Mineral and Chemical Company EuroChem

EuroChem estimates it ranks among the top five fertilizer companies in the world by potash reserves.

Our strategy in potash:

Our strategy is to start potash production in 2014, ramping up an annual capacity of 2.3 MMT p.a. after completing the first phase of development of the Gremyachinskoe deposit.

Through a brownfield expansion of the Gremyachinskoe deposit we plan to double capacity to 4.6 MMT p.a., then we plan to add an additional 1.7 and 1.4 MMT p.a. of capacity at through two phases of development of the Verkhnekamskoe deposit, for a total planned annual capacity of 7.7 MMT p.a.

Our Potash Projects:

Gremyachinskoe potash deposit:

Phase I: capacity of 2.3 mmt p.a., involves construction of social infrastructure, cage shaft, skip shafts and processing facility
Phase II: capacity doubled to 4.6 mmt p.a., involves construction of additional skip shaft and expansion of processing facility
Mining to start in 2014; Phase I full capacity in 2015; Phase II full capacity to be reached in 2018
Total investment for both phases est. US$ 3.4bn
Russian classification reserves (B+C1+C2): 1,613 mmt; off-balance reserves (C1+C2): 0,074 mmt
JORC proven and probable reserves: 492 mmt; measured and indicated resources: 1,337 mmt
more information….

Verkhnekamskoe potash deposit:

Phase I: capacity of 2.0 mmt p.a., involves construction of social infrastructure, cage shaft, skip shafts and processing facility
Phase II: additional capacity of 1.4 mmt p.a., involves construction of additional skip shaft and expansion of processing facility
Mining to start in 2016; Phase I full capacity in 2018; Phase II full capacity in 2021
Total investment for both phases est. US$ 2.7bn
Russian reserves (A+B+C1): 1,524 mmt;
JORC proven and probable reserves: 420 mmt; measured and indicated resources: 1,075 mmt
more information….

SWOT Analysis:

Strengths	Weaknesses
Vast reserves (est. 3.2bn tonnes*): number 5 globally Close location of Gremyachinskoe deposit to Black Sea ports High nutrient content in reserves in Gremyachinskoe deposit (average 39.5% KCl) Both deposits – Gremyachinskoe and Verkhnekamskoe – are located in areas with existing infrastructure Preliminary calculations place EuroChem among leaders on cash cost delivered to key markets curve Own transhipment terminal	Limited in-house experience in mining may lead to higher costs due need to engage subcontractors for planning and construction of mines and processing facilities
Opportunities	Threats
Become one of the leading players in potash, with up to 7.7 MM T p.a. production capacity Co-operate with established potash players in potash projects in Russia and abroad Use advanced technology for shaft sinking and enrichment, resulting in lower cash cost per tonne of production	A significant reduction in EuroChem’s operating cash flows due to a sustained period of low fertilizer prices Large number of announced greenfield and brownfield capacity expansions could increase competition on the supply side in long term and result in lower margins available to EuroChem

* A+B+C1 according to Russian reserves classification

EuroChem