Lithuanian state-owned railway company Lietuvos Geležinkeliai’s (LTG) has received three requests from Belarusian companies to transport Belaruskali OAO potash/fertilizers, according to a report this week by Warsaw, Poland-based Belsat TV, citing LTG’s website.
According to the report, the requests have come from Belarus potash marketing/exporting company Belarusian Potash Co. (BPC), Belarus transport and logistics center Bellinertrans; and Belkali-Migao LLC, the Belarus-based potassium nitrogen/NPK production joint venture between Belaruskali and China’s Migao Corp.
BPC was reported to be asking for an agreement on the transport of potash from Jan. 24, arguing it is necessary for it to meet its obligations to sell potash through the Lithuanian port of Klaipėda.
The transit of Belarus potash on LTG’s railroads will halt from Feb. 1 following a decision by the Lithuanian government earlier this month to end the railway contract between LTG and Belaruskali over national security concerns (GM Jan. 14, p. 1).
LTG said it needs legal grounds to reject the three companies’ requests, and is reported to have submitted the requests to a Lithuanian special commission that will decide whether concluding contracts with these Belarusian companies threaten Lithuanian national interests, according to the report.
The decision to invalidate the current transportation contract between LTG and Belaruskali was due to the fact the contract was not put before the parliamentary commission, according to the report, citing Lithuania’s Head of the Committee of National Security and Defense of the Seimas (unicameral parliament) of Lithuania, Laurynas Kasčiūnas. LTG’s CEO Mantas Bartuska earlier agreed to step down an attempt to “de-escalate” the outcry (GM Dec. 17, 2021).
LTG does not rule out applications from other cargo carriers and intermediary firms to undertake the transit of Belarusian potash, but these – including private companies – would also have to first apply to the parliamentary commission for permission.
However, Kasčiūnas was cited by the report as saying the chances to bypass the ban on the transit of Belarusian potash/fertilizers in Lithuania were “almost zero,” given that the commission would consider such a transit “a threat to national security.”
Meanwhile, Belaruskali said this week it will demand “full compensation” from LTG for the losses caused by the termination of the contract to transport Belarusian potash/fertilizers,Belarus state-run news service BelTA reported, citing the Russian language ONT TV channel.
The Belarus potash producer said LTG will need to compensate “all the parties which stand to incur losses, including the companies’ partners in other countries.”
On Jan. 29, Belaruskali filed a complaint with the Vilnius Regional Administrative Court over the Lithuanian government’s decision to terminate the contract between Lithuanian Railways and the potash producer, according to a Bloomberg report citing BNS, which cited the court.
Most of Belarusian potash exports – some 10.7 million mt out of a total of 11.8 million mt in 2020 – as well as some NPK fertilizer exports, are railed via Lithuania’s rail system for onward shipment from the port of Klaipėda.
In a separate development, Belarusian logistics operator Beltamozhservice and a Chinese international transport company, Taitong International Transport Co., have signed an agreement on partnership and strategic cooperation aimed at making transportation between Belarus and China more attractive, according to a BelTA report this week, citing Beltamozhservice’s press office.
Taitong operates the Hebei-Europe International Freight Train, launched in April 2016, which runs between Hamburg, Germany, and the Shijiazhuang international land port in north China’s Hebei Province. According to media reports, the train takes around 18 days to travel between Shijiazhuang and Hamburg and carries around 100 TEU of cargo.
It is unclear if Belarusian potash cargoes will be a contender for transport on the rail service.
According to calculations by Green Markets’ Research Director Alexis Maxwell, the rail service could do a maximum of 120,000 mt of potash a year.
“Given that China bought 1.7 million mt of potash from Belarus in 2021, it would help a bit, but still leaves a big potash transport deficit,” she said.
According to the press document, as cited by the report, the two companies will interact on logistics support in Belarus, customs clearance services, and Belarusian-Chinese railway transportation, and facilitate the cooperation between the customs services of the two countries.
The agreement will help facilitate trade, promote export/import and transit traffic, attract new cargo flows, optimize customs operations, and improve the quality of the transport services, said Beltamozhservice’s First Deputy Director General Yelena Skripchik.