Economic cooperation between Belarus and Russia is expanding

Vice-Premier Vladimir Semashko talked about the new plans to expand economic cooperation between Belarus and Russia. They include: MAZ-KamAZ holding, nuclear power plant construction, transferring potash trader under Swiss jurisdiction, Russian natural gas supply price reduction, and others.

At the moment it is difficult to say which of the aforementioned plans could be implemented, which are being implemented already, and which serve only as a tool for successful trading in main spheres of interest. In any case, Vladimir Semashko, while negotiating with Russians about cooperation terms was playing his traditional role: was overloading the other party with information and conditions.

In early July Belarus will sign a principal agreement with Russia for the construction of the first Belarusian nuclear power plant. Currently, preliminary works on the Ostrovets site, where nuclear power plants will be erected, have been finished: roads and railways were built. On July 31^st, works on foundation pit will start.

Belarus’ First Vice-Premier Vladimir Semashko said, while speaking in the Parliament on June 22^nd that a Belarusian-Russian holding Rosbelavto, merging MAZ and KamAZ will be created on the parity principle. The holding’s headquarters will be located in Moscow. Belarus’ input will be 75% minus one share of the Minsk Automobile Plant (MAZ), and Russian – 49.9% of KamAZ. KamAZ assets market value is assessed at USD 1.6 billion, MAZ – at USD 1.1 billion.

It is noteworthy that the holding will have control over MAZ (75% minus one share), while the majority of KamAZ stakes will be owned by other shareholders: Avtoinvest Limited – 24.53%, Daimler AG (Germany) – 11%, KAMAZ International Management – 4.25%, the European Bank for Reconstruction and Development – 4%, Decodelement Services Limited – 2.73%.

Belarus also believes there is a necessity to create other industrial holdings with the participation of Russian companies. Thus, Vladimir Semashko said the Belarusian State Association Gomselmash and the Russian group of companies Rostselmash plan to create a single management company on equal terms. Another option under consideration is co-operation between Minsk Wheel Tractor Plant (MWTP) and Russian GAZ.

Belarus is also studying a proposal concerning participation of Russian investors in Gomel Chemical Plant and OJSC GrodnoAzot, where a construction of a new production sight worth USD 1 billion is planned.

Soyuzkaly, a Russian-Belarusian fertilizers trader, set up on equal terms has been registered in Switzerland and will start operations in February 2013. The existing trader Belarusian Potash Company, which delivers potash fertilizers from Uralkaly and Belaruskali will continue operating until some time and later, apparently, will be winded up. In fact, Soyuzkaly is BPC, but with offices in Switserland.

Speaking in the Parliament, Vladimir Semashko also said that in the future, with the CES agreements taking effect, Belarus anticipated to buy certain amount of natural gas from Russian independent producers (Novatek and Itera) at prices lower than Gazprom’s. According to Vladimir Semashko, the average price of natural gas for Belarus in 2013 may be reduced compared with the actual operating costs in 2012 to USD 165.6 per one thousand cubic meters.