Slavkali: situation in potash industry does not influence implementation of project on construction of new complex

BUSINESS NEWS has learnt this information from the management of the foreign-owned limited liability company Slavkali.

"Our Company does not sale and does not produce mineral fertilizers but only builds a new complex. The situation will be stabilized by the day when the project implementation is finished," representatives of Slavkali said.

Previously it was reported that experts forecast the decline in global prices for potash fertilizers by 25-30% to USD 300 per ton and less due to the decision of Uralkali (Russia) to stop deliveries of potash fertilizers through the Belarusian Potash Company.

At the same time, analysts expect that due to Uralkali’s decision a number of investment projects in the potash fertilizers industry will be suspended as their profitability will decline, terms of return on investment will be deferred or expenses on their implementation will not be returned.

However, representatives of Slavkali informed that the implementation of project on construction of potassium mining and processing complex in Lyuban District, Minsk Oblast, "is carried out according with the plan adopted by the investment agreement."

According to a source at the Company, the architectural design has been already drawn up and the state examination has been carried out.

"Today we are ready to launch the stage of drawing design preparation. According to this stage, we have to sign a contract with a general designer and after, via tenders, with all contractors which will build the infrastructure: power supply networks, railway and motor roads, gas and water supply systems," the source noted.

He added that after the construction is finished all infrastructure facilities will be transferred to state organization which will operate and maintain them. The source at the Slavkali Company declined to announce the size of financing planned to provide in 2013 having mentioned that this is the proprietary information.

It is planned to launch the construction of potassium mining and processing complex in Lyuban District, Minsk Oblast, in H1 2014.

The foreign-owned limited liability company Slavkali, a resident company of Belarus, is a daughter structure of the UK-based company GMC Global Energy plc (Great Britain and Northern Ireland) was registered in 2011. The main objective of the Company is to implement an investment contract for the project to build, commission, and operate a mining and processing factory with the designed output capacity of 1.1 million tons signed between Belarus and GMC Global Energy in October 2011. The factory will be build at the facilities of Nezhin area of the Starobin deposit of the potash salts.

The project provides construction of mining and processing complex, ore-dressing plant, gas turbine plant for own requirements, railway station "Slavkali" and other necessary facilities of infrastructure.

In October 2012 Russian businessman Mikhail Gutseriyev, who owns GMC Global Energy, stated the intention to start building the factory in March 2013. He said that the construction of the mine will take three years. According to Mikhail Gutseriyev, a Russian bank, including Sberbank of Russia, may take part in the project as an investor. The total volume of investments may reach USD 1.8-2 billion.