OREANDA-NEWS. May 18, 2007. JSC Acron’s press office reports that JSC Apatit, the monopoly producer of apatite concentrate, has violated the long-term contract the companies entered into by decision of the Moscow Arbitrazh Court. In April and May, Apatit deliberately disrupted and continues to disrupt concentrate supplies to Acron.

Apatit has deliberately disrupted supplies of the raw materials required for mineral fertilizer production. The disruption comes during the spring planting season, when Russian agricultural producers’ demand for fertilizers rises sharply.

Because of Apatit’s unlawful acts, in April Acron received 1,900 fewer tonnes of apatite concentrate that is a necessary raw material for producing phosphorous-containing mineral fertilizers. In May, Apatit refused to supply 18,100 tonnes of the concentrate, or half of the contract volume.

This shortage of raw materials during the planting season has forced Acron to take unprecedented emergency measures to minimize the negative effects of insufficient apatite supplies. The Acron sales department has reworked its product supply chain and confirms that domestic agriculture will receive top priority. Russian agricultural producers are receiving all the fertilizers they need at the expense of Acron’s export supplies.

Short apatite supplies have also forced Acron to shut down one of its two units that produce phosphorus-containing mineral fertilizers. As a result, the Company’s engineering services have put off scheduled repairs to the facilities, which will inevitably result in higher costs.

Acron believes that this deliberate disruption of raw material supplies is part of Apatit’s plan to exploit loopholes in the Antimonopoly Law and sell its products at exorbitant prices at the stock exchange.

Apatit’s unscrupulous failure to perform its obligation to supply apatite concentrate has already caused considerable damage to Acron; the specific amount is being calculated by Company experts.

Acron management has succeeded in minimizing the consequences of the current conflict. However, the Company is considering litigation as an option in its dealings with the monopoly supplier.