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Uralkali signs a Memorandum on a Tripartite Special Investment Contract with the Ministry of Industry and Trade of the Russian Federation and the Perm Territory

05.06.2017

Uralkali (the Company; MICEX: URKA), one of the worlds largest potash producers, announces the signing of a memorandum of understanding on the conclusion of a special investment contract (SIC) between the Ministry of Industry and Trade of the Russian Federation, the Perm Territory and Uralkali in order to stimulate investment activities in the domestic industry. The event took place within the working visit to the Perm Territory by Mikhail Babich  Presidential Plenipotentiary Envoy in the Volga Federal District and Denis Manturov  Minister of Industry and Trade of the Russian Federation.

As a part of the special investment contract, Uralkali is implementing a large-scale investment project in the Perm Territory to create new industrial production facilities, consisted in the construction of the Ust-Yayva mine with a capacity of 11 million tonnes of sylvinite ore per year and a new technological section at the processing plant, bringing the plants production capacity to 2.8 million tonnes of potassium chloride per year.

In return, the Ministry of Industry and Trade of the Russian Federation and the Perm Territory have confirmed their readiness to include in the special investment contract the obligations of the Russian Federation and the Perm Territory to grant the Company tax privileges established by the relevant regulatory documents and to maintain tax privileges and preferences for Uralkali established by law during the entire effective period of the special investment contract.

Denis Manturov, Minister of Industry and Trade of the Russian Federation, commented:

Uralkali implements a potash capacity expansion programme in the Perm Territory. Within this program the capacity of one of the industrial objects will be increased up to 2.8 million tonnes of potash per year. Todays signing is another step on the way of carrying out a long-term industrial policy, building a systematic approach targeted at maximising the production and social potential of the territories. In addition, this 500+ new jobs programme will increase the employment level of the population of the Perm Territory and spur up the creation of new jobs. We appreciate the cooperation with the regional administration and one of the regions largest industrial enterprises.

Maxim Reshetnikov, the Head of Perm Territory, commented:

The special investment contract is an example of the benefits in exchange for investment approach, which is beneficial for everyone as the region has new jobs, while the investor receives significant tax preferences. The Perm Territory was the first Russian region to incorporate a SIC and now we are working on it and intending to advance. The way is simple, but reliable and guarantees the result. Thanks to the special investment contract with Uralkali to be concluded in the near future, over 500 new jobs will be created, together with higher tax contributions to the regional budget and all these issues are very important for us.

Dmitry Osipov, Uralkali CEO, commented:

The signing of the memorandum not merely establishes a new standard of relationships between the Perm Territory and Uralkali, but also creates the conditions for successful long-term development of the Company. This includes the creation of new jobs, social protection for the population of the region and, as a result, higher tax contributions to budgets of all levels against the commissioning of efficient production facilities and industry development in the Perm Territory.

Uralkali (www.uralkali.com) is one of the worlds largest potash producers and exporters. The Companys assets consist of 5 mines and 7 ore-treatment mills situated in the towns of Berezniki and Solikamsk (Perm Territory, Russia). Uralkali employs ca.11,000 people (in the main production unit). Uralkalis shares are traded on the Moscow Exchange.

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