OREANDA-NEWS. October 26, 2007. Belarusian Potash Company (BPC), Uralkali's joint venture with Belaruskali, through which Uralkali makes most of its potash exports, has informed Uralkali that it is temporarily suspending entry into new potash sale contracts. The decision has been made in light of news that Canada-based Potash Corp has made a similar decision to suspend new potash sales following concerns expressed by Silvinit about potash supply disruptions in the Perm region in Russia. Silvinit is a Russian potash producer. These decisions could have an upward impact on potash prices, including in those markets in which Uralkali's potash is sold. BPC's decision has not affected Uralkali's production plans and Uralkali is continuing to produce potash at planned levels and does not expect any material disruptions to its potash supplies. BPC has also informed Uralkali that it will continue to deliver under existing contracts.

Uralkali understands that Silivinit's concerns about supply disruptions relate to the recent increase in size of a localised depression from subsidence that followed the flooding at Uralkali's Mine 1 and the possible impact on the nearby railway line. The localised depression is near the Perm-Berezniki-Solikamsk federal railway line (near the main area of water inflow in Mine 1) which, Uralkali understands, Silvinit uses for its potash deliveries. An additional alternative 800 meters of railway track was built to bypass the relevant parcel of land affected by subsidence and Uralkali understands that it is currently in operation.

Uralkali is continuining to monitor market conditions, as well as developments relating to the flooding at its Mine 1.