Russia: The Uralkali and Silvinit Merger Has Been Completed

The merging of OJSC Uralkali and OJSC Silvinit has been completed and was approved by competition authorities in Russia, Ukraine, China, Brazil and Poland. Uralkali had a capacity of some 5.5 million tonnes KCl and Silvinit 5.1 million, both having their operations in the Perm region  of central Russia. Uralkali is nowadays performing a 27% capacity expansion to 7 million tonnes KCl and expects to complete the project in 2012. Also Silvinit plans to increase its capacity to 5.6 million tonnes KCl already in the current year, and to 6 million in 2012. Silvinit has also a greenfield project at their Polovodovsky site. Uralkali had agreed to acquire Silvinit for $7.8 billion in cash and shares last December. The combined entity will have capacity to mine more potash than Potash Corp. of Saskatchewan, currently the world’s biggest producer. Uralkali aims to increase the production capacity of existing operations from 10.6 million to 13 million tonnes in 2012 and the combination is expected to lead to significant synergies, including, among other things, operational, SG&A and transportation efficiencies and integrated development of the asset base.

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