Rumor test: there is no oligarch in Russia who would buy Belaruskali

Sergey Kron

Open Joint Stock Company "Belaruskali" is one of the main sources of foreign exchange earnings of the Belarusian state. According to Forbes magazine, potash exports in 2020 amounted to $2.4 billion. This is about 8% of the total volume of Belarusian exports, or about 4% of the country's GDP (60.3 billion dollars).

The new sanctions order to stop any cooperation with this company from April 1, 2022. This may threaten Belarus with a complete loss of the main export channel through Lithuania. The fact is that in 2020 Belarus produced about 12 million tons of potassium chloride, and exported 11 million tons of them through the Lithuanian port of Klaipeda. The Lithuanians could not fail to comply with the order from Washington and announced that they would stop the transit of Belarusian fertilizers in February. In the expert community, they again started talking about the "Russian brothers" who will always help Lukashenka in difficult times.

Answering a question from journalists, Russian presidential spokesman Dmitry Peskov refrained from answering the question of whether Russia was ready to take on the transportation of potassium from Belarus, but assured that "Russia will not abandon its partner".

But it's easy to promise. Russian carriers, apparently, are not ready to take risks by concluding contracts with Belaruskali and are not eager to work with sanctioned goods of Belaruskali in Russia. Although the option of reorienting the transshipment of Belarusian fertilizers from the Baltic states to the Russian ports of Minsk and Moscow has been discussed for more than a year. Even now, the terminals of Ultramar, Uralkali and Eurochem in the Baltic could receive at least 2 million tons of Belarusian potassium. In addition, the possibility of building Belaruskali's own facilities for export in the Leningrad Region was discussed, but in the end the company abandoned them.

In this situation, according to experts, Ukraine will remain the only option for Minsk after the closure of transit through Lithuania. But recent events related to the deterioration of relations between Russia and the West have shown that the two "fraternal peoples" of Ukraine and Belarus have lost their common language and are unlikely to start a joint business.

Analyst of the European Council on Foreign Relations Pavel Slyunkin believes that the transit of Belarusian fertilizers through Lithuania will continue.

“If we look at the termination of the contract and possible losses, then I do not think that in such a situation, when the Lithuanian Railway does not have a contract with Belaruskali, the flow of goods and potash fertilizers through Lithuania will stop. I think that they will conclude contracts with private Lithuanian carriers who will transit in the same way - maybe in smaller volumes, but I do not think that this will 100% block the possibilities for Belarusian potash fertilizers through Lithuania. The one-time termination of transit incurs serious costs for the country. I think that the Lithuanian government would like to minimize this damage or extend it over time in order to enable contractors to find an alternative to Belarusian goods,” Pavel Slyunkin believes.

According to the expert, if the transit of Belarusian potash fertilizers to Lithuania continues in a reduced volume, the Belarusian side will not face serious costs. However, if Belarus does not find workarounds, it will face maximum losses - in the amount of tens of millions of euros.

Be that as it may, the other day the Norwegian company Yara, the world's largest buyer of potash and a traditional partner of Belaruskali, set a foot on the Belarusians. Under pressure from the United States, she announced the curtailment of her business in the republic. And again in the West they started talking about the fact that Russia is supposedly aiming to buy Belaruskali. However, Moscow is not in a hurry to show its cards.

Canada announced the imposition of sanctions against Belarus, and the UK imposed restrictions against Belaruskali.

“These sanctions continue to target important sources of income for the Lukashenka regime and impose severe restrictions on those responsible for the most serious anti-democratic actions in the republic,” British Foreign Secretary Liz Truss said.

Sergey Zhavoronkov , Senior Research Fellow at the Institute for Economic Policy. E. Gaidar, told NI that the European sanctions would cause the greatest damage to Belaruskali, since the company supplies almost a third of all fertilizers to the EU countries. The loss is significant, but not fatal. Lukashenka is in a panic, but he is not going to sell anything. He repeatedly stated this and even said that he was offered a large bribe for the deal. His strategy: "I won't give it back!" After all, he has not privatized a single large state-owned enterprise. Although he considers them almost his personal property. The only exception is Beltransgaz, which he sold to Gazprom for $6 billion in debt. One thing remains - to cooperate even more closely with the Russian company Uralkali and through it to sell fertilizers to the same Europe. Fortunately, the Russians have a well-established deal with potassium, Uralkali is widely represented on the world market, has its own sea terminals and warehouses, and has its own transport. But it is necessary to negotiate, and this will require some time, - the expert believes.

Analyst Aleksey Malashenko commented to Novye Izvestia on the situation in connection with the introduction of new sanctions against Minsk:

- Western sanctions imposed, including against Beloruskali, should hurt the Belarusian economy. Russia will again have to compensate for the losses. Maybe even buy Beloruskali for purely political reasons. To some extent, Lukashenka is blackmailing Russia with this, while he, it seems to me, continues to look to the West. Yes, Europe is still squeamish about them, but they understand that they will still need Belarus. Alexander Grigoryevich expects that it will be possible to bargain with the EU to the last.

In any case, restrictions on the transit route and the negative political situation around a major market player will have an impact on the cost of potash and complex mineral fertilizers, the expert noted.

- We can only talk about the fact that some very large Russian corporation with access to credit resources could theoretically buy out Belaruskali, - Russian political scientist Andrey Suzdaltsev said in an interview with NI. – But Lukashenka is not going to sell this enterprise. Formally, Belaruskali is a state-owned enterprise owned by the Republic of Belarus. However, it is no secret that it belongs to Alexander Grigoryevich himself and his family. Naturally, he does not want to part with his personal material wealth.

According to the expert, this is not the first time someone has been deliberately spreading rumors that Moscow, using the difficult situation in which Minsk found itself after the events of August 2020, will start buying MAZ, BelAZ and other flagships of Belarusian production. And even in the information space, under pseudonyms or without a signature at all, materials appear that frighten the Belarusian layman with a kind of Russian oligarch who is ready to “swallow” the country's economy.

- There were no negotiations on the purchase of Belaruskali and there are none. Nobody needs the so-called "Belarusian flagships" today - they are outdated and in order to take them into balance, these enterprises need to be modernized. This is hardly possible under Lukashenko's regime.

In addition, the authors of various "stuffing" are counting on the reaction of the Belarusian political class - look, they say, Moscow is seizing Belarusian assets! Lukashenka's entourage, of course, is watching how the West reacts to this. It was not in vain that the Minister of Foreign Affairs of Belarus Vladimir Makei has repeatedly stated that the West is driving Belarusians into Russia with its “inaction”. In Minsk, they believe that Europe should be worried and rush to help Lukashenko. And there, you see, they will recognize him as president, they will ask for negotiations with him. This is exactly what Lukashenka is trying to achieve. Before us is an ordinary blackmail of Russia and the West, political scientist Andrey Suzdaltsev told NI.

Meanwhile, the world's largest producer of potash fertilizers, Canadian Nutrien, has announced that it is going to raise potash prices and increase its production in 2022 to 13.8 million tons, while Belarus has intractable problems with the supply of potassium due to sanctions abroad.