Voskresensk, Russia – 13 January, 2010 - Voskresensk Mineral Fertilizers, OJSC (‘VMF’) today announced that it has signed a long term agreement with Apatit, OJSC (“Apatit”), through its parent company Phosagro AG, CJSC, to secure supplies of apatite concentrate according to the terms approved by the High Court of Arbitration of the Russian Federation.
In 2009, VMF attempted through courts to sign a direct agreement with Apatit. On 22 December 2009, the Presidium of the High Court of Arbitration dismissed Apatit’s appeal and upheld previous decisions of lower courts of arbitration which obliged Apatit, through Phosagro AG, CJSC, to sign a direct agreement with VMF to supply apatite concentrate in 2009-2011. Therefore, the Presidium of the High Court of Arbitration has closed this case and confirmed the rulings made by the Court of Arbitration of Moscow on 27 October 2008, the Moscow Ninth Appeal Court of Arbitration’ ruling on 20 February 2009 and the Moscow District Federal Court of Arbitration’ ruling on 23 April 2009.
According to the signed agreement, Apatit is ordered to supply 920,238 tonnes of apatite concentrate annually through 2011. The agreement stipulates that the price will be based on the 2009 level of RUR 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 RUR 3,050 per tonne of apatite concentrate produced by Apatit and Kovdorsky GOK, OJSC in 2009.
According to the terms of the agreement, VMF made its first payment on the account to Apatit on 29 December 2009 and received the fist shipment on 6 January 2010, as per the agreed delivery schedule.
Murad Chaparov, CEO of VMF, commented: “The signing of the long term agreement with Apatit to supply apatite concentrate will first and foremost enable VMF to resume its production.”