EuroChem Group AG is not going to be able to start commercial potash production next year at its VolgaKaliy operation in Russia’s southern Volgograd region, according to an Interfax report this week, citing Igor Nechaev, Head of the group’s Russian subsidiary JSC MCC EuroChem. He was speaking on the sidelines of the Russia Calling! investment forum held on Nov. 20-22 and organized by VTB Capital.
The fertilizer group first confirmed in June that it was delaying commercial production at VolgaKaliy because it had come across “geological problems” (GM June 14, p. 1). Reporting its first-half 2019 financial results in early August, it elaborated further on the slower-than-planned underground development due to the difficulties with geology, reporting that water inflow into the cage shaft was continuing (GM Aug. 9, p. 29). At that time, the group said it was trying to eliminate the water inflow and planned to drill additional freezing holes.
However, EuroChem had emphasized that the two existing shafts and processing plant design capacities remained unchanged from the previously reported approximately 10-12 million mt/y of ore, to make a total of 2.3 million mt/y of finished product, respectively.
VolgaKaliy produced just 35,000 mt of ore in the first six months of this year, equating to some 12,000 mt of finished product. The first test concentrate was produced at the site in July 2018, and as late as 12 months ago, EuroChem had been targeting first commercial production during the first half of 2019 (GM Nov. 30, 2018).
But operations are going well at the group’s Usolskiy potash operation south of Berezniki. Nechaev confirmed that production at Usolskiy was on target to reach 1 million mt this year, and that the site’s initially-envisioned design capacity of 2.3 million mt/y for phase 1 of the project would be reached by 2021.
EuroChem revealed in early August that it expected to achieve 2.9 million mt/y of potassium chloride production at Usolskiy in the next two years through some minor equipment upgrades.
Usolskiy produced 467,000 mt of potassium chloride in the first half of this year. External sales of potash amounted to 389,000 mt, compared to 136,000 mt sold in the same prior-year period.