Belarusian government representatives have joined the management of a new company understood to be the successor to Slavkaliy Co., the Russian-backed company that was developing the Nezhinsky potash mining and processing project at the Starobinsky potassium salt deposit in eastern Belarus.
According to an Interfax report, citing data from Belarus’ Unified State Registry of Legal Entities, the new company was registered at the end of November under the name of OJSC Nedra Nezhin in the Lyuban district of the country’s Minsk region, where the Nezhinsky GOK project is located. Nedra Nezhin’s core business is listed as mining raw materials for chemical and fertilizer production,
Citing an unnamed industry source, the new company is the successor to Slavkaliy Co.
Slavkaliy’s founder, Russian billionaire Mikhail Gutseriev, was added to both European Union (EU) and US sanctions’ list last year (GM Aug. 13, 2021; June 25, 2021).
According to the report, no information has been disclosed publicly about Nezhinsky GOK being transferred from Slavkaliy Co., but it is understood that Gutseriev transferred control of at least 75% of the shares of the GCM Global Energy company, which wholly owns Slavkaliy, to his younger brother, Salman Gutseriev, a Kazakh citizen, in July 2022.
Under Belarusian corporate governance practices, the government appoints its representatives to major companies in which it holds a controlling stake, according to Interfax.
The report provided no update on the current status of the Nezhinsky potash project, but has been presumed to be halted since its owner and the Belarus potash industry, as well as key banks and financial institutions, among other sectors of the Belarusian economy, came under EU and US sanctions in 2021.
Nezhinsky GOK produced its first ton of rock salt in April 2020, and at the time, construction and commissioning of the processing plant were targeted for the fourth quarter of 2023, when exports of potassium chloride also were targeted to begin (GM April 24, 2020).
Some 2 million mt/y of potassium chloride capacity was planned at Nezhinsky, with plans for the production of both white and pink potash, as well as granular grades.
The $2 billion plus estimated cost of Nezhinsky was being financed through $600 million of Slavkaliy’s own funds and a $1.4 billion loan from China’s state-owned China Development Bank, raised through Belarusbank (GM June 24, 2016). Belarusbank came under EU sanction, and the China Development Bank (CDB) was reported to have frozen the loan funds in the summer of 2021 (GM Sept. 3, 2021).
Nezhinsky GOK, when operational, would be Belarus’ second producer of potash, which is currently only produced by OJSC Belaruskali. However, Gutseriev repeatedly said that Slavkaliy would pursue a pricing policy “agreed with Belarusian Potash Co. (BPC)” for potassium chloride exports from Nezhinsky, and that “there will not be any competition, only symmetry” (GM July 12, 2019).