November 24, 2014 / 11:39 AM / 3 years ago

UPDATE 2-Uralkali prepares to start repair work at damaged potash mine

* Says no discussion yet on when production to resume

* Sinkhole appeared at a nearby mine (Recasts after company clarification on production)

By Natalia Shurmina

BEREZNIKI, Russia, Nov 24 (Reuters) - Russia’s Uralkali , the world’s biggest potash producer, is preparing to start repair work at part of the damaged Solikamsk-2 mine, though it is unclear when output of the fertiliser will restart.

Production at the mine was halted last week after an inflow of water at the mine, which accounts for a fifth of the company’s output and 3.5 percent of global capacity, and a huge sinkhole appeared at a nearby mine as a result.

The sinkhole, stretching 30 by 40 metres and found at an abandoned mine 3.5 km (2 miles) to the east, increased concern about the future of Solikamsk-2.

An inflow of water and the resulting sinkhole in 2006 forced another Uralkali operation to shut permanently.

The governor of the Perm region where Solikamsk-2 is located said the inflow of water at the mine had “practically stopped” and there was no danger to residents of the area from any possible expansion of the sinkhole.

“The possibility of starting work at half of the Solikamsk mine is being discussed,” Chief Executive Dmitry Osipov told reporters in Berezniki in the Perm region.

Later, the company clarified that this referred to maintenance work, and said there had not been any discussion with authorities about restarting full or partial production at the mine.

It quoted Osipov as saying that the company was discussing the possibility of starting “the backfilling of areas which could be considered potentially hazardous”.

Regional governor Viktor Basargin said: “Fortunately everything is unfolding under a different scenario to a week ago. There is practically no inflow.”

“We can say today that it’s possible to start work at the second mine, up to a level of about 50 percent,” Basargin said.

Uralkali’s Moscow-listed shares pared gains after the company said it was not considering restarting production, and closed up 3.8 percent.

Shares in Uralkali fell sharply last week after the water inflow forced the company to halt operations at Solikamsk-2. (Writing By Timothy Heritage and Vladimir Soldatkin; Editing by Jason Bush and Pravin Char)

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