South Africa’s government has halted the supply of artillery shells from Rheinmetall’s plant to Poland.
According to Polish newspaper Rzeczpospolita, South Africa’s National Conventional Arms Control Committee (NCACC) indefinitely suspended the approval of an export permit to Poland, leading to the cancellation of Poland’s order for 155 mm artillery ammunition from Rheinmetall Denel Munition (RDM).
Around 50,000 155-mm shells were initially ordered by Poland in 2022 to replenish its stockpile after the Russian invasion of Ukraine. The shells were to be manufactured by the South African company Rheinmetall Denel Munition, which is 51% owned by German Rheinmetall.
However, these shells were never delivered. The contract with RDM, a South African company partly owned by German Rheinmetall, was terminated due to implementation problems by subcontractors.
The South African government indirectly blocked the ammunition deliveries to Poland, fearing that they might end up in Ukraine. South Africa’s proximity to Russia, as a member of the BRICS alliance, likely influenced this decision.
“The deliveries of ammunition to Poland were blocked – more or less directly – by the government of the Republic of South Africa, fearing that it could be sent further, to Ukraine. After all, South Africa is closer to Russia, with which it is, among other things, in the BRICS alliance, than to Ukraine,” Rzeczpospolita reported.
Poland can produce only 30,000 shells annually, relying on subcontractors, mainly from Slovakia. However, Poland needs at least one million rounds of 155-mm ammunition to effectively defend itself.
Ezra Jele, from the NCACC, revealed in 2022 that the Polish permit worth R893 million was on hold. While no UN Security Council embargoes exist on Poland, concerns about diversion to Ukraine likely contributed to the delay.
The NCACC has also put some export permits to Saudi Arabia, Turkey, and the United Arab Emirates on hold, causing much frustration and lost income for South Africa’s defence industry.
Poland is now seeking local procurement. In December 2023, it signed a $2.75 billion contract with the PGZ-Amunicja consortium for nearly 300,000 155 mm artillery shells. Deliveries are scheduled for 2024-2029. The program aims to support domestic production capacities for both local use and export.
Poland may establish its own artillery plant, and the government approved a secret decree to expand ammunition production and purchase in March 2023.
Last year, U.S. Ambassador to South Africa Reuben Brigety claimed that South Africa supplied arms and ammunition to Russia. South Africa denied any evidence of such shipments.
Meanwhile, Rheinmetall reported a significant increase in revenue in the first half of 2024, an increase of 33% to approximately 3.8 billion euros. This growth is part of the company’s broader ambition to become one of the world’s leading companies in the defense sector by the end of this decade.
Armin Papperger, CEO of Rheinmetall, outlined the company’s strategic vision, stating that the company aims to reach an annual turnover of 40 billion euros by 2030. Papperger stressed that if the 10 billion euro revenue threshold is exceeded this year, an increase of 40% year-on-year will be achieved and the company will be well positioned to achieve its long-term goals.
Rheinmetall Denel Munition (RDM), is expanding its operations to meet the growing demand for artillery ammunition. The company is running 24-hour-a-day shifts at its plants across South Africa and is investing hundreds of millions of rands in its expansion
Meanwhile, Rheinmetall Denel Munition (RDM) is poised to significantly benefit from a historic framework agreement for 155 mm artillery ammunition from the German military.
In January 2023, a long-time NATO customer awarded RDM a framework contract for the supply of 155mm ammunition of the proven Assegai product line.
Meanwhile, German defense giant Rheinmetall has acquired a majority stake in the business of Resonant Holdings Ltd, a leading South African specialist in plant engineering for chemical applications.