Uralkali, Moscow, plans to increase potash production capacity to 15 million mt/y by 2025 through new projects as well as expansion and modernization of existing capacity, Bloomberg reported, citing the potash company’s prospectus for its first Eurobond since 2013.
If Uralkali takes the decision to undertake the second stage of its Polovodovo greenfield mine and processing plant project by 2023, the company’s annual production capacity could increase to 17.8 million mt by 2030.
The producer provided updates on some of its major projects under development at the end of August, as part of its first-half 2019 financial results report (GM Aug. 30, p. 26). At the Polovodovo mine, the company reported preparatory measures required for shaft sinking were starting to be implemented. Polovodovo is expected to have a full design capacity of 2.8 million mt/y.
At the new Solikamsk-2 mine in Russia’s Perm region, the company reported it was proceeding with shaft design and shaft-sinking measures. Solikamsk-2 will have design capacity of 2.3 million mt/y of potassium chloride.
Uralkali back in early June said production should start at Solikamsk-2 in 2024 and at the Polovodovo complex in 2027 (GM June 7, p. 27).
At the end of August, the producer said work was underway on the ground-level complex construction at the new Ust-Yayva mine under construction, as well as the design for an underground operation (GM Aug. 30, p. 26). Ust-Yayva’s planned design capacity is 2.8 million mt/y of potassium chloride.
The company also said construction of the ground-level complex continues for the expansion of Solikamsk-3 (GM Aug. 30, p.26).
Uralkali’s plans for the ramp-up of production as new capacity comes on stream remain unclear, however. Back in late May, there were reports the company would delay big project ramp-ups (GM May 31, p. 27).
The producer last month announced plans to cut its potash output in the second half of this year on account of current market conditions and scheduled maintenance (GM Sept. 20, p.1). It said it expected to reduce total output by approximately 350,000-500,000 mt. The company saw a 3 percent year-on-year fall in its potash output in the first half of 2019, to 5.7 million mt, and an 8 percent decline in sales volume to 5.4 million mt of KCl.
The company said in its first-half 2019 financial results report, that despite the declining demand for potash in 2019 in some major regions, it is optimistic on potash industry fundamentals.
It said in the Eurobond prospectus that its total capital expenditure could reach about $3 billion in 2020-2025, which is in line with earlier capex estimates by the company (GM May 31, p. 27). Separately, Uralkali Senior Independent Director Paul Ostling, told investors the company’s capex would reach $550 million this year and may reach $670 million in 2020, according to an Interfax report.
The company is planning a roadshow for a reported five-year loan participation notes offering, subject to market conditions, according to a Bloomberg report, citing unidentified people familiar with the offerings.