China expands stake in Russian potash miner Uralkali
China is expanding its influence over the potash industry with Industrial Commercial Bank of China (ICBC) and China Construction Bank acting as lenders of a $530 million loan deal Russian potash miner Uralkali, the world's biggest producer of the commodity, signed Monday.
The news comes less than a month after Belarusian Potash Company (BPC), Uralkali former partner, finished setting supply prices with Beijing, which came below the target sought by both the embattled Russian miner and the North American Canpotex consortium.
ING Bank, Societe Generale, Nordea Bank, Commerzbank, IKB and Natixis also took part in yesterday’s deal as lenders.
This is not the first time Chinese institutions approach Uralkali. In 2013, China’s sovereign-wealth fund (CIC) grabbed a 12.5% stake in Russian potash producer Uralkali, the world's biggest producer of the commodity, by exercising an option on a convertible bond it acquired earlier.
Since last year CIC has been shifting its focus to invest in agriculture and global food supplies, which reflects the priorities of the country’s current leadership.
When established in 2007, the fund focused on taking stakes in U.S. financial institutions such as Blackstone, the private equity fund, and Morgan Stanley. But facing losses on those investments in the wake of the financial crisis, CIC adjusted its strategy to concentrate on energy, metals, mining and other commodities needed to fuel China’s growth.