Despite the Weak Revenues, Why Did Russia Suddenly Start Paying Attention to Phosphates in Syria?

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Two years after the Russian intervention in Syria to prevent the fall of President Bashar al-Assad, specifically in 2017, Moscow officially expressed its interest in seizing its phosphate fields, and worked on this through agreements that lasted for decades.

However, Russia's continuous invasion of its neighbor Ukraine since the dawn of February 24, 2022, re-calculated the Russians about this wealth, and prompted it to tighten more control over the Syrian territories, to distance the active international competitors from it, especially Iran.

It is noteworthy that Syria was in 2011 ranked fifth on the list of phosphate exporting countries in the world.

 

 Investment in Phosphate

In a new step to strengthen protection for phosphate mines in Syria, Russian forces completed the construction of a helipad near the Al-Sawana Phosphate Company, east of Homs Governorate, Palmyra News Network reported on April 11, 2022.

This came after the Iranian Revolutionary Guards militia withdrew from al-Sawana phosphate field, years after its seizure, as part of previous understandings between Moscow and Tehran.

Russia has sent groups of the Fifth Corps and Liwa al-Quds militias, which are logistically and militarily backed by it to the vicinity of the field with the aim of securing it.

Syrian phosphates are currently being invested from two surface mines, namely al-Sharqiya and Khneifis, located east of Homs, and the annual production capacity of the two mines is about 3.5 million tons that can be exported, the majority of which is from al-Sharqiya mine.

 A limited part of Syrian phosphates is used internally in the manufacture of phosphate fertilizers and is shipped to the Homs Fertilizer Factory, and the largest portion is exported to several countries via the railway that connects the mines to the port of Tartus.

There are five phosphate plants in Syria, four plants in al-Sharqiya mines and one plant in Khneifis mines.

The Assad government seeks to restore competition in the global market for all types of previously produced phosphates (washed, dry, mixed and wet), especially since Syrian phosphates are considered among the best in the world.

The geological reserve of wet phosphates that can be invested in al-Sharkia mines in Palmyra, Syria, is about 1.8 billion tons, and in Khneifis mines about 150 million tons.

 

Production Value

However, Russia's economic aspirations and the search for economic returns in foreign exchange due to the production and export of phosphate from Syria come despite it occupying fourth place at the level of global exporters.

The annual average production of phosphate in Russia is 14 million tons, and Russian exports represent about 14 percent of the total world trade of urea and ammonia nitrogen fertilizers, about 21 percent of potassium fertilizers and 13 percent of phosphate exports.

After the invasion of Ukraine, Russian exports were subjected to US and European sanctions, including phosphate, which is used in the fertilizer industries, causing disruption to its supplies and a rise in world food prices.

Russia focused on Syrian phosphates, as Russian Deputy Prime Minister Dmitry Rogozin said in December 2017, that his country is the only country that will work in the Syrian energy sector and rebuild energy facilities.

“In Syria, there is the largest phosphate field that can be invested in, and it has products that are required in many countries, such as fertilizers,” he added.

On April 14, 2018, Bashar al-Assad ratified a 50-year contract under which Russia's Stroytransgaz Logistics would extract phosphate ores from the huge al-Sharqiya mines in Palmyra, central Syria.

Under the contract, production will be shared between the two parties, as the regime’s General Organization for Geology and Mineral Resources will account for 30 percent of the production amount, compared to 70 percent for the Russian company, with an annual production of 2.2 million tons from mines with geological reserves of 105 million tons.

This was preceded by the Assad regime’s ratification on April 23, 2017, of an agreement between the aforementioned corporation and STNG Logistic, a subsidiary of Stroytransgaz, with the aim of carrying out the necessary maintenance work for phosphate mines and providing protection, production and transportation services to the export port (Selaata in Lebanon).

Stroytransgaz, in which the Russian billionaire oligarch Gennady Tymoshenko owns a 31.5 percent stake, is the only known investor in Syria, which was subjected to US, British and European sanctions after his country's invasion of Ukraine.

On the other hand, Syrian economic experts believe that Russia's revenues from Syrian phosphates are very meager, as long as there is a security threat to the extraction processes, including ISIS, which is present in the Syrian Badia in the form of cells.

They had previously targeted the train transporting phosphates to the petrochemical plant in Homs and then to the port of Tartus.

The trade statistics published by the countries importing from Syria suggest that the discussion about the importance of Syrian phosphates and the Russian role is greatly exaggerated, and is no more than part of the wealth that Russia swallowed as part of its military intervention bill, especially since it seized a number of oil wells in Deir Ezzor in 2021.

For example, Syria exported phosphate worth more than $270 million in 2010, while the value of exports did not exceed $27 million only in 2018, as the amount exported to Serbia was $21.5 million, $3.2 million to Greece, and $2.6 million to Ukraine.

The Syrian Sanad group for protection and security services is responsible for protecting Russian phosphate shipments from central Syria to the port of Tartus.

 

Russian-Iranian Rivalry

In this context, Karam Shaar, an academic and researcher at the Middle East Institute in Washington, confirms that “there is no connection between Moscow's interest in Syrian phosphates after the invasion of Ukraine, especially since Russia is a source country for it.”

Also, Syrian phosphates have been exported without interruption for more than two years, but this does not cancel out the Russian companies' rush to invest its extraction out of profit, according to him.

Shaar added in a statement to Al-Estiklal that “there is no change in Moscow's dealings with the Syrian phosphate sector,” pointing out that “there is an actual dispute between Russia and Iran over its fields east of Homs.”

During the last decade, Russia was able to keep Iran out of the Syrian oil, gas and phosphate equation, by strengthening its presence in the areas of the spread of these wealth or by withdrawing agreements in its favor from the regime.

Given Iran's lack of phosphates, it focused on many of its officials' meetings with the Syrian regime to increase its share of it, although Tehran agreed with Assad in 2016, to establish a joint company, to extract and export it.

But in 2018, Russia entered the line, and acquired the largest proportion of Syrian phosphates.

Economists confirm that it has signed contracts with the regime to invest in the phosphate reservoirs, al-Sharqiya and Khneifis, whose reserves amount to about 105 million tons.

However, Iran gets a share of the phosphates, and the Revolutionary Guards militia is responsible for transporting quantities of it by land through Iraq, as well as by sea through the port of Latakia.

On March 16, 2022, the Syrian regime's Oil Minister, Bassam Tohme, discussed again with advisor to the Minister of Defense and Chairman of the Iranian Economic Cooperation Council Mostafa Esbati, ways to enhance cooperation in the fields of oil and mineral resources.

The two officials stressed the need to follow up and expedite the implementation of previously agreed projects, especially as they include areas of cooperation in the sectors of base oils and compressed gas to operate machinery and secure supplies for compressors, turbines and excavator supplies through bartering with Syrian phosphates or with oil distillates.

On January 12, 2022, the head of the Iranian-Syrian Chamber of Commerce, Kiwan Kashfi, announced that the majority of goods exported to Syria are related to the engineering industries as well as foodstuffs and medicines, while he said that Syrian exports to Iran are mostly phosphates.