The Federal Agency for Subsoil Use (Rosnedra) Amends Uralkali’s License for Development of the Ust-Yaivinsky Field

13.07.2009

Further to our press release dated December 12, 2008 — “Uralkali revises plans for the development of the Ust-Yaivinsky Field of the Verkhnekamskoye deposit” — the Federal Agency for Subsoil Use (Rosnedra) has signed an agreement to amend Uralkali’s license for the development of the Ust-Yaivinsky field. The amendment extends Uralkali’s deadline to May 15, 2011 for the preparation of the Ust-Yaivinsky mine construction design documentation and approval of the documentation by the relevant state authorities. The deadline for when the new mine should be put into operation remains unchanged — August 15, 2018.

In 2008, while preparing the feasibility study and the design documentation for the new mine construction it turned out that under the provisions of the Forest Code the land plot located in the protected forest area (‘the green zone’) could not be let for the development of mineral deposits. Given these circumstances as well as the global economy deterioration, on December 12, 2008, Uralkali’s Board of Directors decided to revise its approach to the development of the Ust-Yaivinsky field and prepare design documentation of its development by linking it to the company’s Mine 2, rather than through the creation of a new mine, Mine 5, as it was originally planned. Uralkali applied to the Federal Agency for Subsoil Use (Rosnedra), asking to amend the license agreement and extend the deadline for filing the relevant design documentation for one and a half years.

In March 2009 Russian President Dmitry Medvedev signed the federal law “Amendments to the Forest Code of Russian Federation and some legislative acts of Russian Federation”. As a result of these amendments, there emerged the possibility to obtain rights for the land plots in “the green zone” for the new mine construction.

The amendment comes after discussions over several months with Rosnedra, during which the company has been exploring possible ways to develop the Ust-Yaivinsky field. The new strategy to develop all the resources of the Ust-Yaivinsky Field through the company’s Mine 2 was not approved by the regulatory authorities because of the technical and environmental risks. Nevertheless, the collaboration has yielded a new plan for the development of the Ust-Yaivinsky field, which envisages the construction of a new mine with a capacity to be lower than it was projected originally but still higher than that under license requirements.


Vladislav Baumgertner, CEO, Uralkali:

“Our negotiations with the representatives of the state authorities were thorough. We have succeeded in reaching an agreement suitable to both parties involved: the subsoil user and the government. This has been a very constructive dialogue, all the more significant amidst the current economic situation. Uralkali is committed to fulfilling its obligations under the agreements in place”.

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Smoking in mines is prohibited.
Work at heights without wearing a safety harness is prohibited.
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