How Ukraine can turn critical minerals into an economic breakthrough (part two)

Continuation of the publication by DataDriven consultant Olena Yurkovska, based on the results of a study on the prospects for the development of rare earth minerals in Ukraine in the context of the relevant agreement with the United States. The first part of the article, which was about Ukraine's share in the world's reserves and processing of these minerals, can be found at .

Structural and regulatory challenges

Despite the long history of the mining industry, Ukraine's technological base remains outdated. Facilities such as ZTMC are operating below capacity due to chronic underinvestment, and there are no modern lithium processing and refining facilities – the country mainly exports raw materials.

Most ferroalloy plants have an efficiency below 50%. ESG standards are weak, undermining investor confidence. Although Ukraine is a member of the EITI, monitoring of compliance with standards, especially in the war zones, is limited.

The biggest barrier is geopolitical instability. Hostilities in strategic regions (Donetsk, Luhansk, Zaporizhzhia) complicate field development. New legal framework, international security guarantees and diplomatic support are needed to minimize risks.

The Reconstruction Fund, established in 2025, envisages joint management of license revenues, but energy volatility and sanctions uncertainty remain constraints. International forums in 2024 repeatedly emphasized the need for clear legal guarantees for long-term investment.

Strategic Recommendations for the Critical Materials Sector of Ukraine

For Ukraine to realize its potential as a competitive and sustainable supplier of critical raw materials, the country needs to move from fragmented solutions to a coherent state policy. Such a policy should include reform of market principles (ownership, governance), creation of a robust regulatory and ESG architecture, mobilization of investments and international partnerships, as well as development of domestic processing and value-added infrastructure.