Daily Management Review

Reuters Claims Turkey, A NATO Member, Bought Russian-Annexed Ukrainian Coal


Reuters Claims Turkey, A NATO Member, Bought Russian-Annexed Ukrainian Coal
According to Russian customs data examined by Reuters, at least $14.3 million worth of coal generated in regions of Ukraine that Russia has annexed has been transferred to NATO member Turkey this year.
The statistics showed that between February and July 2023, around 160,400 tonnes of coal from the Donetsk and Luhansk areas of annexated eastern Ukraine landed in Turkey. According to three producers identified in the customs data, they supplied coal to Turkey during that time from the two regions.
Turkey has not imposed trade restrictions on Russia or the portions of Ukraine that Moscow controls, in contrast to the United States and the European Union. Companies have been warned by Washington not to assist Russia in waging war against Ukraine or evading sanctions.
Turkey, a NATO member that supports Kyiv's efforts to fend off Russia, has frequently stated that it accepts Ukraine's territorial integrity ever since Moscow began its invasion in February 2022. A now-defunct agreement between the warring nations that permitted Ukrainian grain exports over the Black Sea was mediated in large part by Ankara.
Requests for comment on the shipments were not met by the customs directorate or the commerce ministry of Turkey.
Between February and July, coal from at least 10 producers was exported to Turkey, according to data from a commercial trade data supplier examined by Reuters. According to the data, Turkey received 95% of the coal exported from the annexed regions during that time, making it by far the largest export market.
Turkey, a significant consumer and importer of coal, is defying the trend by increasing the proportion of coal used in the production of power. According to official figures, it generated 31.5 million megawatt hours (MWh) of power from imported coal in the first half of this year, a 25% increase from the same period in 2022.
According to the Spark database of Russian enterprises maintained by Interfax news agency, the coal merchants are registered in Russia and in territory of Ukraine that have been seized.
According to the customs data, the buyers were businesses registered in Belize, the British Virgin Islands, Hong Kong, the United Arab Emirates, and other offshore jurisdictions. There were no listed Turkish businesses.
Reuters was unable to identify the buyers' contacts or determine who the ultimate beneficiaries were.
The leader of the so-called Donetsk People's Republic (DNR), Vitaliy Khotsenko, said in November that the area was already exporting coal to Turkey, where it was then sold on markets in the Middle East and Africa.
In the customs data, Reuters was unable to locate any information regarding shipments of coal mined in the DNR to Turkey or other nations in 2022.
Both the Ukrainian government and the Russian-installed authorities in the Donetsk and Luhansk areas remained silent on the coal exports.
An inquiry for comment was not answered by the Russian Ministry of Energy. In response to inquiries from Reuters, Russia's Federal Customs Service stated that it had stopped publishing statistics on international trade in February 2022.
Even if the statistics on commercial trade does not provide a clear picture of how the coal was shipped, it did show that some of it passed through the ports of Rostov in southern Russia and Novorossiisk on the Black Sea, both of which had rail connections to Donetsk and Luhansk. Whether any of it or all of it was re-exported from Turkey is unknown to Reuters.
Three days before Russia invaded Ukraine, on February 21, 2022, the United States implemented sanctions that forbade imports into or exports to the so-called Donetsk and Luhansk People's Republics (LNR). The European Union announced actions two days later, including a ban on the importation of products from the two regions.
The limitations are not the same in Turkey. Companies from Turkey and other countries that the United States believes are aiding Moscow in its conflict with Ukraine have been sanctioned.
"We are aware of reports of trade like this, but we can't comment on your specific findings," said a spokesperson for the U.S. State Department, when asked about the shipments to Turkey.
"We abhor any attempts by Russia to profit from the theft of Ukraine's natural resources. Ukraine's natural resources belong to the people of Ukraine."
The European Commission chose not to respond. According to Reuters, a Chinese corporation purchased copper from a facility in a Ukrainian territory that Russia has occupied in April.
In September 2022, Russia declared the entirety of the eastern Ukrainian republics of Donetsk and Luhansk to be annexed, although still only controlling a portion of the region due to ongoing hostilities.
The declared annexation was denounced as illegitimate by Turkey, the great majority of the UN General Assembly nations, including Ukraine, and its Western allies.
The 10 miners and associated businesses shipping coal from the two annexed territories were contacted by Reuters for comment. Four of them were reachable; the others remained unresponsive.
One of the main coal mining businesses in the annexation territories, Vostokugol is situated in Luhansk and is owned by the Russian-installed LNR authorities. According to customs data, it supplied 100,000 tonnes of coal to Turkey between February and July.
When Reuters questioned Adzhmal Zalmai, a senior official at Florance LLC, a trade firm incorporated in Moscow that serves as the sole vendor for Vostokugol, he hung up. Vostokugol declined to comment when contacted.
Shipments to Turkey have been confirmed by Anton Nadeyev, director of the private mining firm Nedra-06, which is based in Antratsyt, a town close to Luhansk City that has been under the control of pro-Russian proxies since 2014.
Nadeyev declined to give any additional information regarding the deals or the buyers.
"This is already our commercial secret. I'm not ready to voice it," Nadeyev said.
Nedra-06 shipped 1,600 tonnes of coal to Turkey in two shipments between May and June, according to customs records. According to the customs statistics, the buyers were Green Rabbit LTD of Hong Kong and Brig Management LTD of Belize.
According to customs records, the two businesses purchased the most coal from the annexed Ukrainian region during the time period under consideration.
According to customs records, Brig Management LTD delivered 49,000 tonnes of coal mined in Ukraine's seized territory to Turkey between February and July for a total value of $4.8 million.Green Rabbit LTD shipped 11,800 tonnes of coal for $1.1 million within the same time frame.
Brig Management LTD's contact information was not available to Reuters. The Belize Companies and Corporate Affairs Registry rejected a request because "information can only be requested by a Licenced Registered Agent or Owners of the Company."
Reuters went to the address for Green Rabbit Ltd. given in the Hong Kong registration, which is a commercial complex with a number of firms, but was unable to find any reference to the business there.
Denis Karashchuk, a businessman from the mining community of Yasynuvata who produces coal in Russian-controlled Donetsk, also acknowledged that some of his company's products had been transported to Turkey.
He claimed that he did not personally ship the coal there. According to the data, Brig Management LTD and Green Rabbit LTD transported coal they had purchased at Russian ports to Turkey.
"Coal is bought in the port of Novorossiisk," Karashchuk said, referring to the Russian Black Sea port that is a major transport hub for oil and other commodities.
"And what happens next is, let's say, already their (the buyers') business."