Page 38 - bneMag April 2022 Russia living with sanctions

38 I Eastern Europe bne April 2022
Potassium mining. Belarus, Soligorsk.
What now for Belarusian potash?
bne IntelliNews
In 2021, as well as the last month, the Belarusian potash industry has taken some heavy blows. Last year, the EU and the US imposed heavy sanctions on Belarusian potash exports, with the EU banning several of the product codes for Belarusian potash being exported to EU countries. The
US for its part completely banned trade with several major Belarusian potash companies.
Lithuania was in the forefront of the sanctions implementation, as most of Belarus’ potash exports went through its port of Klaipeda; it is also one of
the Belarusian regime’s strongest political opponents on the international arena. However, there was no easy
way for Lithuanian railways to stop
the transit of Belarusian potash and adhere to the US sanctions, since it had already signed a contract stretching until 2023 with Belarusian potash giant Belaruskali. The Lithuanian government solved this by breaking the contract, citing national security
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concerns while also declining attempts from other Belarusian companies to sign a new one.
On Tuesday, 15 February reports came in about Ukraine banning the transit of Belarusian potash through its ports and the sale of it to Ukraine’s very large agricultural sector. However, it’s worth noting that the Ukrainian trade restrictions for Belarusian potash only apply to products sold
by Belaruskali or Belarusian Potash Company. By the wording of the restrictions, it therefore seems as
if these companies could solve this problem by establishing subsidiaries who could get access to the Ukrainian market and its ports. Nevertheless,
it severely complicates things for Belarus’ potash industry, one of the country’s most important income sources of foreign currency.
The Russian direction
It has long been speculated that Putin has been plotting to take over
Belaruskali together with Russian oligarch Dmitry Mazepin. Now Belaruskali has become increasingly pressed since being cut off from its shipping routes to both the west and the east, making it hard for it to reach main export destinations such as Morocco and India.
Instead, Belaruskali’s only option seems to be trade through Russian ports. However, neither these ports nor the transport routes from Belarus’ to them have the capacity to handle Belarus’ large quantities of potash. Besides, these are already full of Russian export products. If Belaruskali wants a piece of the cake
it will have to invest enormous amounts into developing Russian port capacities or strike some kind of deal with the Russian companies, which makes Belaruskali vulnerable to Russian business interests.
However, the head of the Uralhim Group, Dmitry Koniayev, told Reuters on Wednesday that “We are not considering the development of potash assets outside