From the Jamestown Foundation's China Brief, November 5:
Introduction
At the beginning of September, the Belarusian news outlet Nasha Niva revealed that due to Western sanctions on Belarusbank, China had not paid another tranche of credit ($103 million) for the construction of the $2 billion Slavkaliy potash mining and processing plant in Lyuban, Belarus. The project has been stalled since June and subsequently, subcontractors have begun to leave the construction site (Nasha Niva, September 1). The investment is being carried out with China’s active financial support. In 2015, during Xi Jinping’s visit to Belarus, the Chinese Development Bank agreed to provide $1.4 billion credit, guaranteed by the Belarusian government (Mofcom.gov.cn, May 12, 2015). Importantly, the Slavkaliy project is owned by the Russian oligarch Mikhail Gutseriyev, who was also sanctioned due to his close business and political ties with Belarus’s President Alyaksandr Lukashenka; Gutseriyev provided $600 million for the project (Official Journal of the European Union, June 21).
So far, neither China nor Belarus have commented on the Slavkaliy credit holdup. Despite the China-Belarus “strategic partnership”, China views the looming political crisis in Belarus with growing concern, especially given the latter’s escalation of tensions with European Union (EU) member states and the resulting disruptions in potash supply chains. The credit freeze indicates that China responds to Western sanctions, and that Beijing is increasingly concerned with Alyaksandr Lukashenka’s conflict with the West, and has given Minsk a signal of its reassessment of the “strategic partnership”.
Western Sanctions on Belarus: Implications for China’s Potash Industry
The Belarusian potash mining and processing industry has faced serious problems due to international sanctions imposed on the regime following fraudulent presidential elections in summer 2020. The sanctions were further expanded in June due to human rights violations in Belarus and the forcing of a Ryanair plane to land in Minsk in order to arrest an opposition blogger, which was considered an act of air piracy in the West (Eurasia Daily Monitor, June 15). The restrictions imposed by the E.U., Great Britain, Canada and the US, affected two key sectors of the Belarusian economy: the petrochemical industry (which accounts for 8 percent of GDP), potash fertilizers (Belarus accounts for nearly 20 percent of global exports), and the financial sector (Eurasia Daily Monitor, June 30). Sanctions on the potash industry are potentially harmful to Belarus as the Belaruskaliy plant is the second-biggest producer of potash globally, and one of the main sources of foreign exchange for Alexander Lukashenka’’s regime (Belrynok.by, July 18, 2019).....
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