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Russian Fertilizer Maker Acron in Talks over Investments for a $1.6 Billion Potash Project

The Russian fertilizer producer Acron JSC is negotiating the joint development of a $1.6 billion potash project with investors from India, China and Arab countries. The company’s CEO Alexander Popov commented that Acron was “waiting for a binding proposal from the Indian investors, but they don’t have exclusive rights”. He added that “that’s why we are in talks with Chinese and Arab investors,” suggesting that Acron might be able to develop the project on its own as the Russian currency’s depreciation against the dollar in the past year has helped decrease development costs.

The Russian fertilizer manufacturer focuses on nitrogen-based fertilizers and phosphates and it beats the world’s largest potash producer, Uralkali PJSC in the auction over the Talitsky potash site in Russia’s Perm region in 2008. Acron has since cooperated with Vnesheconombank, Eurasian Development Bank and Sberbank Investments Ltd., Acron’s main partners, and now holds more than 50 percent share of Talitsky. Mr Popov admitted that the company is considering buying out those investors later. Acron started negotiating about the potential sale of 30 percent in the project to Indian investors already in November 2014.

Acron is about to accelerate the development next year as soon as other investments are done. The capacity of Talitsky will be 2 million metric tons of potash annually with the possibility of expanding to about 2.6 million tons. It could start operations in 2021 or 2022. Mr Popov said that “Russia is in a unique situation now – such a project can be done with help of the moderate financing,” pointing out to the ruble’s weakening which lowered the costs of the project by 30 percent. About 20 percent of that amount is denominated in foreign currencies. Acron also confirmed that they were in talks over about $1 billion in project financing with Sberbank PJSC and also some international lenders.

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