On June 6, 2012, Acron filed suit against JSC Apatit with the Moscow Arbitrazh Court.
The NPK production facilities at Acron and Dorogobuzh continue to stand idle because Apatit cut off apatite concentrate supplies in breach of its existing contract. The leadership of PhosAgro (Apatit’s managing company) is in material breach of the existing contract by imposing an irregular supply schedule and amending the terms of its contract with Acron unilaterally.
In June, Apatit shipped 7,856 tonnes of apatite concentrate to Dorogobuzh, which will allow the Company to resume operations for a maximum of ten days, whereupon it will have to stop the production again due to lack of raw materials. Apatit continues to avoid providing further shipments for a number of far-fetched reasons.
The monopolist is using an irregular supply schedule to distract the public and the government from the fact that PhosAgro is unwilling to meet its contractual obligations. Acron Group’s complex chemical facilities require continuous operation of equipment to ensure a safe working environment. Frequent stops and re-launches lead to imbalanced operation of equipment, which can result in incidents. PhosAgro must be aware that it will be held responsible for any environmental or industrial accidents in the Smolensk and Novgorod regions that result from its breach of contract. Acron demands that PhosAgro immediately resume regular raw material supplies as stipulated by the contract. We again ask PhosAgro management to come to its senses and stop endangering human health and lives.
Chair of Acron’s Board of Directors Alexander Popov on the conflict: “We are not asking for preferential treatment. We simply demand that PhosAgro respect the terms of our contract and supply apatite concentrate on the same terms as it does to other independent mineral fertiliser producers in Russia.”