Written by Stephen Gray, John Shiffman, and Grant Smith
LONDON (Reuters) – Factories founded or owned by some of Russia's richest men are supplying components for plants making explosives used by Moscow's army during the war in Ukraine, an analysis of railway and financial data showed.
Reuters identified five chemical companies, in which five billionaires banned from the West have stakes, that provided more than 75% of the main chemicals shipped by rail to some of Russia's largest explosives factories from the beginning of the war until September of this year, according to Reuters. Railway data.
The news agency's analysis shows for the first time the extent to which factories that are part of the Russian war machine depend on these men and their companies.
The billionaires include Roman Abramovich, the former owner of Chelsea Football Club, and Vagit Alekperov, who Forbes magazine ranked in April as the richest man in Russia with an estimated fortune of $28.6 billion.
Abramovich and Akberov did not respond to requests for comment sent through their companies or their lawyers. London-listed company Evraz, in which Ambramovic has a 28% stake, said it supplied the chemicals “for civilian use only.” Lukoil, a refiner in which Alekperov maintains a shareholding, said it “does not manufacture explosives or any related components.”
Anna Nagorny, a University of Massachusetts professor who closely studies supply chain networks related to the Ukrainian-Russian war and reviewed the findings for Reuters, said the five companies were helping Moscow not only by providing basic chemical components for munitions but also by earning much-needed income. . Hard currency from exports of civilian products, including fertilizers.
“These chemical companies may operate as civilian companies, but they are supporting the war effort,” Nagorny said.
To determine where Russia's main munitions factories receive their supplies, Reuters analyzed the movement of more than 600,000 rail shipments carrying chemicals needed to make explosives from the invasion of Ukraine in February 2022 through September 2024.
Reuters was provided with railway data from two commercial databases in Russia by the Open Source Centre, a British-based non-governmental organization dedicated to collecting publicly available intelligence and monitoring potential sanctions violations. It details the type of goods in each railway car, the weight, the origin and destination, and the names of the company that sent the goods and the company that received them.
Reuters checked the data from both databases to ensure accuracy. However, the news agency was unable to confirm whether the data included every rail shipment to explosives factories, or the extent to which factories received deliveries by road.
The data showed that billionaire companies supplied vital components to five explosives and gunpowder factories in Russia that are subject to Western sanctions. The factories belong to the giant Russian arms manufacturer and car manufacturer Rostec.
Using leaked tax invoices covering parts of 2023, Reuters was also able to verify that four of the chemical companies were suppliers to four of the explosives manufacturers.
The Kremlin, the Defense Ministry, and Rostec did not respond to Reuters' questions about the role of civilian companies in supplying the Russian munitions industry.
Before the war, all explosives factories, as part of diversification efforts, were also used to make explosives or gunpowder for civilian use. Reuters was unable to determine whether such civilian sales were continuing and whether the chemicals supplied were intended for civilian use.
Although all of the raw materials have many potential uses, the range of wagon loads of specific chemicals needed to make explosives arriving at specific plants provided “flags “Red.”
The analysis provides new evidence that the West's strategy of imposing sanctions on Russia as punishment for its invasion of Ukraine has failed to limit its military production, according to a number of experts interviewed by Reuters.
While the billionaires themselves are all subject to Western sanctions, the chemical companies involved have largely escaped major financial sanctions or bans on their import of vital goods from the United States or the European Union.
Most of the production of these chemical plants is civilian products such as fertilizers that are vital for agriculture. Longstanding Western policies exempt food from sanctions to prevent famine and a diplomatic response from developing countries.
Perhaps it is time to review the 2022 resolutions now that countries that previously relied on Ukraine and For wheat and fertilizer, Russia had enough time to find alternative sources.
Commenting on Reuters' findings, Harel said, “The calculations are likely to influence the imposition of sanctions on these companies today.”
But Manish Raizada, a professor of agriculture at the University of Guelph in Canada, warned that imposing sanctions on Russian chemical companies could put hundreds of millions of small farmers at risk, with little economic impact on Russia.
Spokesmen for the US Treasury Department, which coordinates Washington's sanctions, and the United Nations Development Program declined to comment on Reuters' findings.
“We are actively exploring possibilities for additional measures to increase pressure and close gaps in a way that will avoid negative impacts on food security,” a European Commission spokesperson said in response to questions about chemicals companies.
The spokesman stressed that any action will not come except after a careful analysis of the effectiveness of any measures and their impact on European companies. However, he noted that EU sanctions would indeed apply to companies, even if not specifically identified, if they were controlled or owned by a sanctioned individual.
Artillery war
The war in Ukraine has turned into an artillery duel as a shortage of high explosives available to NATO and Ukraine has allowed Russian forces to control large swaths of territory this year, according to a number of Ukrainian leaders interviewed by Reuters.
Moscow invests heavily in military production and seeks to replenish its stock of ammunition. In 2024, Russia produced about 2.4 million artillery shells and imported 3 million from North Korea, according to a Ukrainian security official. The North Korean embassy in London did not respond to calls from Reuters seeking comment.
The five munitions factories supplied by billionaire companies include the massive Sverdlov facility in Dzerzhinsk. The plant is Russia's only significant manufacturer of HMX and RDX plastic explosives used in artillery and missiles, according to a Ukrainian intelligence official.
Two plants run by Eurochem – founded by Russian billionaire Andrey Melnychenko – supply chemicals to Sverdlov, according to railway data.
Eurochem is one of the largest manufacturers of mineral fertilizers in the world. The Nevinnomyssky nitrogen plant in southwestern Russia sent at least 38,000 metric tons of acetic acid to Sverdlov during the Ukraine war, according to a Reuters analysis of railway data.
A second Eurochem facility, Novomoskovsky Nitrogen, sent nearly 5,000 metric tons of nitric acid to Sverdlov in the same period, railway data showed.
Both acetic acid and nitric acid are used to make HMX and RDX.
According to Reuters calculations, based on scientific literature and reviewed by an explosives expert, 5,000 tons of nitric acid could be used to make 3,000 tons of RDX, enough to fill 500,000 large-caliber artillery shells.
Tax invoices seen by Reuters confirmed that Eurochem was the supplier to Sverdlov last year.
In response to detailed questions, Eurochem said that the Reuters report contains “many material and factual errors.” Specifically, “Eurochem is not part of the defense sector of the Russian economy and none of our products are designed for military purposes,” said a statement from the company, which is headquartered in Switzerland. Eurochem said any suggestion that Melnichenko controlled the company was false.
Melnichenko did not respond to questions. The billionaire, who Forbes said was worth $17.5 billion, placed his controlling stake in Eurochem in an investment fund that would benefit his wife, Reuters reported, after sanctions were imposed on him by the European Union and NATO following the invasion of Ukraine.
The statement said that although 97% of its production is fertilizers, Eurochem supplies other industrial products, including these chemicals, to a large number of customers in Russia and abroad. The company did not respond to Reuters' questions about chemical shipments to Sverdlov. Questions sent to the email address on the Sverdlov website were not answered.
Tax data
Another fertilizer giant, Uralchem, founded by sanctioned billionaire Dmitry Mazepin, supplied Sverdlov with more than 27,000 metric tons of ammonium nitrate, railway data showed. Ammonium nitrate is used to make HMX and RDX, and it is mixed with TNT to produce an explosive substance called amatol. Uralchem also supplied 6,000 metric tons of nitric acid from its nitrogen fertilizer plant in Berezniki to Sverdlov, the data showed.
Two other state-owned ammunition factories, the Tambov Gunpowder Factory and the Kazan Gunpowder Factory, received shipments of acid from Uralchem, railway data showed.
Leaked Russian tax invoices, seen by Reuters, revealed that Oralchem supplied the Sverdlov, Tambov and Kazan factories as well as the state-owned Perm Powder factory last year.
In response to a detailed question about the shipments, Oralchem said the information was “incorrect.” No further details or clarifications were provided.
Mazepin, who reduced his ownership of the company from 100% to 48% immediately after the invasion of Ukraine, could not be reached for comment. The Tambov, Perm and Kazan factories did not respond to questions sent to email addresses listed on their websites or in company files.
A Siberian steel mill owned by London-listed Evraz has supplied 5,000 metric tons of toluene – a component of TNT – to the Biysk Oleum plant, according to railway data. The British government imposed sanctions on Evraz in 2022, saying it was supplying steel to the Russian army.
Efraz said in a statement that it supplied toluene only “for civilian use only.” Sverdlov's Biysk Oleum plant did not respond to requests for comment.
In April 2024, the government of the Altai Region, which includes the city of Biysk, included the plant among the manufacturers that “significantly increased” its production for 2023 in implementation of state defense procurement contracts.
Reuters identified two other companies linked to billionaires that supply chemicals to ammunition factories. The Sredneuralsk smelting plant (SUMZ) in the Ural Mountains, founded by metallurgy tycoon Iskander Makhmudov, supplies the oil – also known as fuming sulfuric acid – used in the Tambov, Kazan and Perm powder plants.
Lukoil's Perm refinery supplied 6,500 metric tons of toluene to the Perm powder plant in Kazan and Biysk. Lukoil is partly owned by billionaire Alekperov, the company's former president. Like others, he exited several shares in 2022 but retained an 8.55% stake.
Tax invoices seen by Reuters showed that the Lukoil plant was a supplier to the Perm Powder plant last year. They also document shipments from SUMZ to Kazan and Perm factories.
Lukoil said in a statement that its Perm refinery “does not manufacture explosives or any related components” and that Reuters’ questions about shipments from there included “ridiculous speculation.”
SUMZ did not respond to detailed questions. Its parent company, UMMC, which is subject to sanctions by the United States and Britain, did not respond to a request for comment. Makhmudov, who relinquished his controlling stake in 2022, also could not be reached for comment.
