The European Union has continued to import “critical” raw materials such as titanium and nickel from Russia since February 2022, totalling €13.7 billion, and from companies linked to the Kremlin.
This is stated in an investigation by the Investigate Europe portal based on data from Eurostat and the European Commission’s think tank, the Joint Research Centre.
EU sanctions package includes exemptions for 34 types of “critical” raw materials
In eleven packages of sanctions against Russia, the EU has provided exemptions for 34 types of “critical” raw materials that supply from other sources cannot replace due to speed, cost or global shortages.
At the same time, the EU desperately needs these resources, as they play an essential role in electronics, solar panels and electric vehicles, as well as for traditional industries such as aerospace and defence.
According to Investigate Europe’s analysis, between March 2022 and July 2023, the EU imported €13.7 billion worth of “critical raw materials” from Russia, with more than €3.7 billion in shipments from January to July this year.
These funds go not only to the Russian budget but also to companies linked to the Kremlin while it continues its war of aggression against Ukraine.
EU has continued to import titanium and nickel from Russia
For example, VSPMO-Avisma, the world’s largest titanium producer from Russia, which is linked to oligarch Sergey Chemezov, who is close to Vladimir Putin and is not yet on the EU sanctions list, received at least $308 million during the period under review. Among the buyers of VSPMO-Avisma was the European aerospace giant Airbus.
Russia’s Norilsk Nickel, the world’s leading producer of palladium and high-quality nickel, exported $7.6 billion worth of nickel and copper to the EU and more than $3 billion worth of palladium, platinum, and rhodium from March 2022 to July 2023. The EU has not imposed sanctions on Norilsk Nickel.
The Russian aluminium giant Rusal owns the EU’s largest alumina refinery in Ireland and a steel mill in Sweden. In the 16 months since the full-scale invasion of Ukraine, it has imported at least $2.6 billion worth of aluminium into the EU.
Read also: New EU guidelines for companies on how to avoid to help Russia circumvent sanctions
“They are part of the system and fuelling Putin’s war” – Transparency International official
The EU privately acknowledges the problem and is trying to reduce its dependence on Russian critical mineral resources. A European source explained to Investigate Europe that the abrupt imposition of sanctions could lead to a price spike, hurting the EU and helping Russia make more money.
This is not the only example of how Russia has made money from trade with the EU under sanctions. Last week, the media revealed that oil from Russia may be entering Germany through Rosneft’s subsidiary Rosneft Deutschland GmbH, which imports it allegedly from Kazakhstan.
Anti-corruption NGO Transparency International says it does not make sense that the sector has avoided anti-Russian sanctions given the links.
“They are part of the system and fueling Putin’s war. So it’s perfectly logical to ban those critical raw materials from Russia, as we did for other sectors and goods”, senior policy officer Roland Papp said.
European companies buying raw materials from Russia
Since the start of Russia’s all-out war against Ukraine, other European buyers of Russian metals have included Germany’s GGP Metal Powder ($66 million of copper), French arms maker Safran ($25 million of titanium) and Greece’s Elval Halcor ($13 million of aluminium). Dutch logistics firm C. Steinweg also handled at least $100 million of various metals on behalf of its customers.
At the start of Russia’s war in Ukraine, Europe relied on Russian producers for 30% of its nickel, 35% of its alumina and 15% of its aluminium, according to the report. Russia accounted for 41% of the world’s palladium production and up to 25% of its vanadium output.
As the EU sanctions require unanimity among all EU member states, different national economic interests can sometimes block new packages.
The 9th sanctions package in December 2022 banned fresh investments in Russia’s mining sector but included an exemption to invest in mining activities for some critical raw materials. As a result, European companies can still flow cash into Russian mines to extract nickel, titanium and other essential metals.
Read also: Russia acquires Western technology for war via Armenia, bypassing sanctions
