A new shape of the potassium market?
Flooding of Uralkali mine, a Russian potassium excavation tycoon, could help its main competitor, the Canadian PotashCorp, take over much of the market. Will the balance of power in the sector shift to the American continent?
A difficult November
Uralkali is a Russian company and one of the world leaders in the production of potassium chloride, which is necessary for the production of fertilizers containing potash. The deposits owned by Uralkali constitute 3% of the global resources of the mineral. Each year circa 13 million tonnes of the resource are excavated, and the plan is to increase production to 19.5 million tonnes.
Unfortunately, on November 18th, 2014, a leak of brine to Solikamsk-2 mine was discovered. The leak caused 700 m3 of the liquid break into the mine each hour. The operation of the facility was suspended. At present work is under way, mainly to secure the neighboring Solikamsk-1 mine from a similar fate.
Who will benefit?
PotashCorp, the competitor from across the Ocean, is the most likely to benefit from the situation. According to estimates by experts, following the suspension of the excavation of potassium chloride in Solikamsk-2, the Canadian company may sell one tonne of the resource more each year. Also, seeing that PotashCorp is intending to step up the pace of excavation of own deposits, the company may climb the list the leading potassium providers. PotashCorp currently excavates 12.4 million tonnes of the resource annually, and is going to increase this production level by 2.4 million tonnes. Such a result would put the Canadians at the top of the international ranking of potassium excavation.