In 2017, Acron Group presented an updated development strategy through 2025 designed to make maximum use of existing production potential.
The new development programme includes a number of highly efficient projects at Acron and Dorogobuzh with relatively small CAPEX and payback periods. The projects can be combined for flexibility in the investment programme, offering Acron Group greater control of its debt burden. In its new development strategy, Acron Group also focuses on the needs of its customers, expanding the product portfolio and further developing its distribution segment.
In 2018, the Group resolved to launch active construction at the Talitsky potash mine. This project will complete Acron Group’s vertical integration for the three key elements – nitrogen, phosphorus, and potassium – and will make Acron one of the most competitive NPK producers globally.
The strategy through 2025 is expected to:
- Boost capacity and output and expand the product portfolio
- Commence own potash production and complete vertical integration
- Considerably develop distribution and enhance penetration in key markets
In 2018, as part of its distribution development strategy Acron Group commenced supplying UAN to European markets through its new trading company, Acron France SAS. In 2018, the Group also established offices in Brazil and Argentina.
Projects in Progress
Acron and Dorogobuzh
Increase in Output,
|Construction of Urea-6 unit||210||Complete|
Construction of two nitric acid units and increase
in capacity of AN and NPK units
|Capacity increase at Ammonia-4 unit||70||In progress|
|Construction of urea granulation unit||Granulation: 700||In progress|
|Construction of CN (calcium nitrate) unit||100||
|Capacity increase at Urea-6 unit||520||In progress|
|Capacity increase at Ammonia-3 unit||130||In progress|
|Capacity increase at ammonia unit||130||In progress|
In 2008, Acron subsidiary Verkhnekamsk Potash Company (VPC) obtained a licence to explore and develop the Talitsky area of the Verkhnekamsk potassium-magnesium salt deposit in Perm Krai. The project is part of Acron Group’s vertical integration drive to create an independent potassium base for NPK fertilisers.
In 2008-2011, the Company conducted research and geological exploration in the Talitsky area. In 2012, VPC obtained approval from the state expert review board (Glavgosexpertiza) for the first stage of design documentation: shaft construction. In November 2012, VPC obtained construction approval and commenced preparations to construct skip and cage shafts. In 2013, the Company finished drilling freezing holes for subsequent shaft sinking. In 2014, VPC completed assembly of the equipment for the freezing plant, commissioned the administrative building and launched the main step-down substation. In 2015, the Company obtained Glavgosexpertiza approval for the Talitsky mine’s second stage, the underground mine. In 2016, approval was given for the project’s third stage, construction of surface facilities. Additionally, in 2016 the subsoil licence for the Talitsky area was amended to extend the licence term to 2053. In 2018, the Company started shaft sinking, .and by the end of the year sank 97 m of the cage shaft (total design depth: 364 m) and 44 m of the skip shaft (total design depth: 414 m).
During the St. Petersburg International Economic Forum in 2019, the Russian Ministry of Industry and Trade, the Government of Perm Krai, and Verkhnekamsk Potash Company signed a special investment contract to establish an industrial-scale production facility at the Talitsky area of the Verkhnekamsk potassium-magnesium salt deposit in Perm Krai with an annual capacity of 2 million tons of potassium chloride. Special investment contracts are a new public policy tool designed to encourage investments in Russian industrial production and decrease the risk to investors.
At the 2019 St. Petersburg International Economic Forum, Acron Group, VEB.RF, Gazprombank, and Sberbank reached an agreement on funding the project. The total project budget (including VAT and previously incurred expenses) is USD 2.5 billion. Of that, an investment of approximately USD 1.7 billion is required, with USD 869 million to be provided by VEB.RF and USD 802 million to be provided by Gazprombank and Sberbank. A syndicated loan facility will be granted for up to 15 years to finance the completion of vertical shaft sinking, mine development, and construction of the processing plant and related infrastructure.
The Talitsky mine has design capacity of 2.0 mtpa of potassium chloride with further expansion to 2.6 mtpa. Investment in the project to date exceeds USD 2.5 bn (including the cost of the licence).
Oleniy Ruchey Mine
In 2006, Acron subsidiary North-Western Phosphorous Company (NWPC) obtained a licence to mine the apatite-nepheline ore at the Oleniy Ruchey deposit in Murmansk region. This project is part of Acron Group’s drive to vertically integrate production of the phosphates required for NPK fertilisers.
The large-scale mine project includes an open pit and an underground mine. Mine construction began in 2010 after completion of exploration and design work. In late 2012, the Company started producing apatite concentrate.
In 2013, Oleniy Ruchey delivered all the Group’s phosphate feedstock and started shipping its products to third parties. With extraction of open-pit ore, the mine capacity was 1.2 mtpa of apatite concentrate.
In autumn 2017, NWPC started extracting ore from the underground mine, and it is estimated that further development of the underground mine will gradually increase total apatite concentrate output to 2 mtpa. In the beginning of 2018, a new railway branch connecting the mine with the main network was commissioned, which helped reduce the cost of feedstock transportation.
The deposit’s lifetime is estimated at over 50 years.
Total investment in the project will reach USD 1.1 bn.
In 2014, Acron entered the active phase of construction of a new large-capacity ammonia unit. The unit was commissioned in 2016. Its initial design capacity was 700,000 tpa, but in 2018, the unit’s capacity reached 800,000 tpa.
The project is unique because it is the first ammonia unit since the breakup of the Soviet Union constructed by Russian experts without outsourcing foreign workforce and based on design documentation drafted by the Russian design institute Novgorodsky GIAP.
Project investments totalled approximately USD 500 mn.
The Group launched construction of 210,000 tpa urea unit No. 6 at its Veliky Novgorod site in 2017 and commissioned the unit in 2018.
Investment in the project totalled approximately USD 50 mn.
Rare Earth Elements
Acron Group has completed a peerless project to process apatite-nepheline ore comprehensively and derive the rare earth elements cerium, lanthanum, neodymium, and light and heavy REE group concentrates from apatite concentrate process streams. Acron’s REE project is part of the sub-programme Rare and Rare-earth Metal Technologies of the Russian Government Programme to Promote Industry Development and Competitive Growth. Currently, Acron has the only operations in Russia that separate REE concentrates into elements in industrial-scale volumes. Apatite concentrate from the Oleniy Ruchey mine in Murmansk region provides the feedstock base for the process. This marks the first time that complex processing of apatite ores has been achieved in Russia.
The project was launched in 2010. In 2015, the first 20 t of products were shipped to consumers. The REE unit has a capacity for 200,000 tpa of REE oxides.
At this stage, end products are shipped to the domestic market for use in glass production, as catalysts for oil cracking and in the rubber industry. REE are also used to manufacture alloys, magnets, and electronics, as well as by the defence industry. The goal of this project is to create an independent base in Russia for rare-earth products. The project was overseen by the Science and Engineering Board on Rare Earth Products, headed by Academy of Sciences member Nikolay Laverov.
Acron has invested a total of approximately USD 50 mn in the project and created 100 jobs.
AS DBT Port Terminal Complex in Sillamäe
Construction of a port terminal facility for transshipment of liquid cargo (UAN and ammonia) at the Estonian port of Sillamäe started in 2006.
In 2008, the terminal loaded its first vessel with Acron’s UAN, and the first ammonia was loaded in late 2009.
The terminal has throughput capacity of 1.0 mtpa of UAN and 1.0 mtpa. A total of approximately USD 100 mn was invested in the project.
The Group launched construction of a new 350,000 tpa urea unit (the fifth unit) at its Veliky Novgorod site in 2008 and commissioned the unit in 2012. The unit was upgraded in 2017–2018, bringing its capacity to 430,000 tpa.
The Group invested a total of approximately USD 100 mn in this project.
Acron started construction of a new UAN (urea-ammonium nitrate liquid nitrogen fertiliser) unit at its site in 2006 and brought the 500,000 tpa unit on stream in late 2007. In subsequent years, that capacity was increased to 1.5 mtpa.
Acron invested a total of approximately USD 27 million in the project.