OREANDA-NEWS. February 11, 2010. Silvinit has complied with an FAS ruling and has eliminated its own trading company from the potash supply chain to domestic consumers. Prices under the supply agreements have been left unchanged at RUB 4746 per ton. We may conclude, therefore, that potash prices for the domestic market have been successfully increased by 20% compared to the previous year.

On February 10, Silvinit reported that it had met the requirements stipulated by the Federal Antimonopoly Service on 21 December 2009 and had entered into direct contracts for potash supplies with key domestic consumers: PhosAgro, EuroChem, Minudobreniya Rossosh and Minudobreniya Meleuz.

Earlier, contractual relations between Silvinit and domestic potash consumers went through Silvinit’s trading company, Mineral Trade. The Antimonopoly Service ruled that a RUB 200 per ton service markup made potash prices for domestic consumers unjustifiably overstated and recommended that Silvinit eliminate the intermediary from the supply chain and sign direct contracts with potash consumers. Silvinit decided to comply with the ruling. According to company management, prices under the new supply contracts have been left unchanged at RUB 4746 per ton. We may conclude, therefore, that a scheduled 20% increase in domestic potash prices has successfully gone through. The surge in sales prices should yield Silvinit at additional RAS revenue of RUB 161 million, or RUB 200, on each of the contracted 803,000 tons, which should definitely be to the benefit of the company’s minority shareholders.