CNN
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The steel mill that looms over low-slung neighborhoods in Pueblo, Colorado, is a rare bright spot for American manufacturing. Once part of the state’s largest private employer, pumping out steel that was used to build rail lines across the Western US, it is now in the midst of a major expansion and recently became the world’s first steel plant to run almost entirely on solar power.
But in the wake of the invasion of Ukraine, the steelworkers and their city are grappling with an unpleasant reality that is no longer easy to ignore: The mill is owned by a company that has been accused of potentially supplying steel to build Russian tanks and whose largest stakeholder is a close ally of Russian President Vladimir Putin.
The plant, which still ranks among the largest employers in the small city of Pueblo, was bought in 2007 by Evraz, one of Russia’s major steel-producing companies. Evraz’s biggest shareholder is the oligarch Roman Abramovich, who was sanctioned by the United Kingdom, the European Union and Canada last month.
In announcing its sanctions, the UK government alleged that Abramovich controlled Evraz and that the company was “potentially supplying steel to the Russian military which may have been used in the production of tanks.” Abramovich was involved in “destabilising Ukraine” through Evraz, the sanctions office wrote.
Evraz, which owns several other steel plants in Oregon and Canada in addition to the Pueblo mill, has denied that it supplies the Russian military and tried to distance itself from Abramovich. But its stock fell by 90% from the beginning of the year before it was suspended from the London Stock Exchange in the wake of the invasion, and its entire board of directors quit. The company nearly defaulted on its debt last month due to a sanctions-related delay in a bond payment.
Evraz’s North American subsidiary and its employees say the steel produced in the US is not going to Russia. The North American operation doesn’t send money to the parent company, and its profits are reinvested in its US and Canadian operations, according to executives.
But in recent years, the parent company’s operations have resulted in billions of dollars in dividends that have largely gone to Abramovich and a handful of other Russian oligarchs. Advocates for Ukraine say they’re distressed that the US hasn’t followed its allies in sanctioning Abramovich, and that a figure with close ties to Putin still holds the largest stake in the company that owns the Pueblo mill.
“There is no clean money among the oligarchs,” said Marina Dubrova, the founder of Ukrainians of Colorado, a non-profit organization that has raised funds to send medical supplies to Ukraine. Even if he were to own a “half percent, even one-tenth of a percent” in the company, she argued, “Abramovich has to be sanctioned and his portion has to go to the highest bidder.”
So far, executives and local employees at the Pueblo plant say there has been no impact on their day-to-day job. But some workers are worried about whether that could change if more sanctions go into effect.
“Just the uncertainty is scary, it’s real scary,” said Rique Lucero, a metallurgical technician who has worked at the plant for 14 years. “We wonder how the war is going to further affect us.”
The Evraz situation is an example of how Russian investment in the West could be complicating sanctions: The company employs more than 1,600 people in the US, and the need to avoid job losses could make officials more cautious about sanctioning Abramovich, sanctions experts said.
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