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. Last Updated: 07/27/2016

Sinkhole Threatens Railroad Link to Potash Mining Firm

YEKATERINBURG -- Silvinit, a miner supplying over 10 percent of the world's potash, could be forced to halt all shipments of the fertilizer within 20 days, as subsidence makes its only transport link impassable.

The likely disruption of potash shipments from November, as a sinkhole encroaches on the railway line near the remote mine, has prompted rival producers to curtail new orders and boosted fertilizer company stocks on concerns of a looming shortage.

"Scientists have found that the hole is moving at an average 2.5 meters daily. If this tendency continues, the hole could reach the railroad in 20 days," Silvinit spokesman Anatoly Subbotin said.

Fertilizer prices have risen in the past year on strong world demand for grains. Supply was already tight before news broke of Silvinit's supply disruptions, the result of a sinkhole created by flooding at the nearby Mine 1, operated by rival producer Uralkali.

Silvinit, the world's third-largest potash supplier, is continuing to ship potash. The market impact will depend on how fast the sinkhole encroaches on the railroad and how long it will take to build an alternative route.

"There are no alternative rail routes for shipment of 450,000 to 480,000 tons per month of production," Subbotin was quoted as saying by Vedomosti.

Subbotin said that on the night of Oct. 24 the hole increased in size by 30 meters toward the only railroad linking Silvinit's mine in the Perm region to the Trans-Siberian Railroad. By Oct. 26, the hole had widened to about 100 meters.

Subbotin said Silvinit was prepared to start construction of a new rail line to bypass the affected area, but could not agree with local authorities on its route.

State-owned Russian Railways is building a 6-kilometer link, scheduled for completion no earlier than Feb. 1, 2008.