Government Considering Fertilizer Holding

The government is mulling the creation of a state-run holding from several fertilizer producers, sources told Interfax on Friday, indicating that the Kremlin could be moving into another key sector.

Industry and government sources told the news agency that the government might merge potash makers Uralkali and Silvinit and phosphate mineral apatite producer Apatit.

"The idea under consideration is to buy controlling stakes [in three companies], merge them and appoint government officials," a government source was quoted as saying.

The report highlights the confusion surrounding Uralkali, which earlier Friday appeared close to resolving a dispute over a controversial mine flood that threatened its future.

Uralkali said it had offered to pay about 3 billion rubles ($103 million) in additional compensation for damages stemming from the 2006 flood.

"Our company has offered voluntary compensation ... related to clearing up the aftermath of the accident as well as costs to construct two railway bypass routes," Uralkali president Anatoly Lebedev said.

Lebedev also said his company had not been approached by anyone regarding a merger and that Uralkali had not sought government financial support.