On February 23, 2022, Forbes published an article by Eric Tegler, which analyzed that as Russian troops marched into eastern Ukraine, Putin was able to grab new rewards: ore and energy.
Donets coal
When Russian troops began entering the Donetsk and Luhansk regions on Monday night on the orders of Russian President Vladimir Putin, they began to regain a long-missed prize.
"Donbass" is short for the Donets Coal Basin, which is one of the largest mining areas in Europe. Its coal reserves beneath its rolling plains cover about 9,000 square miles (23,300 square kilometers) south of the Donets River, and the deposits extend westward to the Dnieper River.
Contemporary estimates of the amount of coal in donbass are hard to come by. Production peaked in the 1970s with about 200 million tonnes. In 2000, reserves of Class A, B and C coal were 57.5 billion tonnes. These coals, and coal mines in the region, are sure to be welcomed by Russia, which could help the deal it just announced to supply China with 100 million tons of black rock in the coming years.
Robert Wilkie, deputy defense secretary for personnel and readiness in the Trump administration, recently told Fox News that China will play a role in easing any U.S. sanctions on Russia, and that China will become Putin's financiers and export supporters after the West takes action to counter Ukraine's military advances. Moreover, in November 2021, Russia signed a lucrative agreement with India to provide 40 million tons of coal, which makes the region's underground resources more attractive.
According to the U.S. Geological Survey, Donbass' coal reserves, along with large reserves of methane gas, are estimated at more than 59 trillion cubic feet and 1.6 billion barrels of oil.
Iron ore is also abundant. By 1990, Ukraine accounted for 17 percent of the Soviet Union's massive steel production. The steel industry in Donbass declined in the 1990s and early 2000s, however, in 2013 it rebounded to produce 40% of Ukraine's steel (13.3 million tons). The U.S. Geological Survey ranks Ukraine as the world's fifth-largest reserve of crude iron ore, reaching 18 billion tons.
It is worth mentioning that Russia's intervention in Donbass in 2014 or the annexation of Crimea and subsequent fighting between Ukrainian troops, Russian-backed militants and Russian troops led to the disruption of steel production and coal mining, natural gas and rare earth mining in the region.
With the partition of Donbass in the same year, Ukraine lost many bituminous coal mines that could be used for thermal power generation. However, Ukraine has largely retained the metallurgically used coking coal mines in donbass.
The reduction in resource development in the Donets coal basin, and the corresponding reduction in the use and maintenance of mines, processing facilities and heavy industry, has led to environmental risks.
Neglected and abandoned mines are being flooded with toxic groundwater, threatening the pollution of drinking water in rivers and wells and the surrounding soil, making the land unfit for farming. Methane gas from the mine was pushed to the surface, threatening earthquakes and explosions.
Nevertheless, the region's mineral resources were the strategic prizes that Adolf Hitler recognized during World War II. Greater Ukraine, especially the Donbass region, leads Europe in terms of proven recoverable reserves of uranium ore, ranking seventh in the overall world rankings. Its titanium ore reserves rank second in Europe, manganese ore exploration reserves rank second in the world, and mercury ore reserves rank second in Europe.
Natural and low-enriched uranium can be used as fuel for power generation nuclear reactors, research reactors, military plutonium production and naval propulsion reactors. Highly enriched uranium could power naval propulsion, military plutonium and tritium production reactors and serve as feedstock for nuclear weapons production.
Titanium alloys are one of the most common metals in military applications, used in everything from aircraft components to missile casings, armor plating, naval vessels and spacecraft construction. Many more civilian applications have also contributed to demand.
Manganese ore is essential for steel production, corrosion-resistant aluminum and copper alloys, battery cathodes and nutritional supplements. Mercury ore is valuable in applications including ammunition fuzes, gyroscopes for missile and space guidance systems, infrared detection and illumination.
Rebuilding the natural resource extraction infrastructure of the Donets coal basin will not happen overnight for Russia. However, taking full control of these assets is a clear start, and there are even occasional shortcuts.
Azovstal Steel Works near Mariupol, Ukraine
For example, two of Ukraine's most productive steel export plants, AzovStahl and Ilyich, are located in Mariupol in the Sea of Azov at the mouth of the Kalmius River, southwest of Donbas. If the Russian military goes beyond the current line of control between separatists and Ukrainian forces and controls a wider area, the factories could come directly under Russian administration.
Controlling Donbass, not to mention ukraine as a whole, would also further strengthen Putin's influence in Europe, which would be a useful complement to his control of the Nord Stream 2 pipeline and the Russian gas on which Europe depends. The region's resources could ultimately further increase the dynamism of the Russian economy, which in 2021 will generate fuel, energy and steel for 65% of its exports.
Exports, including the above, account for more than 25% of Russia's GDP and 36% of the country's total budget. Russia's own aggression is driving up the value of its energy, steel and other resource exports, and in an environment where taking Donbass is just a lucrative part of the bigger reward.