MOSCOW May 12 Russian potash miner Uralkali's
(URKA.MM) ability to compete on global markets would be
seriously affected by an export tariff, company president Denis
Morozov told Moscow's Kommersant daily.
"All in all, introducing a tariff, would, of course, be a
serious blow to our competitiveness on the global market, and it
will have negative reverberations not only on the attractiveness
of investing in our sector, but in the country as a whole," the
executive said in an interview that appeared in Wednesday's
Russia's anti-monopoly agency (FAS) said last month it would
support proposals to impose an 8.5 percent export duty on potash
as a result of rising pricing on the domestic market.
However, the head of the FAS added that a final decision
would be taken by a commission of first deputy prime minister
Morozov also rejected the suggestion that the tariff would
boost domestic sales since they account for only 5-6 percent of
total production by Uralkali and its rivals.
"Therefore, if talking about a potash deficit in Russia is
not laughable, then, it is at least unsound -- Russian potash
producers fully meet domestic demand."
Morozov also said that Uralkali is proceeding with plans to
achieve annual capacity of 7 million tonnes by 2012.
The company last year cut output to 2.6 million tonnes from
4.8 million tonnes in 2008, but expects demand to improve this
"In other words, the company is prepared for the moment when
demand revives and it becomes necessary to increase production
volumes," the executive said.
In the first quarter, Uralkali was operating at 86 percent
capacity, Morozov added.
(Reporting by Alfred Kueppers; Editing by Lidia Kelly)