Sberbank of Russia will take part in a project to mine a potash deposit in Belarus, as the financial institution confirmed Tuesday the refinancing of the $1 billion loan issued to the Belarusian company Belaruskali, responsible for one-third of the world’s production of the fertilizer.
The bank’s chairman, German Gref, released the information after meeting President of Belarus Alexander Lukashenko, reports the Belarusian Telegraph Agency.
Cash-strapped ex-Soviet republic Belarus tried selling Belaruskali, its most prized asset, under the terms of a $3 billion bail-out loan with Russia in June last year.
It was later said the company would merge with Uralkali, Russia's largest potash miner, which was revealed to be only a rumour.
Belaruskali could have been worth as much as $20 billion and a merger with Uralkali owned by billionaire Suleiman Kerimov would have created a group with annual production of 21m tonnes, dwarfing current number one Canada’s Potash Corp's 12 million tonnes.
In December last year Belaruskali received a one-year $1 billion syndicated loan from the Russian bank and the Eurasian Development Bank. Earlier Belaruskali’s management said they were planning on prematurely repaying it in one go on Sep. 20, which didn’t happen.
Belaruskali accounts for about 15% of the global potash fertilizers output and more than 16% of the worldwide export of potassium. The company, with headquarters in the city of Soligorsk south of the capital Minsk, operates four mines and refinery complexes and employs about 20,000 people.
Image of Belaruskali surface facilities courtesy of the company.