February 12, 2009 / 5:54 PM / 8 years ago

Uralkali to pay $72 mln for mine collapse damage

2 Min Read

MOSCOW, Feb 12 (Reuters) - Russian potash miner Uralkali (URKA.MM) agreed to pay 2.5 billion roubles ($71.8 million) in compensation to the Russian region where a potash mine collapsed in 2006, the company said on Thursday.

The level of compensation for the collapse, which created a giant sinkhole and caused the relocation of some residents of a nearby town, had been determined in a meeting at Natural Resources Ministry, the company said.

Uralkali is expected to sign an agreement on the terms of the payment with the Russian Finance Ministry and the administration of Perm region, where the mine is located.

In December 2008 Uralkali President Anatoly Lebedev offered compensation for the costs incurred at all levels of government as a result of the accident, including the railway monopoly's construction of bypass rail routes around the sinkhole.

Uralkali's preliminary estimate was around 3 billion roubles.

Uralkali said in November its future could be at risk if the government charged it for all damages to the state and third parties.

Analysts have said the company could bear the cost of compensation for the railway, resettlement of the town and damage to power utilities. A worst case scenario was a fine for all lost potash ore, analysts have said. (Reporting by Melissa Akin and Robin Paxton; Editing by David Holmes)

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