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17 Oct 2012

Mikhail Gutseriev to build a new potash plant in Belarus

Russian businessman Mikhail Gutseriev  begins construction of a new potash plant in Belarus in March 2013 as he told reporters on October 11 in Sarapul.

"In Belarus, projects go, they are alive. Potash project there - in March we are starting to build the mine," - he said, adding that construction of the new plant will take three years.

According to him, it comes to producing 1.8 million tons of potash annually. Mikhail Gutseriev said that the project will be financed under the scheme 70 to 30. "We give 30% , there somewhere 500 million USD, and USD 1,5-1,3 billion provided by the bank," - he said, noting that the final decision on which bank will fund the project, was not yet made . "Either it (Sberbank..) or other banks," - said Mikhail Gutseriev discussing  participation of Sberbank in the project.

In late September the head of Sberbank German Gref said after his meeting with Alexander Lukashenko in Minsk that the bank is considering various investment projects in Belarus, including the development of potash deposits.

"We discussed our next steps, and investments. Now with several of our clients we are looking at various investment projects in Belarus, including one of the largest projects - the development of potash deposits," - said Mr. Gref. However, he said: "This is a project of Mikhail Gutseriev."

"We are very active in developing a business plan, and during the next six months, I hope we will be able reach a decision. This is a significant investment in Belarus. I think if we go to a decision, it will be a landmark deal for the country," - Gref said.

Construction of a new potash plant in Belarus is a British company JMC Global Energy plc, owned by Russian businessman Mikhail Gutseriev. On October 5, 2011 JMC Global Energy signed  a deal with the government of Belarus. According to it, the British company will produce potash fertilizer resources base Nezhinsky area (eastern part) and Smolovskogo and Luban the Starobin deposit of potassium salts.

New Potash Company will be named "Slavic potash” (or Slavyansky Kaliy in Russian) by Mikhail Gutseriev.


As previously reported by Mikhail Gutseriev, in general, the company plans to invest in the project 1 billion 750 million USD - "as it were, at least." Investor to invest in the project 1.5 billion USD, with 250 million USD, he plans to invest in infrastructure.

Under the terms of the investment a new potash plant to be built by 2017. But Mikhail Gutseriev believes that the project needs to be implemented more quickly. Earlier, he said that it "should be done by 2015."

The maximum capacity of the new potash plant is scheduled for 2021.

Earlier Mikhail Gutseriev noted that the planned capacity of "Slavkaliy" that is 1.1 million tons of potassium - it is only the first stage. According to him, if there is demand, the company will be able to increase capacity - up to 10.5 million tons of potash annually. Moreover, as stated Mikhail Gutseriev  the project could make Belarus' potash Mecca "in the world.

Mikhail Gutseriev is known in Russia as the owner of the Russian oil company "Russneft". In April 2010, he sold 49% of shares of "Russneft" to AFK "System". Based on financial statements "the system" for the package was paid 20 million USD. Another 2% of "Russneft" owned Sberbank. However operational control is still done by  M. Gutseriev as Sberbank gave one of its two positions on the board of directors "Russneft" to representatives of Mikhail Gutseriev.

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