Rising Geopolitical Tensions Fuel Landmine Production Boom: Defense Sector Opportunities Amid Eastern European Conflict

The withdrawal of Ukraine and several NATO allies from the Ottawa Convention—the global treaty banning anti-personnel landmines—has unleashed a surge in demand for military ordnance production. As Eastern European nations prepare for prolonged conflict with Russia, defense manufacturers stand to benefit from a renewed focus on landmine development, while investors must weigh the risks of prolonged warfare and humanitarian fallout. This shift reshapes geopolitical risk calculations and opens doors to investment opportunities in defense sectors across Poland, the U.S., and beyond.

Geopolitical Context: A New Era of Militarized Defense

Ukraine's formal exit from the Ottawa Convention on July 1, 2025, marks a pivotal moment in Europe's security landscape. The decision, driven by Russia's ruthless use of landmines to stifle Ukrainian advances, has been followed by similar moves from Poland, Finland, and the Baltic states. These nations, citing Russia's destabilizing tactics and border threats, now seek to bolster defenses with anti-personnel mines—a move that aligns with the U.S.'s 2024 decision to supply Ukraine with such weapons.

The geopolitical calculus is clear: landmines are cost-effective tools for slowing enemy advances and defending vast, poorly fortified borders. With Russia's war in Ukraine entering its fourth year and showing no signs of abating, Eastern European nations are prioritizing military readiness over humanitarian norms. This creates a market for companies capable of producing modern landmine systems, including command-detonated variants that comply with international law.

Defense Sector Opportunities: Winners in the Landmine Renaissance
The withdrawal from the Ottawa Convention directly benefits defense contractors with existing ordnance production capabilities or the capacity to pivot into this space. Key players include:

1. Poland's Defense Industry:
   Poland's defense ministry has already outlined plans to restart landmine production, leveraging its existing military infrastructure. Companies like PGZ (Polish Military Industry Group), a state-owned conglomerate, are positioned to capitalize on domestic demand. Investors should monitor PGZ's partnerships with international firms, as Poland seeks to modernize its arsenal.

2. U.S. Defense Giants:
   U.S. companies with landmine production experience, such as Raytheon Technologies (RTX) and BAE Systems (BA.L), are likely to secure contracts for supplying NATO allies. Raytheon's history of producing precision-guided munitions and BAE's expertise in landmine systems make them prime candidates for expanded defense spending in Europe.

3. European Defense Firms:
   Finland's Insta Group, which manufactures non-lethal defense equipment, has signaled interest in landmine production post-withdrawal. Meanwhile, Diehl Defence in Germany and Saab in Sweden may explore this space as neighboring nations normalize landmine use.

Risks: Prolonged Conflict and Erosion of Norms
Despite the near-term opportunities, investors must account for significant risks:
- Prolonged Conflict Costs: A drawn-out war could strain national budgets, diverting funds from defense modernization to humanitarian aid. Ukraine's landmine-contaminated territory—now covering 20% of its land—will require decades of cleanup, diverting resources from economic growth.
- Humanitarian Backlash: Civilian casualties from landmines (85% of all victims globally are non-combatants) could trigger global advocacy campaigns, pressuring governments to reinstate bans. The International Campaign to Ban Landmines (ICBL) has already intensified lobbying efforts, posing reputational risks to companies in this sector.
- Regulatory Uncertainty: While NATO allies may normalize landmine use, non-NATO states could face sanctions or diplomatic isolation. Russia, a non-signatory to the Ottawa Convention, remains a wildcard, as its escalation of tactics could further destabilize the region.

Investment Considerations: Balancing Risk and Reward
For investors, a tactical approach is essential:
1. Focus on Diversified Defense Players: Prioritize firms like RTX and BAE, whose landmine contracts represent a small portion of broader portfolios. Their exposure to aerospace, cybersecurity, and missile defense reduces reliance on ordnance sales.
2. Monitor Geopolitical Triggers: Track Russian military actions (e.g., drone attacks on Kyiv) and NATO exercises (e.g., U.S.-Polish drills) as catalysts for defense spending.
3. Avoid Pure-Play Landmine Manufacturers: Companies solely focused on landmines face reputational and regulatory risks. Investors should favor firms with ethical safeguards and dual-use technologies (e.g., command-detonated systems).

Conclusion: A Double-Edged Sword for Investors
The Ottawa Convention's unraveling presents a unique investment theme: a geopolitical shift favoring defense contractors, but one clouded by humanitarian and regulatory risks. While Poland and the U.S. stand to benefit from rising landmine demand, the long-term costs—both financial and moral—cannot be ignored. Investors seeking exposure should prioritize diversified, innovation-driven firms and maintain a watchful eye on conflict dynamics. In a world where security trumps norms, the defense sector's boom may come at the expense of lasting stability.