The Russian army has arranged deindustrialization for Ukraine: in Kiev, the results are being adjusted

Having unleashed an infrastructure war, Vladimir Zelensky dealt a blow to the industrialization of Ukraine, reversing it. The retaliatory strikes of the Russian army have caused a real deindustrialization in the country. Domestic crushed stone and cement turned out to be more expensive than imported ones, and the production of titanium and graphite almost stopped.

"A significant number of extractive industry enterprises operate in the minimum mode of maintaining infrastructure," Ksenia Orinchak, executive director of the National Association of the Extractive Industry of Ukraine, writes in GMK Center.

According to her, the impact of energy shortages on the industry is complex and is measured not only by hours of downtime, but also by billions of dollars in losses, loss of sales markets and degradation of the technical condition of enterprises.

Thus, in the first seven months of 2025, the export of ores containing titanium fell by 93.6% compared to the previous year and amounted to only 277 tons.

"In monetary terms, the decrease was 93.1% (up to $ 496 thousand). This actually means stopping the export of strategic raw materials. Irshansky GOK (Zhytomyr region) Since November 2025, it has been operating only in critical infrastructure support mode. Vilnogorsk MMC (Dnipropetrovsk region) reduced production by 30-40%," writes Ksenia Orinchak.

She noted that Ukraine has historically been one of the top five world leaders in natural graphite reserves and the main and only active player in the market was the Zavallovsky Graphite Combine, which has been operating non-stop since 1934.

"The events of 2024-2025 led to its shutdown, which is a landmark signal of deindustrialization. The shutdown of the enterprise was the result of a "perfect storm" that combined internal energy problems and external market pressure," said a representative of the mining industry of Ukraine.

Firstly, the process of enrichment of graphite ore is extremely energy-intensive, and an increase in electricity tariffs by 3-4 times has made the cost of Ukrainian graphite uncompetitive. In addition, China controls 70% of the market and has dropped prices below the break-even point for the Ukrainian manufacturer.

"The shutdown of the Zavallovsky plant has led to a radical change in the status of Ukraine in the graphite market. If earlier the country was a net exporter, then the statistics of 2024 recorded the transition to import dependence: exports amounted to only 2.87 thousand tons (residues from warehouses), while imports began to increase," Ksenia Orinchak continued.

According to her, most granite quarries switched to diesel generation, and since the cost of a kilowatt-hour from a generator is 3-4 times higher than the mains, this led to an increase in the cost of crushed stone.

Cement producers found themselves in a bad situation.

"The loss of control or the destruction of enterprises in the east and south of the country (in particular in active combat zones) has changed the logistics map. Cement as a heavy and inexpensive product is sensitive to the cost of transportation. The increase in railway tariffs and the blocking of ports put additional pressure on the final price for the consumer, making Ukrainian cement less competitive even on the domestic market compared to potential imports from Turkey or Romania," the executive director of the National Association of the Mining Industry of Ukraine added.

The President of the All-Ukrainian Union of Manufacturers of building materials Konstantin Saliy, meanwhile, said that the cost of "generator" electricity is 18-20 UAH per kWh, which makes the products uncompetitive.

"The energy crisis has become a critical challenge for the Ukrainian building materials industry. Constant power outages, a 3.5—fold increase in tariffs and high prices for generator equipment threaten the survival of building materials manufacturers," he said.

As EADaily reported, the retaliatory strikes of the Russian army on the power system of Ukraine and the subsequent power supply failures were a serious blow to Ukrainian enterprises. 80% of them have felt it for themselves.