The multinational trading group Traxys Group has provided $2 million in pre-export financing to Velta Holding, a Ukrainian producer of titanium raw materials. The funds will be used to modernise production in Kirovohrad region, the company said in a statement.

Details

• Velta Holding is planning to reconstruct and overhaul its titanium mining and processing complex based on the Byrzulivske ilmenite deposit in Kirovohrad region.
• ‘We continue to systematically fulfil our obligations to our partners. This financing is not only a resource for development, but also a clear signal of international confidence in Ukrainian companies,’ said Andrey Brodsky, President of Velta Holding.
• In the period 2022-2024, Velta allocated all available financial resources to support the army and address the challenges of the war, which forced it to postpone major repairs and modernisation of production, the press release said.
• Traxys, one of the world’s leading minerals and metals trading companies, has been Velta’s partner for over 10 years. This has allowed the company to consolidate its position in the US market and become a supplier of titanium raw materials to one of the world’s largest titanium dioxide producers in North America.
• In 2020, Traxys and Velta signed a 5-year contract worth $100 million, which was successfully implemented.

Context

Velta Holding is a Ukrainian mining company specialising in the extraction and processing of titanium ores. The company has special permits for the Byrzulivske and Likarivske ilmenite ore deposits.

Due to the war, the business is facing many challenges: energy, human resources and logistics, so we did not finish the year as we had hoped. The main problem is the lack of funding. The Ukrainian mining business needs Western investment, but investors require stable rules of the game and legal guarantees, Brodsky explained in an interview with Forbes Ukraine.

Last year, the revenue of Velta’s Ukrainian subsidiary – Velta’s Ukrainian subsidiary, Velta Financial Management Company LLC, fell by more than 25% to UAH 1.07 billion, according to Opendatabot. The company’s loss reached UAH 780 million.

The United States imports 100% of titanium sponge, which is the basis for the production of aircraft parts, weapons and medical implants. The main suppliers are Japan and Saudi Arabia, but China controls 70% of global titanium sponge production.

The US wants to reduce its dependence on China, and Ukraine, with some of the largest titanium reserves in Europe, has a real chance to push Russian titanium out of the US and EU markets, Brodsky said. According to him, Velta exports up to 100% of its products, of which 50% go to Europe and the rest to the US.