Uralkali Potash mine (Financial Post)

Uralkali Potash mine (Financial Post)

Developments in the potash cartel saga continues as rumours are confirmed that 21.75%-owner of OAO Uralkali, Russian tycoon, Suleiman Kerimov is trying to sell his stake in the company.  The value of the sale is estimated at around $3.5 billion.  This comes after Uralkali left the Belarusian Potash Co (BPC) cartel followed by the Belarusian’s arresting Uralkali CEO, Vladislav Baumgertner on charges of abuse of office.  The Belarusian’s are currently attempting to arrest four other Uralkali officials including Kerimov.  An appeal for Baumgertner’s release was turned down on Friday of last week.  Putin and his oligarch allies (including Igor Sechin - CEO of Russia's state-owned oil company, Rosneft) have restricted oil exports to Belarusian refineries by 25% in response to these arrests and allegations.

Suleiman Kerimov (Reuters)

Uralkali's 21.75%-owner, Suleiman Kerimov (Reuters)

There is much speculation as to which Putin ally and fellow Oligarch would be buying his stake.  The most likely candidate is Putin’s ‘personal-banker’ Vladimir Kogan who is a close ally of President Putin.  Rosneft is said to be in the running, although CEO Igor Sechin said Rosneft is not interested in potash at this time.  Some aren’t as optimistic that the departure of Kerimov as principal owner will reconcile the BPC and its 40% of the global potash exports.

Here’s the Bloomberg article: Kerimov Sellout from Uralkali Seen Failing to Boost Potash Price

“There is no reason for this optimism,” VTB Capital’s Elena Sakhnova said by phone today. “Even if Kerimov sells, it will take time for a new owner to agree on terms of cooperation with Belarus. Even assuming the cartel will be back, it won’t help the market to recover quickly.”

Other potential buyers include OAO Russneft owner Mikhail Gutseriev, Vladimir Evtushenkov and Arkady Rotenberg.  Uralkali is recovering some of the 20% in market value they lost as a result of dismantling the BPC.  Today, shares traded up as much a 7.3% in Moscow.