Obscure however essential uncooked materials fuels geopolitical dispute in Japanese Europe

KLAIPEDA, Lithuania — For almost 20 years, lengthy freight trains laden with reddish-brown sand have rumbled by way of Lithuania’s predominant port on the Baltic Sea, offering an financial lifeline to Aleksandr G. Lukashenko, the autocratic president of neighboring Belarus.

That lifeline is about to be reduce on February 1 after the Lithuanian authorities determined to cease wagons carrying Lukashenko’s largest supply of cash: potash fertilizers for export to Europe and past through the port of Klaipeda.

Lukashenko’s opponents welcome the transfer, whereas others worry an unintended consequence: it advantages Russia, which is anticipated to take over the transport of Belarusian potash and will strangle a good portion of the world’s provide of the obscure however important uncooked materials.

Potash, which Russia additionally produces, may not appear like a lot, however valued as a plant nutrient important to international meals safety, it has greater than doubled in value over the previous yr, producing billions of {dollars} in extra earnings for Mr. Lukashenko and different producers. The closure of Belarus’ solely export route for the commodity by way of the Baltics will push costs even greater. The Lithuanian State Railways and the port of Klaipeda derive a big a part of their revenues from potash. Disputes amongst Lithuania’s political and enterprise elite over what to do about commerce restrictions had been so heated that in December the federal government provided to resign over the matter. The uproar erupted after the chairman of parliament’s international affairs committee, Zygimantas Pavilionis, accused the federal government of betraying the US, a key ally that imposed sanctions on Belarus’ state-owned potash producer final yr, and a dictator to assist.

Mr. Pavilionis, a hawkish former Lithuanian ambassador to Washington, stated in an interview that the problem is so tense as a result of “there’s some huge cash at stake”.

In a December letter to Lithuania’s state railways, the US Treasury Division stated American sanctions in opposition to a significant Belarusian potash producer don’t apply to international firms, however known as for what it known as a “risk-based strategy” to compliance, suggesting that this can be issues sooner or later.

Belarusian opposition chief Svetlana Tikhanovskaya, who lives in exile in Lithuania and has lengthy campaigned for a halt to potash provides, stated in an interview that she was happy on the finish of what she known as an “immoral” deal, the termination of which is able to assist empty folks “the deepest pocket of the dictator”.

That bag is Belaruskali, a large state-owned potash producer that serves as a money cow for Mr Lukashenko’s authorities. The corporate is Belarus’s largest taxpayer and largest exporter and accounts for round 20 p.c of world potash provides.

However the US-led push to bankrupt Mr Lukashenko has fueled alarm over the ensuing windfall in Russia. Canada, the world’s largest potash producer, may even profit from an anticipated value hike, however Russian good points go effectively past value.

“Russia applauds,” Algis Latakas, the director of the port of Klaipeda, stated in an interview. Belaruskali, he stated, will most definitely merely change to Russian trains and ship the products to Ust-Luga, a Russian port close to St. Petersburg whose improvement has lengthy been a pet challenge of President Vladimir V. Putin.

Mr Latakas stated he understood his authorities’s need to “battle non-democratic forces” however warned that the tip end result on this case might effectively be that “Russia is given a significant financial benefit” and the “energy to manage meals costs”. .

Whether or not sanctions work has lengthy been the topic of scholarly and political debates, however for these which were imposed on Belarus, the outcomes to date have been significantly meager.

Over the previous yr, because the European Union and United States imposed a number of rounds of financial restrictions on Belarus, the worth of commerce between Europe and the Japanese European nation has virtually doubled. That is primarily on account of sharp will increase within the value of commodities exported by Mr. Lukashenko, primarily potash and oil merchandise, which have skyrocketed in worth partially due to rising uncertainty about provides attributable to sanctions.

“Lukashenko simply makes extra money,” lamented Laurynas Kasciunas, the pinnacle of the Lithuanian Parliament’s Nationwide Safety and Protection Committee.

As a substitute of being persuaded to launch political prisoners as hoped, Mr Lukashenko has solely arrested extra folks, round 980 of whom at the moment are behind bars for his or her political actions, in keeping with Viasna, a bunch that screens human rights in Belarus. That is greater than double what was reported final June, when the present spherical of sanctions started after a Ryanair passenger jet made an emergency touchdown within the Belarusian capital of Minsk with a younger dissident who was promptly arrested.

Ms Tikhanovskaya acknowledged “the paradox that sanctions have been imposed, however Belarus’ earnings has elevated” and stated that stress on Mr Lukashenko should be stepped as much as apply “insufferable stress” to shake the loyalty of officers and businessmen , on which Mr. Lukashenko relies upon to remain in energy.

Essential to its financial survival is potash, of which Russia and Belarus collectively produce round 40 p.c of the worldwide provide.

Producers from each international locations have fought exhausting for export markets for years, however with Belaruskali now more likely to develop into depending on Russian railways and ports to promote its merchandise overseas, Moscow will acquire a strong maintain on the Belarusian firm. That might allow it to make use of potash in a lot the identical method it makes use of its management over huge pure fuel reserves to distort the market and put stress on European international locations.

“Everybody throws round fairly slogans about democracy, however the end result will likely be precisely the alternative of what they need,” predicted Igor Udovicky, the bulk proprietor of a bulk terminal within the port a part of Klaipeda owned by Belaruskali.

“Whoever controls Kali controls the meals provide all over the world,” he stated. “We’re solely giving Putin a nuclear weapon, however in contrast to the weapons he already has, that is one he can really use.”

Mr. Udovickij has a transparent curiosity in freight trains working from Belarus to Klaipeda. However others with no cash at stake worry that Russia would be the predominant beneficiary of efforts to halt potash visitors by way of Lithuania, which was once a part of the Soviet Union – in opposition to its will – however is now a member of the European Union and NATO is.

“We have now to be very cautious when imposing sanctions, not simply to create alternatives for others,” stated Mr. Kasciunas, the chairman of the Nationwide Safety and Protection Committee. As a staunch American ally, Lithuania is dedicated to supporting the US Treasury Division’s sanctions in opposition to Belarus, however the nation additionally has different considerations, specifically Russia.

“No one right here is for Lukashenko, however everybody worries about Russia probably the most,” he stated. “Very difficult geopolitics play a task in potash.”

For years, Russia has been pushing in useless to realize management of Belaruskali, the crown jewel of Lukashenko’s in any other case largely run-down industrial base. Not like Belarus’ different predominant supply of earnings, petroleum merchandise, which rely upon crude oil provides from Russia, the potash firm doesn’t rely upon Russia for enterprise. No less than not till this month.

Mr Lukashenko, who has requested the Kremlin for assist to quell big road protests sparked by a presidential election extensively seen as rigged in August 2020, has more and more misplaced his skill to withstand Russian calls for. And Belaruskali now seems to be more and more susceptible.

Not solely has the corporate misplaced its export route by way of Lithuania in current weeks, but additionally its largest European buyer, Yara, a semi-state owned Norwegian firm.

Yara introduced Jan. 10 that it will part out all purchases of Belaruskali and cease shopping for by April 1.

Ms Tikhanovskaya dismissed considerations that sanctions would solely push her nation nearer to Russia, as an argument put ahead by Mr Lukashenko and his supporters “to attempt to cease principled motion – it is all a bluff”.

Nonetheless, Lithuania will lose lots of of hundreds of thousands of {dollars} if it halts Belarusian exports through Klaipeda, and authorized claims might resist $15 billion for damaged contracts, in keeping with an inner authorities report assessing potential damages. Mr. Udovickij, for instance, plans to sue the federal government for top damages.

However for a small nation depending on the US for insurance coverage in opposition to an more and more assertive Russia, there’s far more at stake than cash, Transport Minister Marius Skuodis stated in an interview. Kali, he added, “is a really troublesome geopolitical challenge.”

Tomas Dapkus contributed reporting from Vilnius, Lithuania.