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Uralkali and Belaruskali won’t find agreement by 2014

Uralkali and Belaruskali won’t find agreement by 2014

The companies have not managed to settle the issues encountered in the middle of 2013.

Uralkali and Belaruskali will not be able to create a joint venture in 2014 to sell products in the world market, Bloomberg informs with a reference to a source of Argus FMB Potash.

The companies have not been able to settle the issues encountered in the middle of 2013, when Uralkali stated that it withdraws from the joint venture with the Belarusian company, changes the strategy of the “volume over price” and decreases the potash price from $400 to less than $300 per ton.

In particular, the companies have a dispute over distribution of revenue from transportation of goods and demurrage charges, the agency explains.

Besides, it is noted that over the seven months of 2014 the export of the Belarusian potash fertilizers has grown by 50% as compared to the same period of the previous year and reached more than 5.6 mln tons.

In June this year the director general of Uralkali Dmitry Osipov stated that it was too early to speak about forms of cooperation with Belaruskali, and named the meeting of Dmitry Mazepin (the owner of Uralkhim group, who owns 20% of the shares of the Russian potash company) and Alyaksandr Lukashenka “a preliminary stage of talks,” ITAR-TASS reports.

In summer 2013 Uralkali withdrew from the Belarusian Potash Company (BKK), the trader joint venture with the state Belarusian company Belaruskali. The decision of Uralkali collapsed the market of potash manure: prices fell by one third, the largest world manufacturers of potash fertilizers lost billions of dollars of capitalization. After that criminal cases for abuse of power were opened in Belarus against a number of officials of the BKK, including Vladislav Baumgartner, who was a director general of Uralkali then.

In addition, the authorities of Belarus put 4 managers of Uralkali who also were on the key positions in the BKK and were responsible for sales, on the list of wanted persons. The conflict connected with Uralkali finally resulted in the change of the key shareholders of the company. In particular, Suleyman Kerimov sold his shares to ONEKSIM owned by Mikhail Prokhorov, anoter major shareholder became Dmitry Mazepin’s Uralkhim.

Uralkali is one of the leading world potash manufacturers. The company’s business assets include 5 mines and 7 concentrating plants, situated in the towns of Berezniki and Solikamsk (the Perm Territory).

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