By Stephen Gray, John Shiffman and Grant Smith
LONDON (Reuters) – factories based or owned by a few of Russia’s wealthiest males are supplying elements to vegetation that manufacture explosives utilized by Moscow’s army in the course of the battle in Ukraine, an evaluation of railway and monetary information reveals.
Reuters recognized 5 chemical firms, through which 5 Western-sanctioned billionaires maintain stakes, that supplied greater than 75% of the important thing chemical compounds shipped by rail to a few of Russia’s largest explosives factories from the beginning of the battle till September this 12 months, in accordance with the railway information.
The information company’s evaluation demonstrates for the primary time how closely factories forming a part of Russia’s battle machine depend on these males and their firms.
The billionaires embody Roman Abramovich, former proprietor of Chelsea Soccer Membership, and Vagit Alekperov, who was ranked by Forbes in April as Russia’s richest man with a fortune estimated at $28.6 billion.
Abramovich and Alekperov didn’t reply to requests for remark despatched through their firms or legal professionals. London-listed Evraz, through which Ambramovich holds a 28% stake, mentioned it provided the chemical compounds for “civilian use solely”. Lukoil, a refiner through which Alekperov retains a shareholding, mentioned it “doesn’t manufacture explosives or any associated parts”.
Anna Nagurney, a College of Massachusetts professor who carefully research provide chain networks associated to the Ukraine-Russia battle and reviewed Reuters’ findings, mentioned the 5 firms had been aiding Moscow not solely by offering important chemical elements for munitions but additionally by incomes much-needed onerous foreign money from exports of civilian merchandise, together with fertilizers.
“These chemical firms could also be working as civilian ones, however they’re sustaining the battle effort,” Nagurney mentioned.
To find out from the place Russia’s fundamental munitions factories acquired their provides, Reuters analysed the motion of greater than 600,000 rail shipments that carried the chemical compounds wanted to make explosives from the invasion of Ukraine in February 2022 by way of September 2024.
The railway information from two business databases in Russia was provided to Reuters by the Open Supply Centre, a British-based NGO dedicated to gathering publicly-available intelligence and monitoring potential sanctions violations. It detailed the kind of cargo in each railway wagon, the burden, origin and vacation spot, and the names of the corporate that despatched the products and the corporate that acquired them.
Reuters cross-checked the info from the 2 databases to verify its accuracy. Nonetheless, the information company was unable to verify whether or not the info included each rail cargo to the explosives factories, or the extent to which the vegetation acquired deliveries by highway.
The information confirmed that the billionaires’ firms provided very important elements to 5 explosive and gunpowder factories in Russia which are topic to Western sanctions. The vegetation are subsidiaries of the large Russian state arms producer and automaker Rostec.
Utilizing leaked tax invoices masking components of 2023, Reuters was additionally in a position to confirm that 4 of the chemical compounds corporations had been suppliers to 4 of the explosives producers.
Neither the Kremlin, the defence ministry, nor Rostec responded to Reuters’ questions on civilian firms’ function in supplying Russia’s munitions business.
Earlier than the battle, all of the explosives vegetation, as a part of efforts to diversify, additionally used to make explosives or gunpowder for civilian use. Reuters couldn’t decide whether or not such civilian gross sales proceed and whether or not the chemical compounds provided may be earmarked for civilian utilization.
Thomas Klapotke, a professor of energetics on the College of Munich, who helped Reuters analyse the info, mentioned that, whereas all of the uncooked supplies had many potential makes use of, the mix of wagon-loads of particular chemical compounds wanted for explosives manufacturing arriving at specific vegetation supplied “pink flags”.
The evaluation offers recent proof that the West’s technique of imposing sanctions on Russia as punishment for its invasion of Ukraine has didn’t curb its army manufacturing, in accordance with a number of specialists interviewed by Reuters.
Whereas the billionaires themselves are all beneath Western sanctions, the chemical firms concerned have largely escaped main monetary penalties or bans on their import of crucial items from the USA or the European Union.
Many of the output of those chemical vegetation are civilian merchandise like fertilizer which are crucial to farming. Lengthy-standing Western insurance policies exempt meals from sanctions to stop famine and diplomatic blowback from growing nations.
Peter Harrell, a former senior White Home official who labored on Russia sanctions in the course of the battle’s first 12 months and is now a scholar on the Carnegie Endowment for Worldwide Peace, mentioned maybe it is time to evaluation these 2022 choices now that nations that after relied on Ukraine and Russia for wheat and fertilizer have had time to seek out various sources.
“Doubtlessly, the calculus would weigh in the direction of imposing sanctions on these firms in the present day,” Harrell mentioned, commenting on Reuters’ findings.
Nonetheless, Manish N. Raizada, an agriculture professor on the College of Guelph in Canada, warned that imposing sanctions on Russian chemical firms may put lots of of tens of millions of small-scale farmers in danger, in return for a minor financial affect on Russia.
Spokespersons for the U.S. Treasury Division, which coordinates Washington’s sanctions, and the United Nations Growth Program declined to touch upon Reuters findings.
A European Fee spokesperson, in response to questions in regards to the chemical compounds firms, mentioned: “We’re actively exploring the chances for extra measures to step up strain and shut loopholes in a way that might keep away from adverse implications for meals safety.”
The spokesperson harassed that any motion would solely come after cautious evaluation of the effectiveness of any measures and their affect on European firms. Nonetheless, he famous that EU sanctions would already apply to the businesses, even when they weren’t particularly designated, in the event that they had been managed or owned by a sanctioned particular person.
ARTILLERY WAR
The battle in Ukraine has turn out to be an artillery duel the place a scarcity of excessive explosives accessible to NATO and Ukraine has allowed Russian forces to achieve swathes of territory this 12 months, in accordance with a number of Ukraine commanders interviewed by Reuters.
Moscow is investing closely in army manufacturing and searching for to replenish its munitions stockpiles. In 2024, Russia produced about 2.4 million artillery rounds and imported 3 million from North Korea, in accordance with a Ukraine safety official. The North Korean embassy in London did not return calls from Reuters searching for remark.
The 5 munitions vegetation provided by the billionaires’ firms embody the huge Sverdlov facility in Dzerzhinsk. The plant is the one vital maker in Russia of the plastic explosives HMX and RDX utilized in artillery and missiles, in accordance with a Ukrainian intelligence official.
Two factories run by Eurochem – based by Russian billionaire Andrey Melnichenko – provide chemical compounds to Sverdlov, in accordance with the railway information.
Eurochem is without doubt one of the world’s largest producers of mineral fertilizers. Its Nevinnomysskiy Nitrogen plant in southwest Russia has despatched at the least 38,000 metric tons of acetic acid to Sverdlov in the course of the Ukraine battle, in accordance with a Reuters evaluation of the railway information.
A second Eurochem facility, Novomoskovskiy Nitrogen despatched almost 5,000 metric tons of nitric acid to Sverdlov in the identical interval, the railway information confirmed.
Each acetic acid and nitric acid are used to make HMX and RDX.
In line with Reuters calculations, based mostly on scientific literature and reviewed by an explosives skilled, 5,000 tons of nitric acid might be used to make 3,000 tons of RDX, sufficient to fill 500,000 large-calibre artillery shells.
The tax invoices reviewed by Reuters confirmed that Eurochem was a provider to Sverdlov final 12 months.
In response to detailed questions, Eurochem mentioned Reuters’ reporting contained “quite a few materials factual errors”. Particularly, “EuroChem will not be a part of the defence sector of the Russian financial system and none of our merchandise are designed for army functions,” learn a press release from the corporate, which is headquartered in Switzerland. Eurochem mentioned that any suggestion Melnichenko managed the corporate was false.
Melnichenko didn’t reply to questions. The billionaire, mentioned by Forbes to be value $17.5 billion, positioned his controlling stake in Eurochem right into a belief that advantages his spouse, as Reuters has reported, after the imposition of sanctions on him by the EU and Nato following the invasion of Ukraine.
The assertion mentioned that whereas 97% of its output is fertiliser, Eurochem provides different industrial merchandise, together with these chemical compounds, to a large variety of shoppers in Russia and overseas. The corporate did not reply Reuters’ questions in regards to the chemical shipments to Sverdlov. Questions despatched to the e-mail tackle on Sverdlov’s web site went unanswered.
TAX DATA
One other fertilizer big, Uralchem, based by sanctioned billionaire Dmitry Mazepin, supplied Sverdlov greater than 27,000 metric tons of ammonium nitrate, the railway information confirmed. Ammonium nitrate is used to make HMX and RDX, and can also be blended with TNT to supply an explosive referred to as Amatol. Uralchem additionally provided 6,000 metric tons of nitric acid from its nitrogen fertiliser plant in Berezniki to Sverdlov, the info confirmed.
Two different state-owned munitions vegetation, the Tambov Gunpowder Plant and Kazan Gunpowder Plant, acquired shipments of acids from Uralchem, the rail information confirmed.
The leaked Russian tax invoices, reviewed by Reuters, additionally revealed that Uralchem provided the Sverdlov, Tambov and Kazan factories in addition to the state-owned Perm Powder plant final 12 months.
Requested intimately in regards to the shipments, Uralchem mentioned the knowledge was “incorrect”. It didn’t present additional particulars or rationalization.
Mazepin, who diminished his possession of the corporate from 100% to 48% simply after the invasion of Ukraine, couldn’t be reached for remark. The Tambov, Perm and Kazan vegetation didn’t reply to questions despatched to electronic mail addresses listed on their web sites or on company filings.
A metal plant in Siberia owned by London-listed Evraz provided 5,000 metric tons of toluene – an ingredient for TNT – to the Biysk Oleum Plant, in accordance with the rail information. Evraz was sanctioned in 2022 by the British authorities which mentioned it provided metal to the Russian army.
In a press release, Evraz mentioned it solely provided toluene for “civilian use solely”. The Biysk Oleum plant, a unit of Sverdlov, did not reply to requests for remark.
In April 2024, the federal government of Altai area, which incorporates town of Biysk, listed the plant amongst producers that “considerably elevated” their 2023 manufacturing in fulfilment of state defence procurement contracts.
Reuters recognized two different billionaire-linked firms supplying chemical compounds to munitions factories. The Sredneuralsk Smelting Plant (SUMZ) within the Ural mountains, based by metals magnate Iskander Makhmudov, offers oleum – also referred to as fuming sulphuric acid – used within the Tambov, Kazan, and Perm powder vegetation.
The Lukoil refinery in Perm supplied 6,500 metric tons of toluene to the Perm powder plant, Kazan, and Biysk. Lukoil is part-owned by billionaire Alekperov, the corporate’s former president. Like others, he divested many shares in 2022 however retained an 8.55% stake.
The tax invoices reviewed by Reuters confirmed that the Lukoil plant was a provider to the Perm powder plant final 12 months. In addition they doc shipments from SUMZ to the Kazan and Perm vegetation.
In a press release, Lukoil mentioned its Perm refinery “doesn’t manufacture explosives or any associated parts” and that questions from Reuters about shipments from there contained “absurd speculations”.
SUMZ didn’t reply to detailed questions. Its mother or father firm, UMMC, which is beneath sanctions by the US and Britain, didn’t reply to a request for remark. Makhmudov, who divested his controlling stake in 2022, in accordance with Forbes, additionally could not be reached for remark.
