Belarus Leader Hints at Potash Truce – by Lukas I. Alpert (Wall Street Journal – September 19, 2013)

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Deal Would Involve Returning Executive to Russia for Prosecution

MOSCOW—The president of Belarus hinted for the first time Thursday at a possible resolution in a cross-border fight over potash that has rocked global fertilizer markets, by suggesting he is open to the idea of sending the jailed chief executive of potash miner Uralkali URALL -5.90% back to Russia for prosecution there.

President Alexander Lukashenko’s softened tone comes as people close to the Russian company’s primary owner, Suleiman Kerimov, say the billionaire is in talks with several parties to sell his stake in the company, something the Belarusian government has named as a precondition to any settlement following the collapse of Uralkali’s potash-trading partnership with Belarus.

“There are two options,” Mr. Lukashenko said. “First is a civilized divorce. We are ready for that. If you go, then go, but do not interfere with our work here. We are ready to work on our own.

“The second option would be to continue to work together. For that, the owners must change and new people come in who are interested in producing potash. We are ready to work with them,” the president said.

Uralkali Chief Executive Vladislav Baumgertner has been jailed in Belarus since Aug. 26, when he was arrested on charges of abuse of power following the Russian company’s departure from its trading venture with state-run Belaruskali. Belarusian authorities also issued a warrant for Mr. Kerimov’s arrest. Uralkali has dismissed the charges as politically motivated.

“If the Russian investigators are interested in the extradition of a Russian national we have arrested, I do not see any obstacles,” Mr. Lukashenko said, stressing that such a transfer could happen only if Russia deals with the case according to the law. The Belarus case claims the executive as chairman of the trading partnership unduly favored Uralkali.

Belarusian officials last week handed over a copy of their case file against Mr. Baumgertner to Russian authorities as the first step in possibly sending him back to Russia, where he could stand trial without being held in custody.

Uralkali’s decision in late July to leave its partnership with Belarus effectively ended an informal global pricing cartel, and Uralkali predicted prices for the fertilizer additive would fall by 25% by the end of the year. The move sent potash company stocks into a tailspin around the world and exposed deep fissures in the Belarusian economy, which relies on potash for more than 7% of its export revenue, meaning a 25% drop in prices could cost the impoverished country close to $1 billion a year.

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