March 11 (Bloomberg) -- Sergey Chemezov, the associate of President Vladimir Putin nominated to OAO Uralkali’s board, said his prime objective in joining the Russian potash producer isn’t to help it restore a marketing venture with Belarus.
Chemezov, who heads Russian industrial corporation Rostec, said in an interview he intends rather to use his position at Uralkali to support the business objectives of the state-owned organization by expanding cooperation with the potash supplier.
Uralkali in July broke up a potash venture with Belarus that accounted for about 40 percent of global exports of the soil nutrient, accusing its partner of selling cargoes outside their marketing agreement. Ownership of Uralkali has since changed, among the conditions Belarus President Aleksandr Lukashenko set before he would allow a reconciliation.
“My agreement to join the board shouldn’t be related to any kind of strengthening of Uralkali’s position in possible talks with Belarus to restore the trading partnership,” Chemezov said in Moscow. “I am not a specialist in Belarus.”
Chemezov has known Putin since they both lived in Dresden in the former East Germany in the 1980s, where the future president was a KGB officer. They later both worked in the administration of President Boris Yeltsin.
Chemezov was nominated to Uralkali’s board by billionaire Mikhail Prokhorov’s Onexim Group, which holds a 27 percent stake in the world’s biggest potash producer. Shareholders are due to vote on the nomination on March 24. He may become chairman of Berezniki-based Uralkali and help facilitate the renewal of relations between the company and its Belarus partner, Prime newswire reported on Feb. 24.
Chemezov’s role at Uralkali has more to do with developing links between the company and businesses like OAO VSMPO-Avisma, the world’s largest titanium maker and 25 percent owned by Rostec, he said.
“I agreed to join the Uralkali board because Uralkali mines carnallite, a component in titanium production, used by VSMPO-Avisma, and we are interested to expand cooperation in this field,” he said, adding that he has known Prokhorov for a long time. Uralkali’s press service declined to comment.
Rostec plans other mining projects, he said.
Rostec intends to exercise an option to acquire 25 percent of the Udokan copper project from Metalloinvest Holding Co., controlled by billionaire Alisher Usmanov, Chemezov said. Rostec’s option on Udokan can be exercised at any time, Metalloinvest’s press service said. Chemezov is also on the board of OAO GMK Norilsk Nickel, in which Metalloinvest holds 5 percent stake.
As part of a venture with billionaire Alexander Nesis’s ICT Group, the state-run company is seeking to buy the Tomtor rare-earth deposit.
“We are interested in this project as our companies account for 90 percent of Russia’s consumption of rare earth metals,” Chemezov said.
The venture between Rostec and ICT Group may invest about $1 billion in rare-earth projects, including building a processing facility for the 82,000 metric tons of monazite concentrate that ICT purchased from stockpiles, Nesis said in October.
Rostec’s venture with Boeing Co. plans to build the second stage of the Ural Boeing Manufacturing plant to make titanium products, which may require an investment of $100 million to $200 million, Chemezov said.
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