Russian firm 'to buy $15-bln Belarus potash stake': report

9th June 2011, Comments 0 comments

A Russian firm has talked with Belarus President Alexander Lukashenko about buying a controlling stake in the state-owned potash producer as Minsk struggles with an economic crisis, a report said on Thursday.

The Nafta Moskva firm of Russian magnate Suleyman Kerimov is seeking to buy a stake of 50 percent plus one share in Belaruskali for $15 billion, the Vedomosti business daily said.

Kerimov had met Lukashenko on Wednesday and agreed the terms of the deal although it remained unclear if the transaction would be agreed owing to the murky political situation in Belarus, Vedomosti quoted sources as saying.

If agreed, the deal would create a global potash player to rival Potash Corp. of Canada. Kerimov already co-owns Russia's Uralkali which last year bought its domestic rival Silvinit to create a global Russian potash giant.

Belarus is battling an unprecedented economic crisis as its hard currency reserves run out and inflation soars, prompting consumers to hoard basic produce and besiege exchange points in search of dollars.

Economists blame the crisis on Belarus current account deficit, one of the widest in the world, which expanded owing to energy price rises by Russia and the loose economic policies of the Lukashenko government.

Belaruskali is indisputably the biggest economic asset in Belarus. A sale of a controlling stake would bring in a financial lifeline for the government. Past reports have also spoken of a Chinese interest in the firm.

The importance of potash fertiliser has soared in recent years owing to mounting demand for food in the world, particularly China.

© 2011 AFP

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