Lukashenko Miscalculated

The flagship project won't turn out to be such a flagship after all.

Construction of the Nezhin Potash Plant is proceeding according to plan—if you ignore minor deviations, such as prices, completion dates, and production volumes. Now in its tenth year of implementing the “country’s flagship project” Lukashenko suggested that the government check “whether they had made a mistake in their calculations.” After all, there’s nothing more logical than building first and then starting to do the math, writes planbmedia.io.

“The Nezhin Mining and Processing Plant is a flagship project for the country. It is a very complex project that requires constant attention,” Lukashenko said at a special meeting on Monday.

However, he immediately complained: “There are difficulties with completing the work and commissioning the facility.”

To call these “difficulties” is, of course, putting it very mildly. When the project began in 2016, they promised to launch production as early as 2023. Then the launch dates were postponed due to certain geopolitical circumstances.

These circumstances are well known to everyone. China, which was supposed to provide a $1.4 billion loan to the plant, withdrew from the project due to the risk of sanctions. However, Chinese banks did manage to issue some of the loans. So they still have to be repaid.

“We’re building mainly with borrowed money, and it has to be paid back,” Lukashenko said on Monday.

In 2022, the project’s owner, Mikhail Gutseriev, was quietly removed from the project. The authorities decided to take over the potash plant themselves. By that point, Gutseriev had already invested $500 million in the construction.

But that didn’t help the plant. They didn’t manage to finish it by 2022. So the authorities decided to take on the project in phases. That is, to launch the first phases first and complete the rest using the money earned from potash sales.

“Unfortunately, the commissioning of the first and second phases by the set deadline—July 21, 2026—cannot be guaranteed. The government promised to commission these phases by a revised deadline—November 1. Today is precisely the date when we are supposed to hear a report on the results,” said Lukashenko.

However, the results turned out to be modest. By the set deadline, the government had fulfilled half of the scaled-back commitments it had undertaken. According to Deputy Prime Minister Nikolai Snopkov, the potash plant will produce 500,000 metric tons of fertilizer by the end of the year. Although the plan called for at least one million metric tons.

“Next year—a solid one million metric tons. All acceptance certificates have been signed. The first and second phases have been put into operation. All commissioning complexes have received approvals from regulatory authorities,” he said.

One million metric tons—especially if shipped by rail—is, of course, good. But just recently, the government promised that next year’s output would be two million metric tons. In fact, even Lukashenko believed this right up until the very last moment.

“The plan is to complete construction of the third and fourth production units by the end of next year and bring production up to 2 million metric tons of potash per year,” he stated on Monday. This was even before Snopkov delivered his report.

So it turns out that the plans have been revised again, but they forgot to tell Lukashenko about it in advance. Then again, maybe it’s for the best. Why upset people in advance?

One has to assume that when the Nezhin Potash Plant was offered for sale to the Americans, they weren’t privy to these minor details either. But they apparently figured it out on their own. Therefore, the hope that the Americans would provide the money and then handle everything themselves turned out to be in vain. So it really is high time for the government to recalculate everything from scratch. And perhaps after that, the flagship project will turn out not to be such a flagship after all.

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