Phosagro S Regulatory News (PHOR)

For Immediate Release 05 November 2013 PhosAgro Begins Construction of New Energy Efficient 760 ths tonne/year AmmoniaProduction Facility in Vologda Region Moscow - PhosAgro (Moscow Exchange, LSE: PHOR), one of the world's leadingvertically integrated phosphate-based fertilizer producers, announces that ithas begun construction of a new, energy efficient ammonia production plant witha capacity of 760 ths tonnes/year at PhosAgro-Cherepovets in the Vologdaregion. Vologda region Governor Oleg Kuvshinnikov, Russian Federation State Duma DeputyVyacheslav Pozgalev, Chairman of the Vologda Region Legislative AssemblyGeorgiy Shevtsov, Cherepovets Mayor Yuri Kuzin, the Archbishop of Vologda andVelikoustyuzhskiy Maximilian, Russian Union of Chemists Vice President andDeputy Chairman of the PhosAgro Board of Directors Andrey Guryev,PhosAgro-Cherepovets CEO Alexei Grigoryev and representatives of theconstruction contractors attended the ceremony to mark the start ofconstruction. The contract with an international consortium led by Mitsubishi HeavyIndustries Ltd was signed during the St. Petersburg International EconomicForum in June 2013. The consortium also includes Sojitz and RenaissanceConstruction. The licensor of the ammonia production technology is HaldorTopsoe (Denmark), a leading global engineering company in this sector. The new ammonia line will have a production capacity of 2,200 tonnes/day (760ths tonnes/year). It will be the first ammonia line of such capacity incontemporary Russia. Total investments into the production facility and relatedinfrastructure are expected to exceed RUB 25 billion. The commissioning of thenew ammonia plant is planned for 2017. Construction of the third ammonia production line at PhosAgro-Cherepovets is akey part of PhosAgro's long-term modernisation and growth strategy. Projectdevelopment was led by the National Mineral Resources University (St.Petersburg) and is aimed at the ground-up modernisation of the Company'sproduction technologies using the best available technologies. PhosAgro Cherepovets CEO Alexei Grigoryev said: "PhosAgro's investmentprogramme has helped our Cherepovets production site to develop over recentyears into a leader by mineral fertilizer production capacity and volumes inboth Russia and Europe. The launch of the new production line will both enablePhosAgro-Cherepovets to become self-sufficient in ammonia and lay thefoundation for further expansion of its fertilizer production capacities." The new ammonia production facility will rank among the best in the world interms of raw materials and energy consumption, as well as labour productivity.Natural gas consumption per unit produced is expected to be 20% lower than thecurrent average for ammonia production facilities in Russia (945 m3/tonne).Operating costs are expected to be 20% lower than those of the other ammonialines currently operating at PhosAgro-Cherepovets. The new facility will alsomeet the most stringent environmental and safety standards. With the launch of the new ammonia plant, PhosAgro's ammonia productioncapacity will increase by nearly 70%, enabling the Company to reach fullself-sufficiency in this raw material and creating a foundation for furtherdevelopment of PhosAgro's Cherepovets chemical complex. A portion of theammonia produced will be sold to the market. Deputy Chairman of the PhosAgro Board of Directors Andrey Guryev said: "Wesuccessfully completed the first stage of this project, which involvedanalysing the economic parameters and choosing a contractor, when we signed theagreement with the international consortium. Today we start the second stage,which is the actual construction of the ammonia production facility. Theeconomic situation today is challenging, but the key is for us to continue togrow without slowing down. The new production facility, new technologiesenabling high-quality products and new jobs are what give us hope in thefuture, and what enable us to not just survive the crisis, but to come out ofit with new strength, and to fill the Vologda region and Russian Federationbudget coffers." Vologda Region Governor Oleg Kuvshinnikov expressed his belief that the newammonia production line should be a priority project for the Northwest FederalDistrict, saying: "PhosAgro is the largest taxpayer in the region and thelargest investor in the Northwest Federal District. Including this new ammonialine, the company has invested over RUB 60 billion into the development of itsCherepovets site. This includes important social investments like theconstruction of corporate housing, support for children's sport, educationalprojects and help in building an orthodox church. All of these projects areimportant for the Company and its employees, as well as for Cherepovets as awhole." PhosAgro CEO Andrey A. Guryev said: "This high-priority project is expected toenable PhosAgro to strengthen its position as one of the world's leadingvertically integrated producers of phosphate-based fertilizers and to increaseshareholder value. In addition, there will be new highly productive jobscreated by the completed ammonia line, and payments into local and federalbudgets will increase." For further information please contact: OJSC PhosAgroIrina Evstigneeva, Head of Corporate Finance and Investor Relationsir@phosagro.ru+7 495 231 3115 Timur Belov, Press Officer+7 495 232 9689 EMSam VanDerlipvanderlip@em-comms.com+44 7554 993 032+7 916 306 6112 Notes to Editors PhosAgro is a leading global vertically integrated phosphate-based fertilizerproducer. The Group focuses on the production of phosphate-based fertilizers,feed phosphate and high-grade phosphate rock (with P2O5 content of not lessthan 39 percent), as well as ammonia and nitrogen-based fertilizers. The Group is the largest phosphate-based fertilizer producer in Europe, thelargest producer of high-grade phosphate rock worldwide and the second largestMAP/DAP producer in the world (excluding China), according to Fertecon.PhosAgro is also a leading producer of MCP feed phosphates in Europe, and theonly producer in Russia. PhosAgro has 2.1 billion tonnes of resources (according to JORC) of highquality apatite-nepheline ore, representing over 75 years of production. TheGroup also controls substantial Al2O3 resources and has 41% of Russia's rareearth oxides resources according to the G.P. Luzin Institute of EconomicProblems of the Kolskiy Scientific Centre of the Russian Academy of Sciences,2010). The Group's mines and phosphate rock production facilities are located in themountainous areas of the Kola Peninsula in the Murmansk region of northwestRussia, whereas its fertilizer and feed phosphate production assets are locatednear the city of Cherepovets in the Vologda region and near the city ofBalakovo in the Saratov region of southwest part of European Russia. PhosAgro's2012 IFRS revenue was over USD 3.4 bln and EBITDA was USD 1.1 bln. The Сompany's net debt/EBITDA ratio was 0.77 at 31 December 2012.

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