30 January 2025

...Washington and Brussels have hit hundreds of Chinese companies and individuals with sanctions in a pressure campaign to stem the technology flow to the Kremlin’s war machine.

But left untouched by these Western sanctions are some two dozen Chinese companies supplying Russia with gallium, germanium, and antimony - key elements found in the drones and missiles that Moscow is using to pummel Ukraine.

An investigation by Schemes, the investigative unit of RFE/RL’s Ukrainian Service, has found that these Chinese companies are feeding these critical minerals to Russia’s military-industrial complex, including the state-owned conglomerate Rostec...

According to records obtained by the Organized Crime and Corruption Reporting Project (OCCRP) and reviewed by Schemes, at least a third of these suppliers are partially owned by the Chinese government, which publicly denies having “fanned fire or fueled the flames” of Russia’s war on Ukraine...

These Chinese suppliers of critical minerals to Russia identified by Schemes include Yunnan Lincang Xinyuan Germanium Industry...

Another Chinese company supplying germanium, gallium, and antimony to Russia is VITAL Technology Group, a group of Chinese companies with around 25-percent ownership by Chinese state structures.

A third is Hynhe Technology, which is 10-percent owned by Zhejiang Jingsheng Mechanical & Electrical, a leading Chinese state-owned company in the northwestern city of Hangzhou.

Among the recipients of these Chinese metals is a Japanese-owned Russian firm that has sold silicon wafers to Russian manufacturers of microelectronics for weapons, customs and tax records reviewed by Schemes show...

“If there is direct cooperation between a Chinese and a Russian company, then the sanctions of Western partners do not directly affect this. They can continue to do what they do among themselves,” Ukrainian President Volodomyr Zelenskyy's sanctions policy commissioner, Vladyslav Vlasiuk, told Schemes.

Vlasiuk added, however, that sanctions nonetheless play an important role in complicating the Russian military’s supply chain...

Amid the Western sanctions regime, China became the only foreign supplier of gallium and germanium to Russia in 2023 and remains Russia’s largest supplier of antimony, according to Russian customs data obtained by Schemes.

The Rostec-linked companies through which Chinese rare minerals end up in the Russian defense sector include Germanium JSC, a direct Rostec subsidiary, and a private company called Germanium and Applications, which actively does business with Rostec...

The Urals Optical and Mechanical Plant, which is under both U.S. and EU sanctions, describes itself as the “main suppliers of optical systems” for the Russian military.

Other Russian importers of Chinese rare minerals include the U.S.-sanctioned Enkor Grupp, an electronics manufacturer whose plant received a visit from Russian President Vladimir Putin last year, and Cryotrade Engineering, a company that has also been sanctioned by Washington and which works with Rostec and other firms in the Russian military industry...

Records reviewed by Schemes also show that a Russian subsidiary of the Japanese company Ferrotec, which produces silicon parts for microchips, has both imported antimony from China and sold silicon wafers to Russian manufacturers of microelectronics for the military...

The subsidiary, Moscow-based Ferrotec Nord, has imported antimony over the past four years from companies within VITAL Technology Group, a Chinese conglomerate with around 25-percent ownership by Chinese state entities.

The most recent of these listed shipments in customs records obtained by Schemes came in February 2024, nearly two years after Russia launched its full-scale invasion.

As recently as last year, Ferrotec Nord sold silicon wafers to a plant outside Moscow called Epiel, according to tax records obtained by Schemes...