Estonia cannot direct Silmet’s business decisions, ministry says

Estonia cannot directly control the business decisions of NPM Silmet, a Canadian-owned company that continues to use Russian raw materials, the Foreign Ministry told ERR. The ministry said it has urged the company to find alternatives but cannot continuously monitor its operations.

The ministry’s comments follow Foreign Minister Margus Tsahkna’s statement that he would set a deadline for Silmet to stop using Russian raw materials. Tsahkna said the company could end its reliance on them as early as the start of next year.

At Estonia’s request, a Russian company supplying rare earth metals to Silmet was left out of the European Union’s 22nd package of sanctions against Russia.

The ministry said Silmet’s dependence on Russian raw materials had been known publicly for a long time, with Estonian media reporting on the issue as early as 1995. It described the reliance as both a business risk and a strategic vulnerability that Russia could exploit.

The ministry said it maintains regular contact with Estonian companies, including Silmet, and has stressed the need to find alternative suppliers. It has also worked with the European Commission, which is responsible for the EU’s common trade policy, to support efforts to open non-Russian supply channels.

On October 9, the European Commission selected Silmet’s Silmet 2.0 development project as one of 46 new EU strategic projects. The project aims to modernise the plant’s production capacity, enable the use of alternative raw materials and reduce European industry’s dependence on Russia. The ministry said the designation could help Silmet carry out the development and reduce its reliance on Russian supplies.

The ministry said potential alternative sources suitable for Silmet may be found in Latin America, Asia and Africa. The company itself is best placed to assess whether specific sources fit its production processes and technology. The ministry said Silmet should explain publicly as soon as possible how it plans to end its dependence on Russian raw materials.

Growing international competition for limited raw material supplies is making it harder to find alternative supply channels, the ministry added.