About the Bank Investor Information Research and Publications Media Centre
Projects Client Information EFSD Resources Management Contact Us
Main page> Projects> Projects implemented by EDB

Projects financed by the EDB

Developing the Talitsky Area of the Verkhnekamsk Potassium and Magnesium Salt Deposit in Perm Krai


Agrarians have proved that feeding crops, especially root vegetables, sunflowers and fruit trees, with potash fertilizer, helps increase their yield and improve the quality of products. Plants become more resistant to disease, are better able to withstand storage and transportation and their taste also improves.

Naturally occurring potash is the main source of this irreplaceable “vitamin of the fields”. Three countries — Canada, Russia and Belarus — account for over 80% of these natural reserves. In Russia, the largest potash and magnesium salt deposits are in Verkhnekamsk in Perm Krai. 

The Verkhnekamsk deposit is 140 km long (from north to south) and about 60 km wide. Around 286 million years ago this area was at the bottom of the Perm Sea. Then the land rose and the sea became a lake, which later dried up, and its sediments formed the deposit of potassium and magnesium salts that is being mined today.

The first salt works were built on the Usolka River in the middle of the 15th century. They produced a high-quality edible salt called permyanka. Commercial development of the deposit began in 1934. Salts which occur at a depth of 100 to 500 m are mined underground.

Acron Group is one of the companies developing the deposit. In 2008 the Verkhnekamsk Potash Company (VPC), a subsidiary of Acron Group, won a tender to develop the Talitsky area of the Verkhnekamsk deposit. Its area is 69.56 sq m and it has estimated sylvinite reserves of 681 million tonnes.

The Acron Group is a chemical holding, integrating manufacturers of mineral fertilizers and organic synthesis products. The holding comprises Acron (Veliky Novgorod), Dorogobuzh (Dorogobuzh, Smolensk Region) and Hongri Acron (Shandong Province, China). The Group also owns other production facilities at potassium and phosphate deposits, transport infrastructure and logistics and distribution companies. It produces over 40 chemical products and is one of the world’s largest producers of mineral fertilizers, primarily NPK compound and nitrogen fertilizers, as well as ammonia. Acron has substantial shares of the Russian nitrogen and phosphate fertilizer markets (14% and 11% respectively). It is also well established in major fertilizer markets such as China, Thailand, Brazil and the US.

The project to develop the Talitsky area involves the construction of a mining and processing plant which will produce 7.2 million tonnes of ore and 2 million tonnes of potassium chloride annually.

The overall investment in the project totals US $2 billion, not including the licence to develop the area, which was bought for around US $700 million.

Financing for the project includes equity and loans. In November 2012 the Acron Group invited Russian and international investors to participate in the project. Eurasian Development Bank (EDB), Vnesheconombank and Raiffeisen Bank jointly purchased shares in VPC, which is building the Talitsky mining and processing plant. The company’s charter capital was increased by RUB 16.4 billion (US $522.5 million), including RUB 12.8 billion (US $405.7 million) provided by the investors. EDB’s direct participation in VPC’s capital is about US $100 million.

Since the additional issue of VPC shares, investors in Acron Group’s charter capital are: Vnescheconombank (20% minus 1 share), EDB (9.10%), Raiffeisen Bank (8.95%) and the Acron Group (through Acronit — 61.95%).

The financing provided by the new investors allowed VPC to launch full-scale construction of the Talitsky plant in the fourth quarter of 2012. The funds will be used primarily for excavating the shaft.

The project will contribute to import substitution, de-monopolise the Russian potash fertilizer market, introduce advanced potash ore extraction and processing technologies and improve processing efficiency. The project will allow Acron Group to secure supplies of potassium chloride for fertilizer production at its own plants and to sell this raw material in the open market.

The Acron Group is a chemical holding, integrating manufacturers of mineral fertilizers and organic synthesis products. The holding comprises Acron (Veliky Novgorod), Dorogobuzh (Dorogobuzh, Smolensk Region) and Hongri Acron (Shandong Province, China). The Group also owns other production facilities at potassium and phosphate deposits, transport infrastructure and logistics and distribution companies. It produces over 40 chemical products and is one of the world’s largest producers of mineral fertilizers, primarily NPK compound and nitrogen fertilizers, as well as ammonia. Acron has substantial shares of the Russian nitrogen and phosphate fertilizer markets (14% and 11% respectively). It is also well established in major fertilizer markets such as China, Thailand, Brazil and the US.

“This is EDB’s first direct participation in the capital of an enterprise operating in the real economy,” says Dmitry Zhurba, Deputy Chairman of the EDB Management Board. “EDB chose to participate in this project because it will have a significant impact on Russia’s sustainable economic growth, the development of export-orientated production, the promotion of competition and the de-monopolisation of the potash fertilizer market. The project will also encourage innovation, employing the latest technology and equipment at the plant, ensuring efficient utilisation of the extracted resources. It will also have a social impact, creating many new jobs, developing production areas and increasing tax revenues for the relevant central budgets.”

EDB Member States

  • Russian Federation

    Russian
    Federation

  • Republic of Kazakhstan

    Republic
    of Kazakhstan

  • Republic of Armenia

    Republic
    of Armenia

  • Republic of Tajikistan

    Republic
    of Tajikistan

  • Republic of Belarus

    Republic
    of Belarus

  • Kyrgyz Republic

    Kyrgyz
    Republic