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Sinking operations are also in pro- gress for Cage Shaft No. 2, which is designed to transfer people and cargo. The shaft has been sunk more than 372 m and the installation of the tubbing lining will begin soon. It will also be completed in 2017. Construction of a hoist-engine house, step-down power substation, and administration and housing build- ing began at the Ust-Yayva production site. The foundation for a 6.3-km con- veyor belt to transport potash ore to the Berezniki No. 3 plant is under way. The company has also recently invested in electrical upgrades for these facilities as well. In December 2011, Uralkali signed a contract with Deilmann-Haniel Schachtostroj for the construction of the shafts at the Ust-Yayvinsky mine. Miners began sinking Shaft No. 1 in 2013. The mine will produce the first ore in 2020 and will enable Uralkali to replace the depleting ore reserves of the Berezniki No. 2 mine. Sales Optimization Profitability for Uralkali has not only suffered from the company's production losses, but also with the negative con- jecture related to global markets. Over the last three years, the price for KCl dropped from the peak of nearly $1,000/mt to $315/mt and Uralkali played a significant role in driving the market to the brink of collapse. Osipov was appointed CEO in December 2013 replacing the former CEO Vladislav Baumgertner who with- drew Uralkali from BKK, which market- ed potash for both Uralkali and state- owned Belaruskali, and this dispute caused the potash market to crash. He was jailed in Minsk for refusing to coop- erate and later extradited and placed under house arrest in Russia. Belarus has dropped its charges against Baumgartner, but both companies blame each other for undercutting and low prices. Uralkali today accounts for 20% of potash supplies and it ships potash to 60 countries. While the company has maintained its shipments to Brazil, the U.S. and Europe, and increased its deliveries to other Latin American countries, it has reduced the amount it ships to China and Southeast Asia. Uralkali is now actively working on a number of projects related to distribu- tion in key sales markets. To optimize logistics spends, the company will reduce the share of the containers as they now have more capacity to load and unload ships. Improving Effectiveness At the same time, within the period of the implementation of the new invest- ment plans, the company may also go through a number of structural changes. First of all, in the next several years, Uralkali is going to cut the staff by nearly 20% in order to catch up with its main competitor Canadian PotashCorp, according to Uralkali CFO Anton Vishanenko. "In terms of improving the effective- ness, Uralkali looks at the experience of PotashCorp. We employ about 10,000 people, while they have only 3,000 peo- ple, and the output they have is not much less," he said. In addition, he added that to boost effectiveness, the company is imple- menting a program of import substitu- tion. For example, the management of the Uralkali has already reached an agreement with one of the Russian fac- tories for the supply of amine concen- trators. So far, this product has not been manufactured in Russia. According to management, the sup- plies of the domestic-made amine con- centrators will let Uralkali avoid the risks of currency fluctuation, and in addition will keep it safe from any political risks. In the beginning of 2015, there were rumors that within 42 E&MJ; • DECEMBER 2015 www.e-mj.com U R A L K A L I Uralkali operates five mines and seven mills near Berezniki and Solikamsk in Russia's Perm Region.