EU targets potash players in renewed sanctions on Belarus

LONDON (ICIS)–The EU has taken aim at muriate of potash (MOP) fertilizer, one of Belarus’ key export products, as it prepares to slap a fourth round of sanctions on the country and President Alexander Lukashenko.

The EU Council announced late on Monday sanctions against 78 individuals and eight entities, including a ban on travel to the EU, and the freezing of assets.

“These sanctions … send a further strong signal to the backers of the regime, that their continued support for Alexander Lukashenko comes at a substantial cost,” the Council said.

Included in the list is entrepreneur Mikhail Gutseriev, owner of companies Safmar, Slavkali, and Slavneft.

Slavkali is lead on the development of Belarus’ Nezhinsky MOP mine, which is also being supported by 10 Belarusian firms.

“Gutseriev owns the Slavkali company, which is building Nezhinsky potassium chloride mining and processing plant based on the Starobinsky potash salt deposit near Lyuban. It is the largest investment in Belarus, worth $2bn,” said the EU Council.

Gutseriev was described by the EU as “a long-time friend” of Belarus’ President, a relationship thanks to which the businessman would have “accumulated significant wealth and influence” among the political elite.

The press release does not explicitly state sanctions will be placed on exports of MOP from Belarus, but there is expectation such restrictions will be imposed later this week when EU heads of state and government gather.

Belaruskali, the nation’s MOP mining major, and marketing arm Belarus Potash Company (BPC) had not responded to a request for comment at the time of writing.

The sanctions follow the late-May ,contentious diversion of a passenger plane in Belarusian airspace and the removal of activist and journalist Roman Protasevich from the Ryanair flight.

On Monday, the US, Canada, and the UK issued a joint statement also hinting at potential sanctions on the Belarusian regime.

“We are committed to support the long-suppressed democratic aspirations of the people of Belarus and we stand together to impose costs on the regime for its blatant disregard of international commitments,” the three countries said.

POTASH MARKET MOVES 
News of the impending sanctions follows an announcement from Canadian fertilizer major Nutrien that it will push a second half-million tonne increase in potash production for 2021.

On 7 June, Nutrien announced an initial 500,000 tonne increase, which would bring total production to 1m tonnes, with the company’s total 2021 potash sales guidance expected at 13.3-13.8m tonnes.

Most of the extra production is expected during Q4.

The threat of sanctions on Belarusian potash – the second-largest supplier of the vital crop nutrient in the world after Canada – has spurred panic-buying in some markets.

Last week, sales into southeast Asia and Brazil pushed spot granular MOP fertilizer prices to new highs.

Front page picture: Belarus’ President Alexander Lukashenko (centre) and entrepeuner Mikhail Gutseriev (right) at a church event in 2020
Picture source: Andrei Stasevich/BELTA POOL/POOL/EPA-EFE/Shutterstock

Focus article by Andy Hemphill

Additional reporting by Annalise Porter