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The Insider

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Spanish firm Maxam still making explosives in Russia, tied to military supply chains and importing detonators amid the war in Ukraine

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The Spanish company Maxam, one of the world’s largest producers of explosives, has continued to manufacture its products in Russia despite sanctions imposed by the EU and the U.S. According to an investigation by The Insider, Maxam has been supplying ammonium nitrate to both Russia and Iran through its subsidiary in Uzbekistan. The investigation uncovered at least four indicators suggesting Maxam may have violated sanctions: the company continues to cooperate with sanctioned Russian banks, continues to supply products to a sanctioned mining company, continues to produce explosives inside Russia, and continues to import detonators into the country through third-party intermediaries.

Maxam’s global and Russian operations

Maxam has operated in Russia since 1999. Until at least 2017, the company supplied detonation systems to the FSB’s Center for Special Technology, which develops weapons for sabotage units.

Its first Russian asset was Eastern Mining Services LLC (IMS), registered in Murmansk and directly owned by MaxamCorp International S.L. Currently, Maxam’s Russian network includes four entities: the managing company Maxam Russia LLC (ООО «Максам Русия»), VCI JSC (АО «ВСИ»), IMS LLC (ООО «ИМС») on the Kola Peninsula, and YUII-Sibir LLC (ООО «ЮИИ-Сибирь») in Krasnoyarsk Krai.

VCI JSC’s ownership structure outlined in the company's 2022 reporting.

These Russian operations produce explosives and initiation systems used in mining and tunnel construction. Clients include major industrial players such as aluminum producer Rusal, diamond mining giant ALROSA, and Polyus Gold, Russia’s largest gold producer. In 2015, Maxam CEO José Fernando Sánchez-Junco emphasized the company's presence in Russia, calling it one of the largest operators in the country’s explosives market.

In 2024, Maxam’s business became entangled in a corporate conflict with its former partner. Between 2005 and 2006, Maxam acquired a 49% stake in VCI JSC from the Russian company Promsintez. When Maxam attempted to sell its plant in the Samara region in 2023, Promsintez was among the potential buyers, but a deal could not be reached. In November 2023, the Russian Investigative Committee launched a criminal case on charges of fraud and currency repatriation. Due to a court-ordered freeze on the company’s shares, the Ministry of Industry and Trade (Minpromtorg) denied approval of the transaction.

Since February 2024, Promsintez has been exercising full shareholder rights, and in March 2024, it appointed a new CEO, Dmitry Borovkov. A ruling from the Voronezh Arbitration Court confirmed that Russian authorities also froze MaxamCorp International S.L.’s shares in YUII-Sibir LLC, IMS LLC, and Maxam Russia LLC.

Maxam's activities in Russia during the war

In April 2022, Spain’s Minister of Industry, Trade, and Tourism, Reyes Maroto, claimed that Maxam was in full compliance with sanctions and had ceased operations in Russia. However, financial statements and production records contradict this claim. Maxam’s Russian subsidiaries continued to import both detonators and components while manufacturing explosives domestically.

In December 2022, VCI JSC received a new license to operate with industrial explosives. In 2022 and 2023, IMS and YUI-Siberia received a total of seven certificates of conformity for new batches of manufactured explosives (four in 2022 and three in 2023). According to Rosaccreditation data, the companies produced emulsified explosives under the brands Riomex, Rioflex, Rioxam, Emunex, and VET.

Though not used directly in weapons manufacturing, these substances play a critical role in the supply chain of companies directly linked to Russia’s military-industrial complex. For example, in 2023, Rioflex was used by the Gorevsky GOK (Mining and Processing Plant), which mines and processes lead-zinc ores. These concentrates are essential for military industries: lead is used in bullets, batteries, and primary explosives, while zinc is vital for galvanizing steel and creating defense-grade alloys.

The above is a scanned image of the auditor's report on the YUII-Sibir’s financial statements, which summarise the production of explosives by the company in 2023.

Over the first three years of the full-scale invasion of Ukraine, Maxam’s Russian branches generated more than 11.46 billion rubles in revenue ($146 million), most of it from explosives production and sales.

Sanctions risks

Maxam’s Russian subsidiaries face at least four major sanctions risks: cooperation with sanctioned Russian banks, supplying sanctioned mining companies, producing explosives in Russia, and importing detonators. While EU and U.S. sanctions do not directly apply to Russian companies, Maxam has remained the owner of these subsidiaries and maintained full control until February 2024.

YUII-Sibir’s financial disclosures show one major client was EuroChem, a fertilizer company also working with Russian military factories. In December 2024, an investigation by Reuters found that EuroChem plants supplied massive quantities of acetic and nitric acids to the Sverdlov Plant, a key artillery munitions manufacturer in the town of Dzerzhinsk. These deliveries could have been enough to fuel the production of up to 500,000 large-caliber artillery shells.

A screenshot from the notes to YUII-Sibir’s financial statements.

By the end of 2023, YUII-Sibir’s debtors included the firm Polyus Krasnoyarsk JSC, Russia’s largest gold miner, which came under U.S. sanctions in May 2023.

In 2023, the company secured a 320 million ruble ($4.08 million) loan from Sberbank, which had been under EU, U.S., and UK sanctions since April 2022. In 2023, Maxam’s Russian entity paid 40 million rubles ($510,000) in dividends and other payments to its parent company. Although these actions do not directly violate the sanctions, taken together they fall significantly short of the company's obligation to make every effort to ensure that its subsidiaries do not breach the restrictions imposed by the EU.

A screenshot from the notes to YUII-Sibir’s financial statements, indicating loans from Sberbank and VCI JSC.

A critical violation, however, stems from Maxam’s continued Russian operations after June 2023. EU Council Regulation 2023/1214, effective starting from June 23, 2023, bans the export of explosives, detonators, and related equipment of both civilian and military use to Russia. Despite this policy, Maxam continued importing detonators. Between March and April 2022, VCI JSC received $298,400 worth of detonators from MaxamCorp International S.L. In January 2024, it received a $1.414 million shipment from India’s Ideal Detonators Private Limited.

Although Maxam sought to sell its Russian assets, the deal was blocked by the Ministry of Industry and Trade, which must approve the exit of all foreign companies from their Russian business holdings.

Proof that Maxam remained active in explosives production after 2022 includes new intellectual property filings. On April 24, 2023, Maxam Russia applied to register a utility model for a vertical industrial mixer that is used to produce emulsified explosives. The inventors were two Spanish nationals: Raquel Vivanco González of Maxam’s R&D division and Fernando Beitia Gómez Segura, Maxam’s then-director of bulk materials technologies.

Detonators for sabotage units

Although most Maxam clients in Russia are civilian companies, the firm had direct ties to the Russian Defense Ministry until at least 2017. On August 17, 2017, VCI JSC signed a 3.6 million ruble ($46,000) contract with Military Unit No. 44239 to supply eight types of MS, ML, and X series detonators, which are used in everything from mining to precision blasting with programmable delays.

Unit 44239 is the successor to the KGB's Central Research Institute of Special Technology, now part of the FSB. It is involved in developing weapons for Russia’s special forces and contributed to the creation of “silenced” weapons like the VSS Vintorez sniper rifle and AS Val assault rifle.

Imported detonators can be highly useful to a sabotage unit for several reasons. Their millisecond-level synchronization precision allows for the creation of complex detonation networks, which can be employed to destroy large-scale infrastructure such as bridges, dams, or power grids. Their waterproof design enables use in underwater demolitions, while their compact size and non-electric initiation systems help evade electronic detection.

Between 2015 and 2017, VSI JSC signed 12 contracts with this military unit worth over 8 million rubles ($102,000). Details of more recent defense procurement contracts remain limited.

Apart from its direct deliveries to the Russian Ministry of Defense, VSI also worked with defense factories. On Aug. 20, 2018, the company signed a government contract with FKP “Saransk Mechanical Plant” for the supply of non-electric initiation systems. This enterprise is part of the state-owned defense corporation Rostec and manufactures detonation mechanisms for military applications.

Explosive components from Uzbekistan

In addition to its Russian production, in 2007 Maxam acquired a 49% stake in Uzbekistan’s Chirchiq Nitrogen Fertilizer Plant. Now called Maxam-Chirchiq JSC (АО «Максам-Чирчик»), the plant is 51% owned by state-run Uzkimyosanoat and 49% by MaxamCorp International S.L. It produces key components for explosives: 450,000 tons of ammonium nitrate annually, along with urea, ammonium sulfate, and low-density ammonium nitrate (LDAN). Ammonium nitrate is critical for both industrial and military explosives, and major customers include Iran and Russia.

While The Insider could not confirm direct shipments from Maxam-Chirchiq to Russia, customs data show a surge in ammonium nitrate exports from Uzbekistan to countries bordering or friendly with Russia. According to UN Comtrade, direct exports to Iran rose from 510 tons in 2022 to 3,544 tons in 2023. Shipments to Kyrgyzstan rose from 21,900 tons in 2021 to 44,200 tons in 2024. Latvia, which imported no ammonium nitrate in 2021, imported 6,600 tons in 2022 and 8,600 tons in 2023.

Export of ammonium nitrate from Uzbekistan in 2021-2024.

The Insider reached out to Maxam, Spain’s Department for International Trade in Dual-Use and Defense Goods, and the EU’s Directorate-General for Financial Stability (FISMA) overseeing sanctions enforcement. No responses were received by the time of publication.