Rumors have circulated that Rheinmetall, a renowned German defense company, has abandoned its initial plans to construct a significant munitions factory in Germany. According to Hart Punkt, the conglomerate has not progressed beyond the drawing board stage for this ambitious project.

Speculation suggests that the German federal government is hindering progress, claiming that Rheinmetall sought financial support for the venture, but Berlin denied the funds. Ingo Gedehens, a politician connected to the German defense budget, alleges that Berlin quietly allowed the project to fade away rather than investing taxpayer money. Hart Punkt quoted Gedehens as saying, “Rheinmetall wanted to build a new factory, but it seems the government chose to silently abandon the project.”

Amidst these revelations, European ammunition manufacturers face increasing pressure. Spain outsourced 120 mm ammunition production to Rheinmetall, inviting bids for 155 mm artillery rounds. In mid-December, the Spanish government announced orders with Rheinmetall Expal Munitions worth $4.67 million for various explosive products.

In August, Rheinmetall acquired the Spanish company Expal Systems for $1.3 billion, with operations continuing in Spain and potential expansions.

For Ukraine, the Spanish Ministry of Defense allocated $531 million for 155mm artillery ammunition. In December, Rheinmetall announced a major order worth €142 million for 155mm ammunition, destined for Ukraine, with deliveries expected by 2025.

Aside from the abandoned munitions factory, Gedehens disclosed that the Ministry of Defense underspent on ammunition in 2023. Expenditure amounted to 845 million euros, 25 percent less than the allocated budget. In 2023, the Ministry could have entered contracts worth up to 1.8 billion euros, but only committed around 630 million euros, resulting in a wasteful overspend of 1.2 billion euros.