Worth their weight in tantalum: indispensable capacitors for missiles and drones make their way into Russia via Lithuania and China

RU

A conflict mineral

Tantalum, the 73rd element in Mendeleev’s periodic table, became highly sought after in the early 2000s, and even more so in the 2020s. It is used in capacitors, which are indispensable components in telecommunications and electric cars, as well as in the medical, military, and aerospace industries.

Tantalum capacitors have outstanding properties, such as high-temperature stability, making them indispensable in radio electronics, and higher capacitance compared to same-sized analogs made of other materials. To illustrate the immense demand for tantalum, suffice it to say that it can be found in every phone. And yet only a few countries in the world have reserves of this element. Even fewer countries have the know-how to process it.

In 2021, Russia mined about 2% of the world's tantalum ore — comparable to Australia, Burundi, Ethiopia, and Mozambique. However, Russia does not have the capabilities to process it: the Ministry of Industry and Trade voiced the need to establish domestic tantalum powder production only in late 2023, allocating $2.8 million for the research. The move was motivated primarily by the rise in prices for imported powder after the start of Russia's full-scale invasion of Ukraine, Oleg Izumrudov, director of the Consortium of Russian Storage System Developers, told Kommersant.

Meanwhile, the global demand for Russian tantalum ore halved in 2022 as foreign technology giants such as Apple, Intel, and Samsung abandoned the country due to sanctions. Political boycotts connected with tantalum are not new: the ore belongs to the family of so-called “conflict minerals,” a concept originally associated with the purchase of certain minerals from African nations — most notably the Democratic Republic of the Congo (DRC) — because of concerns that proceeds from their sale might be used to finance armed conflicts in those countries. To date, the DRC produces more than 40% of all tantalum ores, and their mining often involves dangerous conditions and the use of child labor.

Human rights organizations worldwide oppose the purchase of blood coltan (the metallic ore from which niobium and tantalum are extracted) and the tantalum derived from it by companies in first-world countries. Years of activist efforts have forced corporations that position themselves as ethical to stop buying tantalum if there are suspicions that its origin is linked to armed conflicts, exploitative labor practices, or harm to the DRC's ecology. Hundreds of companies around the world have signed the Responsible Mineral Initiative, undertaking to source their tantalum ethically.

Dual-use capacitors

However, tantalum turns out to be bloody not only “at the input,” where the ore is mined, but also “at the output.” The reason is its use in military equipment, as the unique properties of tantalum capacitors make them crucial to the production of weapons and aircraft.

Although Russia produces its own tantalum capacitors, enterprises of the Russian military-industrial complex, nuclear power industry, and aerospace industry have historically imported these components from the world's largest manufacturers.

As The Insider discovered, capacitors made by the Japanese-American company Kyocera AVX have been purchased by AO NIKIRET (a Rosatom entity), the State Research Chemical and Analytical Institute of Roskhimzaschita (a Rostec entity specializing in chemical weapons defense), the State Research Institute of Aviation Systems, and FSB Military Unit 45187.

American partners have been willing to deliver the supplies, even though exporting tantalum capacitors to Russia has required a special license since the beginning of 2023. Several Russian and Kyrgyz entities have already fallen under sanctions for illegally importing tantalum capacitors into Russia.

While such capacitors can be used in almost any electronics, the analysis of Russian equipment shot down in Ukraine reveals their use on the battlefield — for instance, in Shahed kamikaze drones, Luch Korsar reconnaissance drones, and Kh-101 missiles. Foreign tantalum-based components have been included in the War and Sanctions database of Ukraine's National Agency on Corruption Prevention.

The capacitors found in Russian missiles and drones were identified as manufactured by Kyocera AVX, Vishay (the company makes parts specifically for military use), and KEMET Corporation. Although these companies are all headquartered in the United States, their parts somehow end up in Russian missiles fired at Ukrainian cities. The Insider traced the supply chain of these capacitors, as it deserves closer international scrutiny.

Spare parts from El Salvador

Thanks to its rapid industrial development and foreign investment, El Salvador, a small Central American nation, is one of the world's leading exporters of capacitors. The manufacturer, Japanese-American company Kyocera AVX, runs a factory outside of the country’s capital. Alfredo Tovar, the company's general manager, boasts that their products can be found in almost any electronic device.

As The Insider found out, Russian missiles are also equipped with AVX capacitors produced in El Salvador. Back in 2021, a quarter of all supplies were shipped to Russia directly from El Salvador, according to Russia’s reports to international organizations. Reporting patterns make it difficult to pinpoint the import arrangements after 2022, but according to Russia's trade partners, almost all tantalum capacitors are being brought into the country from China.

Customs databases suggest that a significant portion of the capacitors China shipped to Russia in 2023 originated in El Salvador, with China acting as an exporter. El Salvador's Kyocera AVX capacitors continue to be shipped to Russia for use in consumer electronics, missiles, and drones. The Insider submitted several inquiries to Kyocera AVX headquarters in the U.S. and to its production facility in El Salvador, asking whether shipments of their products to Russia were in line with U.S.-imposed sanctions, but received no response.

Reliable parts from Israel

Another company whose capacitors have been found in Russian armaments is the U.S.-based Vishay, which produces components for military use specifically. According to The Insider’s calculations, in 2023 Russia received approximately $1.3 million worth of tantalum capacitors manufactured by Vishay's Israeli facility. However, as with the Kyocera AVX, no shipments came directly from the country where they were produced. Most of the Israeli-made capacitors arrived at Russian customs from China and Hong Kong, with others coming from Cyprus and Hungary.

Vishay positions itself as a highly ethical manufacturer. Its website is replete with statements regarding the company’s anti-corruption policy, ethics policy, Responsible Business Alliance statement, guidelines on political donations, human rights policy, anti-discrimination policy, workplace violence policy, etc.

In response to The Insider's question about the use of Vishay capacitors in Russian military equipment, specifically in Korsar reconnaissance drones, the company insisted it had blocked shipments to Russia shortly after the beginning of the full-scale invasion in 2022:

“Vishay recently sent notices to all distributors of our products alerting them to the ongoing export compliance risks associated with the diversion of products through third countries to Russia in violation of U.S. and/or other applicable export laws and regulations. Additionally, Vishay has a long history of working directly with U.S. Government Agencies on trade compliance and national security concerns.”

The main supplier of Vishay capacitors to Russia is the St. Petersburg-based company RIK Logistik, which does not distribute or sell parts, acting merely as an intermediary. RIK Logistik appears to be one of Russia's many small firms that offer “foreign trade outsourcing.” Assistance in circumventing sanctions turned out to be a lucrative business idea, propelling the company’s profits to a record $1.9 million in 2023, according to its financial statement.

From Mexico with love — for Russia's military-industrial complex

Another manufacturer, KEMET (an American subsidiary of the Taiwanese corporation Yageo), also ranks among Russia’s three leading tantalum capacitor suppliers. KEMET also specializes in military components. According to data available to The Insider, at least $6 million worth of KEMET tantalum capacitors made their way into Russia in 2023.

Manufactured in Mexico, these parts traveled a long way to get to Russia, both geographically and on paper. The capacitors arrived in Hungary from Hong Kong and were shipped to Russia through the Hungarian trading company Matrix Metal Group Kft. The Insider submitted an inquiry to KEMET but had not heard back at the time of publication.

Assistance from Lithuanian brokers

Geographically, the shortest route to Russia from El Salvador, Israel, or China does not pass through Vilnius. However, from a bureaucratic standpoint, the European Union remains a convenient transit zone for dual-use goods destined for Russia — despite all the sanctions.

Thus, Lithuanian customs brokers Vinges Terminalas and Autoverslo Logistika have been facilitating the import of tantalum capacitors and several other restricted articles into Russia. According to customs declarations data in The Insider's possession, these two firms prepared paperwork for customs, also through them good were shipped into Lithuania to be-reshipped in to Russia.

The Insider submitted an inquiry to these companies but had not heard back at the time of publication.

Update. After the publication of this article, The Insider was contacted by Tadas Mockevičius, a representative of Vinges Terminalas. In his commentary, he stated that the company WWSEMICON GMBH, which had supplied tantalum capacitors through Lithuania, and whose customs declaration data indicated that the shipments were facilitated by Vinges Terminalas, was not their client. At the same time, the customs declaration data had indicated the code of the customs warehouse located on the territory belonging to Vinges Terminalas. Therefore, he admits that the goods of WWSEMICON GMBH could have been stored in the customs warehouse of Vinges Terminalas, but assumes that the contract was concluded with some other company. According to Tadas Mockevičius, the company Vinges Terminalas last imported goods under the HS-code 8532210000 (tantalum capacitors) in 2020.

According to Mr. Mockevičius, Vinges Terminalas never purchased any goods for resale. He stressed that “importing” means “purchasing for use or resale”, while Vinges Terminalas' business is completely different - they provide customs brokerage services.