CHAPTER 3. CORROSIVE IMPACTS OF THE RUSSIAN FEDERATION ON UKRAINE’S TITANIUM INDUSTRY Extraction and processing of titanium is one of the strategic industries of Ukraine. The metal is used in aircraft, rockets, and shipbuilding, and only seven countries produce it: Ukraine, Kazakhstan, the U.S., Japan, China, India, and Russia.10 Ukraine has 20% of global ilmenite reserves, from which titanium is extracted. There are more than 40 deposits in Ukraine, of which 12 have been explored in detail and industrial extraction has begun.
3.1. Gradual establishment of control over the titanium industry of Ukraine before the start of open phase of a hybrid war (2001–2014) Until 2014, the titanium industry of Ukraine, which included extraction and refining into intermediate goods, was under the monopoly control of oligarch Dmytro Firtash. The formation of his “titanium empire” started in 2001 and over the next 10 years he gained control over key enterprises in this industry. The first acquisition was Mezhyrichensk Mining and Processing Plant LLC. It was registered in Zhytomyr oblast in January 2001. The beneficial owner is Dmytro Firtash,11 and the company held a special permit for the extraction of ilmenite ore from a 492-hectare section of the Mezhyrichne deposit. The estimated capacity of the enterprise is 180,000 tons of ilmenite concentrate per year. Valky-Ilmenit LLC was registered in Zhytomyr oblast, in March 2001, with Firtash as beneficial owner through a Cypriot company called Balmat Holdings Ltd.12 It’s permit allows use of the resources of the Valky-Gatskivske deposit, and the estimated capacity of the enterprise is 65 thousand tons of ilmenite concentrate per year. In 2004, Dmytro Firtash took control of three additional enterprises, which since 1997 have been on the “List of state-owned entities of strategic value for the economy and security of the state”: •
Crimean Titan PrJSC, the only producer of titanium dioxide in Europe, and was established in August 2004 after the sale of 49% of its shares to the German company Ostchem Germany GmbH. That company’s beneficial owner is Firtash.13 In 2012, 100% of the shares went to Ostchem Germany GmbH.14 Even though after the occupation of Crimea, Crimean Titan PrJSC was re-registered in Kyiv under the name Ukrainian Chemical Products, it continued operating exclusively within the RF legislation. Dmytro Firtash retained the ownership of enterprise via the Cypriot firm Letan Investments Ltd. and the Russian company Titanium Investments LLC.15 In December 2021, according to the press service of Firtash’s Group DF, the assets of Ukrainian Chemical Products were sold to Russia’s Titanium Investments LLC.16 Estimated capacity of the enterprise is 200,000 tons of titanium dioxide per year, while up to 120,000 tons were actually produced before 2014).
10
https://uifuture.org/reports/strategiya-tytanovoyi-galuzi-ukrayiny-2030/
11
https://youcontrol.com.ua/catalog/company_deta36ils/305979
12
https://youcontrol.com.ua/catalog/company_details/31280048
13
https://ukrrudprom.ua/digest/Sploshnoy_front.html?print
14
https://zn.ua/ECONOMICS/firtash_kupil_kontrolnyy_paket_krymskogo_titana.html
15
https://news.finance.ua/ru/news/-/506529/firtash-prodal-titanovyj-biznes-v-krymu-rossiyanam
16
https://investigator.org.ua/ua/investigations/239039
IDENTIFYING AND ANALYZING CORROSIVE INVESTMENTS INTO UKRAINIAN ECONOMY AS AN ELEMENT OF THE HYBRID WARFARE
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