Belarus’ Foreign Ministry and state-owned potash producer Belaruskali OAO are preparing to take legal action against Lithuania over the country’s ban on transporting Belarusian potash, or NPK fertilizers, through Lithuanian territory, according to bne IntelliNews, citing the website of Lithuania’s public broadcaster LRT.
Belaruskali has filed a notice of arbitration, alleging that Lithuania’s actions constitute a breach of a bilateral investment-protection agreement, and it is seeking approximately €1 billion (approximately $1.1 billion) in compensation, according to the report.
Lithuania’s government terminated the railway transit contract between the country’s state-owned railway company Lietuvos Geležinkeliai’s (LTG) and Belaruskali as of Feb. 1, 2022, over national security concerns (GM Jan. 14, 2022). The Lithuanian government’s decision came in the wake of EU and US sectoral sanctions on Belarus, which included, among other things, a ban on the trading and transit of potash.
The removal of the Lithuanian rail route effectively blocked Belaruskali’s key export route. Before the imposition of Western sanctions, the Belarus producer and its marketing/export arm, Belarusian Potash Co. (BPC), shipped 10-11 million mt of potash annually through the Lithuanian port of Klaipėda.
Lithuania’s Transport Ministry confirmed the initiation of legal proceedings but declined to provide further comment, according to the report.
Since the Lithuanian rail ban, Belarus began reorienting transshipment of its potash exports to Russian ports and has also increased its exports to China by rail.
Belarus in July reiterated its plans to export some 8 million mt of potash this year, the state-run news agency BelTA reported, citing Belarusian First Deputy Prime Minister Nikolai Snopkov (GM July 21, p. 1). He said Belarusian potash transshipment through Russian ports could increase to 8.4 million mt this year, up from 3 million mt in 2022.
Belarus railed more than 1 million mt of potash to China in 2022, according to an Interfax report in January, citing Belarus’ then Transport and Communications Minister Alexey Avramenko (GM Jan. 6, p. 28).
According to Green Markets calculations, however, global potash imports of Belarusian potash to various countries were only 3.5 million mt this year through July, equal to last year’s level (GM Sept. 29, p. 27).