Belarus may revive potash cooperation with Uralkali

The Republic of Belarus said it might cooperate with Uralkali, the first sign the two sides might work together since the Russian potash producer broke off an alliance in 2013 and triggered a drop in global prices.

Belarus President Alexander Lukashenko's comments on Thursday sent shares of rival potash companies higher as previous co-operation between the world's two biggest miners of the crop nutrient helped manage supplies and underpin prices.

Potash Corp of Saskatchewan and Mosaic Co gained 6% in New York, while Germany's K&S AG added 5% in Frankfurt.

Uralkali is the world's biggest potash producer, while state-controlled Belaruskali ranks second.

"New Uralkali shareholders are coming to me every month saying: 'Accept us,'" Lukashenko said at an event in Minsk, Belarus' capital. "We are not against it. Let's unite, on our conditions.

"Let's resume work and agree how much we will produce."

Lukashenko did not disclose his conditions. The previous joint venture was based in Minsk, which was then a crucial condition for Belarus and the main concern for Uralkali.

Uralkali declined to comment. Its major shareholder, Uralchem, was not available for comment.

The collapse of Uralkali's joint venture with Belaruskali caused competition to intensify and drive down prices, which have not fully recovered.

Talk of cooperation among major players comes after Germany's K&S AG said this week it would carefully manage output of its new Canadian mine, Scotiabank analyst Ben Isaacson said.

"We think there could not be a better signal for investors to revive optimism," he said.

Lukashenko also said Minsk signed a potash supply contract with India on Wednesday. Belaruskali's Belarussian Potash Co trading arm later said, however, that it was still finalizing the deal, which it expects to sign this month.

"I think it's a wonderful contract, taking into account the current prices," Lukashenko said, without disclosing prices or volumes.

A major Indian customer, who requested anonymity, said both sides were close to signing the deal.

In 2015, Uralkali was the first major producer to sign a one-year contract with India to supply 800,000 tonnes of potash at $332 per tonne.

India and China, the world's biggest fertilizer consumers, usually sign contracts earlier in the year. This year, deals were delayed by high stocks held by farmers.

India's deal would be a rare instance of that country signing a potash supply contract with a major producer before China.

Reporting by Andrei Makhovsky in Minsk, Rajendra Jadhav in Mumbai and Polina Devitt in Moscow; additional reporting by Rod Nickel in Winnipeg; Writing by Polina Devitt; Editing by Mark Potter and Lisa Von Ahn.