China conditionally approves the merger of Russia's two giant potash giants

The Ministry of Commerce issued the announcement No. 33 of 2011 on the 2nd and conditionally approved the approval of the Russian potash producer Ural Open Stock Company (Ukrainian Pottery) to merge with the open company of Shervinit (Xie potassium).

According to the announcement, the Ministry of Commerce believes that the concentration of Ukrainian-Kilor absorption and the concentration of thank-you operators may have the effect of eliminating or restricting competition in China's potassium chloride market. In order to reduce the adverse impact of the operator's concentration on the market competition, the Ministry of Commerce decided to impose restrictive conditions on the concentration, and the operator can implement concentration from the date of the announcement, but the obligations to be fulfilled include: The merged company should Continuing to maintain current sales practices and procedures for potassium chloride, continue to sell potassium chloride to the Chinese market through direct trade, and continue to supply stable and reliable potassium chloride products to the Chinese market through rail transport and maritime transport; as always Provides a full range and sufficient quantity of potassium chloride products for the Chinese market, including potassium chloride products with 60% and 62% potassium oxide content; regular negotiation procedures should be maintained, and price negotiations should fully consider the history of transactions with Chinese customers. The status and status quo, as well as the specificity of the Chinese market; from the date of entry into force of the review decision or at the request of the Ministry of Commerce, the merged company shall report to the Ministry of Commerce the performance of the commitments, and the Ministry of Commerce shall have the power to Implement supervision and inspection, if any of the merged companies violates the above restrictive conditions To be punished according to the law have the right to the Commerce Department.

Globally, potassium resources are concentrated in a small number of countries, of which the world’s top three major potassium resource holders collectively account for more than 80% of the world’s total reserves. China's dependence on the international market for potassium chloride is relatively high. At present, about half of the demand for potassium chloride depends on seaborne trade and border trade imports, of which more than half come from Xie Ka, Wuka and its associated trading companies.

According to the provisions of the "Anti-Monopoly Law" of the People's Republic of China, if the monopolistic conducts outside China have the effect of eliminating or restricting competition in the domestic market, the "Anti-Monopoly Law" in China shall apply. The Ministry of Commerce is a centralized anti-monopoly review and enforcement agency for state-owned business operators, and the Anti-Monopoly Bureau of the Ministry of Commerce is responsible for the specific work of acceptance and business operators' centralized anti-monopoly review.

Russian potash producer Ukrainian Potash and Xie Ka announced the merger plan in December last year. Ukrainian potassium is Russia's largest and the third largest potash fertilizer producer in the world. 90% of its products are exported to Brazil, India, China and Malaysia. The concentration of this operator will result in the world’s second largest exporter of potassium chloride, second only to Canada’s Saskatchewan Potash Corp., and its market share will exceed 1/3 of the global market, making it the world's largest Suppliers together account for about 70% of global supply of potassium chloride.