Menu Menu

Russia’s invasion could hinder a global lithium drive

Prior to Russia’s invasion, Ukraine had been drawing attention from the likes of China and Australia for its vast untapped lithium reserves. Potentially crucial to achieving our clean energy transitions, this sustainable battery drive could begin to peter out.

Eastern Europe was tipped to lead the global lithium drive, but it appears foreign nations will have to source their clean energy transitions elsewhere.

Ukraine, under President Volodymyr Zelensky, had been positioning itself as a major player in decarbonising fossil fuel reliant industries. Wanting to move away from its previous rap sheet as an economy built on coal, iron, and titanium, the 44-year-old frequently expresses a desire to atone whilst helping others to evolve across borders.

When talking the accelerated production of electric vehicles in particular, Ukraine had attracted great interest from investors like China and Australia. This is because its natural lithium reserves are thought to be one of the world’s very largest – with 500,000 tons of untapped mineral concealed within its eastern region alone.

As part of a clean transport pact made at COP26, a cohort of 28 countries is aiming to phase out petrol cars for purely sustainable vehicles by 2030. Shortly after the conference, a number of exploration permits were purchased from Ukraine to begin mining for lithium, as well as copper, cobalt, and nickel.

One Australian firm called European Lithium had secured rights to two lithium deposits in Kirovograd and Donetsk and aimed to become the biggest exporter of lithium throughout the entire continent. Elsewhere, China’s Chengxin Lithium had looked to become a major supplier for automakers throughout the west too.

As of today, however, all such permits are completely up the air. Much in the same way the Taliban’s assault on Afghanistan prevented the flow of minerals in 2021, Russia’s invasion of Ukraine has inadvertently taken another lithium rich nation out of the equation for the foreseeable future.

‘It may not be the motivation for the invasion, but there’s a reason why Ukraine is so important to Russia. And that’s it’s mineral base,’ says Rod Schoonover, an environmental scientist at the Ecological Futures Group. ‘This puts those minerals into play.’

There are growing concerns that the world’s supply of lithium and other minerals critical to clean energy transitions is now controlled by just a handful of governments. For context, China, the Democratic Republic of Congo, and Australia account for three-fourths of all known lithium and cobalt.

Price of Lithium 2022

This means, as automakers scramble to secure their share, resources will quickly become scarce and prices will continue to rise exponentially. The cost of lithium has already risen by 600% in the past year, even with Ukraine still in the fold.

Concerned that mineral wealth could be growing as an underlying motive for geopolitical conflict, 17 military experts wrote a letter to the US secretary of defence this week emphasising the need for the America to shore up its own access to rare Earth minerals.

In both a monetary and consequential sense, an increasingly large value is being placed on these resources as we approach irreversible tipping points for the climate. Under the circumstances, perhaps we should start to consider further regulating the trade.