INTEGRATED REPORT 2016
Uralkali at a glance
URALKALI is a leading producer and exporter of potash, which is an essential component for the growth and development of all living organisms. The Company accounted for 18% of global potash sales in 2016. It effectively manages its entire production chain, from potash ore mining to supply of potassium chloride to customers.
Mission Statement
We produce potash fertilisers to ensure that people all over the world are provided with food, and also to support the growth of our Company and the welfare of our employees and local communities, through efficient and responsible development of unique potash deposits.
Our Values
Our values unite all of the Company’s employees,
regardless of which department they belong to or
what roles or responsibilities they have in Uralkali.
Our values provide us with strength and support
to drive further development. They are designed
to help each and every one of us in our work.
Safety
We strictly observe safety rules and do not tolerate violations
EFFICIENCY
We aim to attain the highest results at the lowest cost
Teamwork
We respect and trust one another and know that only by working together will we achieve high results
Responsibility
We always complete what we promised to complete on time
Our vision
- Uralkali is one of the world’s leading potash producers
- We are expanding our production capacity to satisfy demand for our products
- Our production priorities remain zero accidents and the lowest possible environmental footprint
- Our work is based on principles of clear division of responsibilities, KPI-based management and risk minimisation
- Uralkali is the most attractive employer in the Perm Territory and, potentially, in the Russian mining industry as a whole
- We attach a great importance to our people: we develop and promote our best employees
- We play an active role in the development of Berezniki and Solikamsk
- The Company operates transparently for all stakeholders
Our Assets
The Verkhnekamskoye deposit of potassium and magnesium salts, which is being developed by the Company, is the world’s second-largest deposit in terms of ore reserves. Uralkali’s production facilities include five mines, six potash plants and one carnallite plant, all situated in the cities of Berezniki and Solikamsk in the Perm Territory of Russia. The Company has licences for the development of three additional blocks of the deposit: Ust-Yayvinsky, Romanovsky and Polovodovsky. Uralkali employs around 11,000 people in its main production unit.
1,363.7
mln tonnes
mln tonnes
Total measured and indicated K2O reserves
20.5
thousand people
thousand people
Total number of the Group’s employees
What We Produce
MOP is applied directly to the soil and used to produce compound NPK fertilisers, as well as for other industrial needs. We supply this product mainly to China, Russia and Europe. White MOP is produced in the following concentrations: 95% and 98%.
Pink MOP is applied directly to the soil and we supply it primarily to India and South East Asia.
Granular MOP is a premium product bought in countries using advanced soil fertilisation methods. Granulation slows down the absorption of fertiliser nutrients into the soil, thus prolonging their action. We export our granular MOP to Brazil, the USA and EMEA, where it is applied directly to the soil or blended with nitrogen and phosphate fertilisers.
MINERAL RESOURCE STATEMENT
[AS OF 1 JANUARY 2016]
[AS OF 1 JANUARY 2016]
| All mines | Tonnage (mln tonnes) | K2O* (%) | K2O (mln tonnes) |
| Measured | 2,046.5 | 19.5 | 400.0 |
| Indicated | 5,230.9 | 18.4 | 963.7 |
| TOTAL MEASURED + INDICATED | 7,277.4 | 18.7 | 1,363.7 |
| Inferred | 310.3 | 26.8 | 83.3 |
| * Potassium oxide, 1KCI = 1,61K2O | |||
Year Highlights
Despite a continuing decline in demand for potash fertilisers and an increased competition in all key markets, Uralkali managed to produce 10.8 million tonnes and sell 11.0 million tonnes of potash in 2016.
SALES
[mln tonnes KCl]
[mln tonnes KCl]
11.0
min tonnes KCI
min tonnes KCI
PRODUCTION
[mln tonnes KCl]
[mln tonnes KCl]
10.8
mln tonnes KCl
mln tonnes KCl
AVERAGE EXPORT POTASH PRICES, FCA
[USD per tonne]
[USD per tonne]
US$172
per tonne KCl, FCA
per tonne KCl, FCA
UNIT CASH COGS
[USD per tonne]
[USD per tonne]
US$35
per tonne KCl
per tonne KCl
However, due to a 30% drop in the average export potash price (FCA), the Company’s net revenue decreased by 30% to US$1.85 billion. Last year, the Company paid special attention to optimising internal business processes and increasing the efficiency of its business model.
NET REVENUE
[USD mln]
[USD mln]
US$1,851
mln
mln
NET DEBT / EBITDA
4.67
ADJUSTED EBITDA MARGIN
1
64%
LOST TIME INJURY FREQUENCY RATE (LTIFR)
0.08
Our Markets
Through a wide network of sales offices, developed logistics and significant flexibility, Uralkali is able to sell products all over the world and meet our customers’ needs efficiently and on time. We strive to be an attractive and reliable supplier in all key markets.
7%
USA
20%
Latin America
11%
Europe
21%
Russia
7%
India
19%
China
14%
South East Asia
11 mln tonnes KCl
Total sales in 2016
Uralkali’s sales geography covers over 60 countries. The main markets are China, South East Asia, Brazil, India, Russia, the United States and Europe. Traditionally, exports account for the majority of Uralkali’s sales (79% in 2016).