Voskresensk Mineral Fertilizers, OJSC(“VMF”) today announced that it has resumed its production at full capacity on January 6, 2010, following the denial of Apatit’s appeal by the Presidium of the High Court of Arbitration on December 22, 2009, and its support of previous decisions of lower courts of arbitration which obliged Apatit, through CJSC Phosagro AG, to sign a direct agreement with VMF to supply apatite concentrate in 2009-2011.
Evgeny Bogach, chief engineer of VMF, commented: “Due to the decision made by the High Court of Arbitration of the Russian Federation, we were able to resume production earlier than we expected. The plant’s employees returned to working full shifts on December 30, 2009, one month following the suspension of production as a result of the shortage of apatite concentrate in the absence of a direct supply agreement. During the downtime we have performed necessary maintenance works and reviewed our operational standards, which allowed us to resume the production in all our divisions without a delay and to avoid accidents at launch.”
VMF signed a long term agreement with OJSC Apatit, through its parent company CJSC Phosagro AG, to secure supplies of 920,238 tonnes of apatite concentrate annually in 2009-2011 according to the terms approved by the High Court of Arbitration of the Russian Federation. The agreement stipulates that the price is based on the 2009 level of RUB 3,050 per tonne which will be multiplied by the industry’s price appreciation index in 2010 and 2011, as calculated by the Federal State Statistics Service. The Federal Antimonopoly Service of the Russian Federation (FAS) recommended setting the price at RUB 3,050 per tonne of apatite concentrate produced by Apatit and OJSC Kovdorsky GOK in 2009.
According to the terms of the agreement, VMF made its first payment on the account to Apatit in January 2010 and received the first shipment on 6 January 2010, as per the agreed delivery schedule.