On Results of the Round Table "Risks and Opportunities for the United States in the Global Titanium Market Amid the Russia-Ukraine War"

KYIV, Ukraine, Oct. 7, 2022 /PRNewswire/ — On October 5, 2022, at a round table held in the National Press Club, experts from the Eastern Europe Security Institute (EESI) and the Foundation for Defense of Democracies (FDD) presented reports on strategic threats and risks facing the United States in the titanium industry. The experts discussed how cooperation with Ukraine could help the United States avoid dependence on Russian and Chinese supplies of titanium, a key input for the U.S. economy and military.

John Hardie, deputy director of FDD’s Russia Program, noted that the United States imports over 90 percent of its titanium sponge. Since 2018, the United States has designated titanium as a “critical mineral,” meaning the potential for disruption of foreign supplies represents “a strategic vulnerability” for the U.S. economy and military. Boeing receives 35% of titanium products from “Avisma” and even created a JV.

But Boeing and other Western companies withdrew supplies from Russia after the invasion, leading to a market shortage. Japanese suppliers cannot fill the gap. While U.S. does not heavily rely on Chinese sponge, China can use artificially low prices to capture market share in the U.S. and Europe. This could make the U.S. and Europe dependent on Russia and China.

Given the recent actions of Russia and China, this poses a direct threat to U.S. national security.

The United States can reduce or even eliminate this dependence in the future through cooperation with Ukraine, argues Anatolii Pinchuk, head of the Board at EESI. He noted that according to various estimates, Ukraine has from 12 to 20% of the world’s reserves of titanium ores. Explored reserves of rutile make up 5% of world reserves. In addition, Ukraine has 6% of world deposits of zircon. He provided an overview of the Ukrainian titanium industry, including state-owned companies UMCC and ZTMP and privately owned LLC Velta, as well as companies owned by pro-Russia oligarch Dmitro Firtash and Russia’s VSMPO-Avisma, which Kyiv intends to nationalize.

Mr. Pinchuk noted that in addition to raw materials, Ukraine

also has Europe’s only producer of titanium sponge, ZTMP. With U.S. investment and other assistance, ZTMP could increase production and achieve international certification for supplies of aerospace-grade sponge. LLC Velta have a new, U.S.-patented technology for the manufacture of titanium products, which are three to 3.5 times cheaper and more environmentally friendly than the Kroll Method.

The war created problems with production and exports, but they can be solved, moreover, now it is necessary to introduce new sanctions (primarily against “VSMPO-Avisma,” as it is the largest supplier for the Russian military-industrial complex) and fight pro-Russian influence within countries (examples of nationalization sabotage and attempts to circumvent the ban on supplies to Russia in Ukraine, sabotage of sanctions in the EU, existence of a factual subsidiary of “VSMPO-Avisma” in the USA).

The experts presented recommendations for U.S. government agencies greater cooperation with the Ukrainian titanium industry., the implementation of which will protect titanium assets and technologies, as well as create incentives for the creation of new production facilities, based on Ukrainian raw materials and new technologies that can fully meet the needs of the U.S. economy. Mr. Hardie said Washington and its allies should consider adding Ukraine to their Minerals Security Partnership, a newly launched initiative that aims to “bolster critical mineral supply chains.” Mr. Pinchuk also argued that for efficient use of the Ukrainian potential, it is necessary to use both methods of titanium processing.

The generalized recommendations will be submitted to the relevant state institutions.

Media Contact:

Anatolii Pinchuk



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