighted the need for rare earth elements, those resources are still poorly explored in Ukraine, according to industry experts.
Titanium, essential in sectors such as aerospace and defense, enjoys high demand, and sourcing it from Ukraine could decrease U.S. dependence on supplies from Russia and China. This exchange may also ensure a continuous flow of American weaponry to Kyiv, a necessity for countering potential future aggression from Russia.
However, the prospect of security guarantees continues to be a significant concern among U.S. businesses and Ukrainian stakeholders. An anonymous senior Ukrainian official revealed that while there is interest from American companies, they require assurances that their investments will be protected from the possibility of renewed conflicts. Brodsky maintains that the presence of U.S. business interests in Ukraine could serve as a defensive measure in itself.
Discussion around investments has shifted positively since Brodsky’s recent visits to Washington and New York, with many influential figures expressing optimism about potential partnerships. Velta has long collaborated with American firms, and Brodsky has begun discussions with companies that could become allies if an agreement is reached.
Historically, Ukraine has not been an attractive destination for foreign investors, largely due to restrictive government regulations, which do not incentivize international collaboration. Brodsky emphasizes the need for foreign enterprises to align with local partners to unlock opportunities.
American firms looking to tap into the market face a daunting bureaucratic landscape, as outlined by Ksenia Orynchak, director of the National Association of Extractive Industries of Ukraine. Collaborating with existing Ukrainian license holders may offer a more straightforward approach to entering the sector, but increased exploration and careful scrutiny of available data are necessary to ensure its authenticity.
Within the extraction site itself, ilmenite dust fills the air, with workers covered in soot as they engage in extensive extraction activities. The gravity separation technique employed here is vital for isolating impurities from the ore. Following a complex and financially challenging journey, Velta began with a $7 million investment motivated by an expired geological exploration license.
Complications linger around local perceptions of foreign investment, especially regarding the constitutional ownership of subsoil resources. Concerns have been raised among community members who worry about allowing external parties to manage valuable assets.
The skepticism surrounding the proposed arms-for-minerals deal reflects genuine apprehension, as some business leaders question its viability given the substantial initial investments needed. One prominent businessman expressed skepticism about the plan’s sincerity, questioning whether it will resonate with local economic realities, as entering the extraction sector often requires investments on a scale reaching billions.
The path forward remains uncertain, with both potential benefits and significant challenges ahead as Ukraine navigates its place in the global minerals market amid ongoing conflict and economic instability.
