That’s some incredibly bad reporting and fuzzy math presented as facts:
The contract stipulates the creation of over 100,000 units of 155-mm ammunition via Expal, a Spanish company Rheinmetall recently acquired in November 2022 for a hefty sum of 1.2 billion euros.
Other, more credible reports state that the order is for several hundreds of thousands of DM121 shells - meaning the math here could be easily off by a factor of three or more.
Even Rheinmetall’s own website states that the order is for several hundreds of thousands of shells.
Which would mean that these shells would cost about as much as they always have, and maybe even significantly less.
Even if we use a “mid-range” estimate of €400 million for the 100,000 shells, that still leaves each shell costing €4,000.
I tried digging up US pre-war costs for a standard 155mm HE shell, earlier in the year, and found numbers online that were in the high $800 range. This is five times that. The munitions manufacturers are making bank on their pricing.
EDIT: Well, okay. Some of that could also be reduced efficiency, maybe due to reduced economy of scale; there are a number of manufacturers in Europe picking up the contracts. I don’t know what a typical pre-war shell price was in Europe.
And some of it is gonna be that a lot of capital goods used in production, machines and the like, were paid for way back. The new shells are gonna need new machinery and such.
It is a lot more expensive, though.
Sounds like you’re doing the math assuming 100k shells, which means these numbers are way off. You should check the other comment.
googles
Here’s an earlier Rheinmetall contract from late last year.
The Rheinmetall announced the conclusion of a contract with an unnamed European customer for 155-mm L15 shells. According to the official announcement, the agreement was concluded in December and covers the supply of 10,000 shells.
The value of the announced deal was about 33 million euros. That is, one 155-mm projectile under this contract costs 3.3 thousand euros. The deadlines for the order are quite vague: 2023.
The price per shell there is in the same ballpark as the numbers the article here lists.
According to that article, about an anonymous customer with a much smaller order, they’re about 65% more expensive. Not even close to what you claimed.
So… is this Kremlin propaganda or what?
The first order was given as 3300 euros per shell, the second 4000 euros per shell.
If you have numbers that show lower prices, I’d be interested in seeing them. So far, you’ve simply asserted that you think that the price surely must be lower than what’s in the articles.
EDIT:
Reznikov had urged the ministers in Stockholm to support an Estonian plan for EU countries to club together to buy 1 million 155-millimetre shells this year at a cost of 4 billion euros to help fight Russia’s invasion and launch a counter-offensive.
That’d be €4000/shell, which again is in line with the above numbers.
