Russia, Japan, China firms in massive fertiliser deal

Russian President Dmitry Medvedev oversaw the signing of a one-billion-dollar deal with Japanese and Chinese firms for a fertiliser plant, despite diplomatic tensions with Tokyo.

Russian government-affiliated Ammoni signed a contract with Japan’s Mitsubishi Heavy Industries and Sojitz Corporation and China National Chemical Engineering Corporation to build a plant producing ammonia and methanol.

The Kremlin chief is in Japan to attend the Asia Pacific Economic Cooperation (APEC) summit in the port city of Yokohama.

The deal — which a Kremlin spokeswoman said will see the construction of the first major fertiliser plant in 20 years — comes amid surging demand as food production rises in response to global population growth.

Rising demand has prompted Russia to work towards the replacement of ageing fertiliser plants that were constructed several decades ago.

The plant, to be located in the central Russian region of Tatarstan about 1,000 kilometres (600 miles) east of Moscow, is expected to come online in 2015, the Kremlin spokeswoman said.

It will produce just over 2,000 tonnes of ammonia a day, among other fertilisers.

The signing of the contract comes despite a bitter diplomatic row between Russia and Japan over disputed territory and ahead of a meeting between Medvedev and Japanese Prime Minister Naoto Kan Saturday.

The territorial spat flared up earlier this month when Medvedev made the first trip by a Russian leader to one of four Pacific islands claimed both by Moscow and Tokyo.

The dispute over the Kuril islands, known as the Northern Territories in Japan, has prevented the signing of a post-World War II peace treaty between Tokyo and Moscow and held up the deepening of economic ties.

Ammoni is a Russian company established by the government of Tatarstan and VEB state development bank in 2006, while CNCEC is a major Chinese construction and engineering firm directly controlled by the State Council.

“The order contract calls for plant engineering, procurement and construction, which is rare among contracts involving Russian projects,” consortium leader Mitsubishi Heavy said in a statement.

Source: AFP

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