Ukraine’s Critical Minerals and Europe’s Energy Transition: A motivation for Russian Aggression?

Jul 21, 2022 | Andrei Covatariu
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Europe’s long-term strategy to phase out fossil fuel use has endangered Russia’s main source of state revenue, forcing the Kremlin to focus on acquiring, one way or another, a new, future-proof high-value export — critical minerals.

And while it may not have been a main factor in prompting the full-scale aggression launched on February 24, 2022, one consideration in the Kremlin was likely Ukraine’s large reserves of critical metals and their global strategic importance in the decades to come. Even prior to Russia’s full-scale re-invasion of Ukraine, the critical minerals markets showed striking wholesale price increases, which were generated by several factors. 

Despite their name, the subset of critical minerals known as “rare earth metals” are not necessarily rare. However, in most cases, their extraction and refining processes are challenging operations, especially in light of environmental protection provisions in Western countries.Thus, more than 60% of rare earth metals are mined by Chinese entities, either domestically or through long-term concessions abroad, mostly in Africa. The refining process of these elements is even more lopsided in China’s favor, with the country controlling more than 85% of the global market share.