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Russia-Belarus Uralkali Conflict Sends US Potash Stocks Higher

To begin the week of trading, potash companies were doing well on Monday morning, largely in reaction to the news that the Russian billionaire investor Suleiman Kerimov was considering selling his
Michael Teague is a staff writer for Equities.com. His previous experience includes three years as the associate editor of Los Angeles-based Al Jadid Magazine, a bi-annual review of the arts & culture of the Middle East, where he contributed many articles on the region in the form of features and book & film reviews. His educational background includes a BA in French literature from the University of California, Irvine, where he developed a startling proclivity for anything having to do with the 19th century.
Michael Teague is a staff writer for Equities.com. His previous experience includes three years as the associate editor of Los Angeles-based Al Jadid Magazine, a bi-annual review of the arts & culture of the Middle East, where he contributed many articles on the region in the form of features and book & film reviews. His educational background includes a BA in French literature from the University of California, Irvine, where he developed a startling proclivity for anything having to do with the 19th century.

To begin the week of trading, potash companies were doing well on Monday morning, largely in reaction to the news that the Russian billionaire investor Suleiman Kerimov was considering selling his 22 percent stake in Uralkali (URALL) .

Potash is the name used to classify a number of potassium-based compounds that are typically used in the manufacturing of fertilizer, and Uralkali is the world's leading producer of the compound. Uralkali has a market cap of $14.1 billion, and shares are currently trading for $24 each on the pink sheets. While the current price is quite a ways below the 52-week high of $43.25, the news has sent other potash manufacturers higher.

Potash Corp. of Saskatchewan (POT) , a company with a market-cap of $27 billion, was up 3.40 percent to $31.20. Meanwhile, American manufacturer the $18 billion market-cap Mosaic Company (MOS) was up 3.65 percent to $43.70, and the $973.2 million Intrepid Potash (IPI) was up over 5 percent to $13.57.

The Uralkali potash story is one that is fraught with intrigue and politics. The company abandoned its role in the key Russia-Belarus trade agreement last July, which has had a huge subsequent impact on the global industry.

But the incident has also led to the arrest of Uralkali CEO Vladislav Baumgartner by Belarusian authorities. Suleiman Kerimov has come under increasing pressure from Belarusian authorities, who accuse him of corruption, to sell his stake of the company, whose estimated value is said to be around $3 billion.

The incident has put much of the spotlight on a possible buyer, Russian billionaire Vladimir Evtushenko, the owner of the oil and telecom conglomerate Sistema. Evtushenko for his part has denied any rumor of his interest in the company.

It has also highlighted an interesting rift in Moscow politics. Vladimir Putin, who is currently being vilified  in Western media outlets for his support of the Syrian government, has not stuck up for Uralkali’s beleaguered head executive, while President Dimitri Medvedev has harshly criticized the Belarusian government for its treatment of him.

 

[Image Courtesy of Flickr Creative Commons]