Moscow, Russia – 26 August, 2009 - URALCHEM, OJSC, (“the Company” or “URALCHEM”), one of the largest producers of nitrogen and phosphate fertilizers in Russia and the CIS, today announced that from September 2009, Azot, OJSC (Berezniki, Perm region) will begin deliveries of its new product - concentrated ammonium nitrate solution – to mining enterprises.

Production and sales of this new product expand Azot’s portfolio of industrial chemical products. Annual output will reach approximately 30-35 thousand tonnes of concentrated ammonium nitrate solution.

The new concentrated, high-quality ammonium nitrate solution is an intermediate product in the mineral fertilizer production chain. Ammonium nitrate solutions are a key component in the production of innovative emulsion explosives (EE), which are widely used in the mining industry to develop mineral deposits. Previously, there were challenges in using emulsion explosives, which stemmed from poor-quality oxidants, due to contamination from additives and microelements. However, ammonium nitrate solution is a high-quality and purified product. The use of this solution can significantly reduce energy consumption by granular ammonium nitrate dissolution units and greatly decrease the emulsifier consumption index.

Last year Azot specialists set out to design production units for high-quality ammonium nitrate solutions with the goal of producing the most modern liquid explosive. In addition, Azot’s has set up a unique technical system in order to adjust solution concentration and oxygen balance to meet customers’ needs. In order to comply with the temperature requirements – the solution crystallizes at a temperature below 70 degrees Celsius. Azot has built a special cistern to maintain the appropriate temperatures for the solution, 130 to 140 degrees Celsius.

Although transportation of ammonium nitrate in solution form poses practically no danger, special equipment must be used to comply with the required temperature levels during transportation. URALCHEM is the only company in Russia that has a railway cistern constructed in order to comply with these temperature requirements. The cistern holds up to 60 tonnes and is able to travel up to 1000 kilometers. In addition, the company has acquired three 25-tonne containers for highway transportation of ammonium nitrate solutions.

Tests have proven the emulsion explosives to be quite safe and affordable to produce, easy to transport and store, and very effective in use. The explosive qualities of emulsion explosives could be compared to trotyl, but emulsion explosives are much less dangerous and ecologically safe. Due to its ability to crush and break surface upon contact through a “wave effect”, this ammonium-nitrate explosive is considered an advanced industrial explosive. With regards to its transportation, production and performance, it is comparatively much more affordable than other explosives. The price of concentrated ammonium-nitrate solution explosives is much lower than the price of more traditional explosives.

Mikhail Markin, the Director of the branch of URALCHEM Management Company in Berezniki commented: “Concentrated ammonium nitrate solution for mining enterprises is a raw material, which can considerably decrease explosion-related costs and lighten the workload for miners. Additionally, it’s safe for the environment. Today, existing facilities in Russia are unable to meet the demand for this raw material for emulsion explosives. Therefore, Azot intends to expand its capacity to produce ship and transport ammonium nitrate solution to final customers.”