Lithuanian Railways notifies Belaruskali about contract termination

VILNIUS - Lietuvos Gelezinkeliai (Lithuanian Railways, LG), the country's state-owned railway company, has officially notified Belarusian potash fertilizer producer Belaruskali about the Lithuanian government's decision to terminate the existing contract between the two companies as of February 1.

The official notification was sent to the Belarusian company on January 17 and on January 18 the Belarusian company was notified that its applications under the long-term contract signed in 2018 won’t be accepted as of February 1.

Earlier this month, LG already refused to accept Belaruskali applications for the transportation of its fertilizers for the upcoming month.

"If we receive new requests from the existing or potential clients to transport Belarusian fertilizers, railway company LTG Cargo will hold consultations on them with state institutions, including the Commission for Coordination of Protection of Objects of Importance to Ensuring National Security," Egidijus Lazauskas, CEO of LG, said in a statement.

According to the statement, an analysis carried out by LG into the legal environment and the global fertilizer market shows that further steps are needed to create a solid legal path that will help to fully suspend the transit of fertilizers via Lithuania.

LG also provided to Belaruskali a copy of the Lithuanian government's resolution and the conclusion of the government's national security commission.

On January 12, the Lithuanian government decided that the state-owned railway company's contract with Belaruskali must be terminated because it is not in line with national security interests. 

The decision followed the same conclusion made in December by a special governmental commission vetting deals by strategic enterprises.  

Belaruskali product shipments via Lithuania did not stop after the US sanctions came into force on December 8, because the Belarusian company had made an advance payment to LTG, sufficient to cover the cost of rail services for several months.

The US sanctions, announced in early December, for Belaruskaya Kaliynaya Kompaniya (Belarusian Potash Company, BKK), an export subsidiary of Belaruskali, will come into force on April 1.