December 18, 2014 / 4:34 PM / in 4 years

UPDATE 2-Uralkali may have to write down $1 bln for flooded mine

* Uralkali sees 2014 output unaffected by damaged mine

* Says may cut 2015 output to 10.2 mln tonnes if mine lost

* May bring forward new capacity (Adds output, write-down estimate in case of mine loss)

MOSCOW, Dec 18 (Reuters) - Uralkali, the world’s largest potash producer, may have to write down up to $1 billion for damage to its Solikamsk-2 mine and loss of potash reserves, while output could fall next year if the mine has to close, the company said.

Production at Solikamsk-2 was halted in November 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.

“If we talk about pessimistic scenario, total write-down might reach up to $1 billion and (the) maximum amount of write-down will be attributable to the lost reserves,” Uralkali’s chief financial officer, Anton Vishanenko said.

The flooding at Solikamsk-2 did not affect its overall 2014 output and the company is trying to save the damaged mine, it said earlier on Thursday.

Uralkali said it planned to produce 12 million tonnes of potash, a crop nutrient, this year by increasing capacity at other mines. It had previously said it aimed to produce between 11.5 million and 12 million tonnes.

But its 2015 production may fall to 10.2 million tonnes if the Solikamsk-2 mine is lost, the company said.

Uralkali said it might also consider bringing forward the commissioning of new production capacity.

“We continue to monitor the situation and implement the accident management plan and measures to minimise the consequences of the flooding,” Chief Executive Dmitry Osipov said.

Uralkali’s third-quarter revenue was up 5 percent year-on-year to $896 million, while potash production rose 19 percent to 3.2 million tonnes.

The company has postponed the cancellation of 12.5 percent of its treasury shares, it said in a separate statement earlier on Thursday.

The move, originally planned by the end of 2014, was designed to reduce its share capital and increase its free float to 38 percent from the current 33 percent.

Uralkali shares were up 14.5 percent in Moscow, outperforming a 4.5 percent growth in broad index. (Reporting by Polina Devitt; Editing by Vladimir Soldatkin, Pravin Char and Jane Merriman)

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