Potash miner Uralkali (URKA.MM) could face claims in excess of 3.1 billion roubles ($85.8 million) after a Russian government commission found it partly to blame for a 2006 mine flood, the company said on Wednesday. Uralkali said the commission's report listed expenses incurred by government in managing the consequences of the accident, including the resettlement of local residents and construction of a 6 km rail spur to bypass a sinkhole caused by the flood.
These expenses totalled 3.1 billion roubles at the time of the investigation. Additional future expenses, which have not yet been calculated, could also be incurred, including losses to state railway monopoly RZhD and losses of mineral resources.
There has to date been no judicial decision requiring Uralkali to reimburse the expenses listed in the report, the company said in a statement.
However, the company cannot give any assurances that claims will not arise for such reimbursements, which could exceed 3.1 billion roubles.
Uralkali said it was prepared voluntarily to compensate expenses incurred by the government in managing the consequences of the accident. Uralkali estimates these costs at around 3 billion roubles.
Russian Deputy Prime Minister Igor Sechin last year ordered the probe into the mine flood, which occurred in October 2006. A previous investigation in 2006 had absolved Uralkali of blame.
The new probe concluded blamed a combination of geological and technological factors and said systematic geological surveys would have detected the problem earlier, and that a protective pillar should have been placed under the railway. (Reporting by Robin Paxton; Editing by David Holmes)© Thomson Reuters 2009 All rights reserved