9 reasons why Ukraine’s riches matter to the world Business

Seizing resource-rich Ukraine would give Vladimir Putin control of a cornerstone of the global commodity market.

The former Soviet state is a superpower in several crucial commodities and is a key supplier to global metals and food markets.

The UK is unlikely to be directly affected as it imports very little from Ukraine, but supply disruptions and the impact of sanctions if applied to areas annexed by Russia have already had repercussions on world markets.

Analysts at the Center for Strategic and International Studies said last month that “Russia’s annexation of all or part of Ukraine would increase Russian manpower, industrial capacity and natural resources to a level which could make it a global threat”.

Credit Suisse’s Michael Strobaek said the invasion could fracture global trade as Russia establishes a wider sphere of influence.

“Supply chains are likely to become more regional, leading to higher inflation for longer, as some of the efficiency gains of globalization are undone,” he said.

Here are some of the main commodities produced by Ukraine:

1. Iron and steel

Ukraine is the fifth largest iron exporter by volume and its 13th largest steel producer, with about 80% of its production sold to other countries. When the Soviet Union collapsed in the early 1990s, Ukraine was one of its iron powerhouses, accounting for 17% of the USSR’s total output.

2. Charcoal

With 3.2% of the world’s coal reserves located in Ukraine, according to energy giant BP, the country is second only to Germany as the biggest source of polluting fuel in Europe. This may offer a diminishing benefit as countries attempt to wean themselves off coal, but even some of the most ambitious net zero plans see countries partially dependent on coal for the next few years.

3. Uranium

Uranium production is key to Ukraine’s plans to wean itself off reliance on Russia for nuclear power. It is the second European producer of heavy metals, behind its giant neighbour. In 2018, it was responsible for about 2% of global uranium production, according to the OECD, compared to 5% for Russia.