EuroChem (the "Company"), Russia's largest fertiliser company and a top ten fertiliser company globally, today announces that it has won the auction for the right to explore and produce potash from the Belopashinsky potash licence area located in the Verkhnekamskoe deposit in the Perm region, Russia.
The licence area for the deposit covers 65 sq.km and is adjacent to the Palashersky licence area, where the Company's EuroChem-Usolskiy Potash subsidiary is currently developing its mine.
This new licence brings EuroChem-Usolskiy Potash's total licence area to 188 sq.km. These two licence areas are estimated to have proven and probable reserves of approximately 2.5 bn tonnes of ore, giving a useful mine life of as much as 60 years with an annual production of 15 million tonnes (MMT) of ore (3.7 MMT KCl).
The average potash content at the deposit is estimated to be 30.8% and the mine recovery rate is expected to be approximately 85%.
EuroChem will make one-time payment for the use of the Belopashinsky potash licence area amounting to RUB 885 mn.
Clark Bailey, Mining Director at EuroChem commented: "We are delighted to win the licence for another potash deposit. Its close proximity to our EuroChem-Usolskiy Potash development will allow us to significantly expand our high quality resource base. The construction of our two potash projects and the development of this deposit fall within the Company's plans to create our potash business, a key part of EuroChem's growth strategy to become one of the world's top-ﬁve fertiliser companies."
EuroChem is currently developing Phase I of its EuroChem-Usolskiy Potash mine. With a capacity of 2.3 MMT of KCl per annum, production is set to begin at the end of 2017. The capacity of EuroChem-Usolskiy Potash will be increased to 3.7 MMT per annum following the completion of Phase II.
EuroChem is developing a second greenfield potash project further to the East in Kotelnikovo, Volgograd region, Russia. The Phase I of EuroChem-VolgaKaliy is scheduled to be completed at the end of 2017. From an initial production capacity of 2.3 MMT of KCI per annum, the capacity is set to double to 4.6 MMT per annum after the ramp-up of the project's Phase II.