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Aug 12, 2022
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America is grieving: Ukraine lost $12 trillion because of Russia. Almost US

America is grieving: Ukraine lost $12 trillion because of Russia.  Almost US

Photo: Alexander Reka/TASS

During a special military operation, Russia took control of Ukraine’s mineral deposits, which are estimated at least 12.4 trillion. dollars. The Washington Post writes about this, citing data from the Canadian analytical company SecDev.

According to analysts, Russia now controls 63% of the coal deposit, 11% of oil, 20% of gas, 42% of metals and 33% of rare earths and “other important minerals, including lithium.” Some of them went to Russia back in 2014 as a result of the reunification of Crimea with it.

As noted in the article, the current situation, according to the co-founder of SecDev Roberta Mugga“has direct implications for the energy security of the West”, which will remain dependent on Russian hydrocarbons. In addition, many of the minerals located in the fields lost by Ukraine are necessary for the production of high-tech products – from smartphones to aircraft components. Kyiv’s loss of access to almost two-thirds of Ukrainian deposits will make it difficult for the West to find “alternatives to imports from Russia and China.”

“The worst-case scenario is that Ukraine will lose land, no longer have a strong resource-based economy, and become more like one of the Baltic countries unable to support its industry,” the director of the Kyiv economic think tank told the publication. Stanislav Zinchenko.

The current situation also led to the freezing of investment projects related to these fields.

Vyacheslav Kulagin, Head of the Department of the Institute for Energy Research of the Russian Academy of Sciences recalled that the eastern regions of Ukraine have traditionally been extractive.

— I would mention coal and metals. There, first of all, there was coal mining and rare earth metals. The resources are really good.

The second question is that this is a theoretical estimate of the value of stocks at the current moment. If we look at the realistic production that could be at these facilities, and the demand for products, then the numbers would be smaller.

There are resources lying in the ground that can be tritely digitized – that is, multiply such a volume of resources by current prices and say that this is so much money. But not everything is extracted from the resources – there are certain recovery factors, losses etc. The project has been under development for decades, you can conditionally lay the price of gas at 2,000, or you can set it at $100. Same with coal, oil etc. What price you put in, you will get such a result.

Coal some time ago cost about 60 dollars, now it is more than 300. The difference is more than 5 times. That is, from what is included in the script, you get a 5 times different result just because of this.

All these assessments are quite subjective, they must be treated realistically, as they say – do not take a word. This is the maximum score under certain circumstances, in practice it is less serious.

In terms of coal, it was a mining region, which is important for Ukraine’s energy sector. From there, deliveries were also made abroad. As for oil and gas, small projects are more likely to be pinpoint places. So far, this is not the main thing that is in Ukraine.

“SP”: – To what extent the transfer of these fields under the control of Russia may affect supplies to Europe, what are the authors of the article so worried about?

– Seriously, this will not hit global supplies. It seems to me that this is an attempt to play a card similar to the grain one with a strong bias and aggravation of the situation.

The simplest picture is oil, gas, coal. What about before that Ukraine exported them in some serious volumes to world markets? On the contrary, she had a need to purchase all these products for internal support. If the supplier was not on the market with these goods, then a rather strange wording that the departure of someone who was not there could somehow affect something.

There was separate cooperation in metals, including in the aircraft industry. Certain parts have been supplied. This means that buyers will really have to reorient themselves to other markets. But metals are probably the only thing that a few foreign consumers will touch, the rest will not.

This may be a story related to how these mining companies will continue to work (for sure they will not stop production), where the products will go. Will it go to foreign markets and according to what schemes or will it be placed on the Russian market? These are questions for the future.

You need to understand that the volumes that are there – for example, for Russia, these are quite small volumes. Russia has its own production in much more significant volumes. Russian raw materials may well go to foreign markets, if there is a need for this, and these regions will be supplied to the domestic market of Russia.

It can be recalled that even after 2014, the Ukrainian authorities, the same Poroshenkowere looking for opportunities and ways to continue supplying coal from the Donbass to Ukraine to meet its needs. Rather, the Ukrainian authorities need to think about how to further interact with these regions in order to meet the needs, so that the economy somehow works, people live. These are questions for the future.

“SP”: – That is, the loss of these territories is much more significant for Kyiv?

– Yes, these are losses, first of all, for the domestic market, it worked for the domestic market. They are deprived of these resources. This is a question of the Ukrainian economy, and not of the world market, where these products, in fact, did not go.

“SP”: – Why is the West so worried that the territories with these deposits are now under our control?

– The grain has already sort of been worked out, as a news occasion no longer works. So we decided – let’s see what resources are there, maybe it will be interesting. This is just an attempt to look at the problem from different angles.

Independent economic expert Leonid Khazanov believes that the “loss” of these deposits will not bring any losses to the economy of Ukraine, since its authorities did not really invest in their development, but the investment regime was worsened to disgrace.

– This is evidenced by the fact that over the past 15 years, not a single new coal mine has been opened in the east of Ukraine.

And none of the European or American companies were particularly interested in the deposits of minerals listed in the Washington Post article in Ukraine, since no one was sure of the stability of its legislation and the success of projects, not to mention high corruption. So what losses can be from what is not used?

“SP”: – And in the world market?

— The demilitarization of the eastern part of Ukraine will in no way affect world supplies — it has never been a strong player in the global market for titanium, zirconium, lithium, gold, hydrocarbon raw materials. Titanium concentrates were supplied to Russia, but then our titanium industry refused them. Lithium and gold are not mined in Ukraine.

“SP”: – What is so worried about the West?

Everything lies on the surface here – the West is afraid of Russia’s success in demilitarizing Ukraine and is doing everything possible to crush it with sanctions and at the same time expose it as a abode of evil for the entire planet. So he is waging against us not only an economic, but also an information war.

The publication in the Washington Post is in line with it and looks like an outright fake: it says that Russian troops are allegedly firing rockets at settlements and, they say, the Russians are destroying all life in their path. If this were the case in reality, then why did we need to clear the Mariupol metallurgical plant and plan the restoration of Donbass?

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