The last stand over the steelworks of Mariupol is more significant than most people appreciate.
The thing about former Soviet steelworks is that they’re fairly unique in the world due to their scale. The capitalist system has never been able to produce equivalents due to the uneconomic upfront costs. Yet the scale has brought unique capabilities with it, such as the ability to manufacture neon gas.
Keep that in mind over the next few days as control over the steelworks is determined: about 90 per cent of all global neon supply comes from Ukraine, with the vast majority of that produced at the Azovstal plant, owned by Metinvest.
The other major producer is a steel plant based in Odessa, also owned by Metinvest, which according to reports on Twitter is now back up and running.
Metinvest is owned by one of Ukraine’s richest men, Rinat Akhmetov. Before the war, Akhmetov, who hails from the Donetsk region and is a staunch opponent of President Zelensky, was estimated to be worth at least $4bn. He is best known in the UK for owning one of Britain’s most expensive flats at One Hyde Park in London. But in terms of the war, his allegiances are with Ukraine not Russia.
“But Izzy,” I hear you saying, “now is not the time to worry about neon supply for kitsch 80s cocktail bar revivals”. This is true… if only it were that simple.
Alas, neon usage is far more critical than that. Neon is an essential input in the manufacture of semiconductors, space rockets, and ballistic missiles among other things. (We will have more on the critical role played by noble gases in the global economy in an upcoming Spotlight piece very soon.)
For now, it’s worth noting the Azovstal works were originally established in 1930 and operated pretty much nonstop until the plant was occupied by Nazi forces in 1941. When the works were finally recaptured by the Soviets in 1943, they were rebuilt to their current massive scale. To get a sense of the proportion of the plant, as well as its market importance, it’s worth taking a gander at some of the vintage Soviet promotional material that’s out there on YouTube.
Even more delightful is this 1993 promotional film:
This is not just another industrial site.
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