Potash project update
Moscow, 29 December, 2011, EuroChem today provides the following development update for its Gremyachinskoe and Verkhnekamskoe potash projects.
Gremyachinskoe deposit (Volgograd)
Sinking operations at the skip shaft #1 are continuing as planned and reached a depth of 400 meters. The sinking of the 1,147 meter deep shaft is being performed by the EuroChem-VolgaKaliy team using a traditional freezing methodology and is to be completed within the next twelve months.
As previously announced, the difficult subsoil conditions encountered from the second quarter of the year considerably slowed down the sinking rate of the cage shaft. Given the delays encountered, EuroChem has requested that the contractor suspend the cementation process. Currently at a depth of 100 meters, the cage shaft is being prepared for a switch to freezing technology, following which sinking operations are to resume in the second quarter of 2013. As a result of this delay, the completion of the first phase of the Gremyachinskoe project has been revised by 9 months with an initial production of approximately 150 thousand tonnes of potash projected for 2014.
Following our third quarter results announcement, the decision was taken to bring forward the start of the sinking operations for the skip shaft #2. As a result, we now expect to complete phase 2 and reach full extraction capacity 12 months ahead of our initial schedule. Despite the delays encountered in phase 1 and the acceleration of phase 2, we do not anticipate any material changes to total planned capital expenditures.
Verkhnekamskoe deposit (Perm)
Cage shaft sinking operations at the Verkhnekamskoe deposit commenced on December 15 and are now at a depth of 50 meters. In parallel, EuroChem-Usolsky potash complex, the EuroChem subsidiary developing the deposit, is currently completing ground freezing operations around skip shaft #1 and expects to start active shaft sinking in the second quarter of 2012.