LONDON: Chemicals factories founded or owned by some of Russia’s wealthiest men are supplying ingredients to plants that manufacture explosives used by Moscow’s military during the war in Ukraine, an analysis of railway and financial data shows. Reuters identified five chemical companies, in which five Western-sanctioned billionaires hold stakes, that provided more than 75 percent of the key chemicals shipped by rail to some of Russia’s largest explosives factories from the start of the war until September this year, according to the railway data.

The news agency’s analysis demonstrates for the first time how heavily factories forming part of Russia’s war machine rely on these men and their companies. The billionaires include Roman Abramovich, former owner of Chelsea Football Club, 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 did not respond to requests for comment sent via their companies or lawyers. London-listed Evraz, in which Ambramovich holds a 28 percent stake, said it supplied the chemicals for “civilian use only”. Lukoil, a refiner in which Alekperov retains a shareholding, said it “does not manufacture explosives or any related components”. Anna Nagurney, a University of Massachusetts professor who closely studies supply chain networks related to the Ukraine-Russia war and reviewed Reuters’ findings, said the five companies were aiding Moscow not only by providing essential chemical ingredients for munitions but also by earning much-needed hard currency from exports of civilian products, including fertilizers.

“These chemical companies may be operating as civilian ones, but they are sustaining the war effort,” Nagurney said. To determine from where Russia’s main munitions factories received their supplies, Reuters analyzed the movement of more than 600,000 rail shipments that carried the chemicals needed to make explosives from the invasion of Ukraine in February 2022 through September 2024.

The railway data from two commercial databases in Russia was supplied to Reuters by the Open Source Centre, a British-based NGO devoted to collecting publicly-available intelligence and monitoring potential sanctions violations. It detailed the type of cargo in every railway wagon, the weight, origin and destination, and the names of the company that sent the goods and the company that received them. Reuters cross-checked the data from the two databases to confirm its accuracy. However, the news agency was unable to confirm whether the data included every rail shipment to the explosives factories, or the extent to which the plants received deliveries by road.

The data showed that the billionaires’ companies supplied vital ingredients to five explosive and gunpowder factories in Russia that are subject to Western sanctions. The plants are subsidiaries of the giant Russian state arms manufacturer and automaker Rostec. Using leaked tax invoices covering parts of 2023, Reuters was also able to verify that four of the chemicals firms were suppliers to four of the explosives manufacturers.

Neither the Kremlin, the defense ministry, nor Rostec responded to Reuters’ questions about civilian companies’ role in supplying Russia’s munitions industry. Before the war, all the explosives plants, as part of efforts to diversify, also used to make explosives or gunpowder for civilian use. Reuters could not determine whether such civilian sales continue and whether the chemicals supplied might be earmarked for civilian usage. 

Thomas Klapotke, a professor of energetics at the University of Munich, who helped Reuters analyse the data, said that, while all the raw materials had many potential uses, the combination of wagon-loads of specific chemicals needed for explosives manufacturing arriving at particular plants provided “red flags”. The analysis provides fresh evidence that the West’s strategy of imposing sanctions on Russia as punishment for its invasion of Ukraine has failed to curb its military production, according to several experts interviewed by Reuters.

While the billionaires themselves are all under Western sanctions, the chemical companies involved have largely escaped major financial penalties or bans on their import of critical goods from the USA or the European Union. Most of the output of these chemical plants are civilian products like fertilizer that are critical to farming. Long-standing Western policies exempt food from sanctions to prevent famine and diplomatic blowback from developing nations.

Peter Harrell, a former senior White House official who worked on Russia sanctions during the war’s first year and is now a scholar at the Carnegie Endowment for International Peace, said perhaps it’s time to review those 2022 decisions now that nations that once relied on Ukraine and Russia for wheat and fertilizer have had time to find alternative sources.

“Potentially, the calculus would weigh towards imposing sanctions on these companies today,” Harrell said, commenting on Reuters’ findings.

However, Manish N Raizada, an agriculture professor at the University of Guelph in Canada, warned that imposing sanctions on Russian chemical companies could put hundreds of millions of small-scale farmers at risk, in return for a minor economic impact on Russia. Spokespersons for the US Treasury Department, which coordinates Washington’s sanctions, and the United Nations Development Program declined to comment on Reuters findings. — Reuters