APATIT, Russia — The European Commission has an unlikely ally in its fight for stricter environmental standards on agricultural fertilizers: a Russian oligarch.
Andrey Guryev Jr., chief executive of the phosphate mining company Phosagro and one of his country’s richest men, has been busy in Brussels. He’s leading a lobbying effort in favor of a Commission proposal to limit the amount of cadmium — a toxic heavy metal — in fertilizers sold within the bloc’s borders.
The EU’s plan, which is part of a broader reform of the €25 billion fertilizer industry, is intended to protect the environment and public health.
For Guryev, 35, it’s a once-in-a-lifetime opportunity to move aggressively into Europe. The fertilizer from his phosphate mines in Apatit, located 200 kilometers above the Arctic Circle, has naturally low levels of cadmium — unlike that from countries like Morocco and Tunisia, which dominate the European market but have high levels of the carcinogenic mineral.
“We can provide a better quality fertilizer and better service for the European farmers,” says Guryev. “Europe for us today is an opportunity to tell the story of pure phosphate.”
Guryev Jr., became CEO of Phosagro in 2013, when he took over the company from his father, Andrey Guryev Sr., who had built it during the wildcat years of Russian capitalism, growing it from a state-owned Soviet behemoth into a business with a stock market value of nearly €5 billion.
The phosphate Guryev plans to sell to Europe comes from Apatit, one of the world’s largest phosphate mines, located in the stark region of Murmansk in the Kola peninsula.
The Guryev family owns nearly 50 percent of the company — Vladimir Litvinenko, Putin’s campaign manager, holds another 19 percent — which was listed on the London Stock Exchange in 2011. In 2008, the family bought Witanhurst, the second-largest private house in London, after Buckingham Palace.
The elder Guryev is famously private. Though he served as a Russian senator for 11 years — stepping down in 2013 after the Kremlin introduced anti-corruption laws — he has never given a press interview.
His son is more open, in part because of his push to promote “pure phosphate.” In an interview in his office in Moscow, Guryev Jr. played down concerns raised in Brussels that strict limits on cadmium would give Phosagro — and thus the Kremlin — too much leverage in Europe.
“The fertilizers business is not energy, it’s not like the defense business,” he said. “If you look at the government involvement in Russian companies, it’s in infrastructure or oil and gas.”
Phosagro has desrcibed its product as “green fertilizer” in meetings with European officials | Remy Gabalda/AFP via Getty Images
“If you talk about using our commodity in a geopolitical way, we only represent 5 percent of the global trade.” he added. Phosagro is “not a Gazprom in any country,” he said, adding that Russia is not the only producer of fertilizer with low levels of cadmium.
Guryev is round-faced and stocky. He showed up to the interview on crutches, having recently slipped on ice in Moscow. He wore a shirt with a pink tie and an Audemars Piguet watch, valued at more than €30,000. (“It was a gift,” he said.) He declined to answer questions about his relationship with his father or the family’s real estate investments in London, but allowed that he has had a “short but productive life” and enjoys reading Russian history.
The phosphate Guryev plans to sell to Europe comes from Apatit, one of the world’s largest phosphate mines, located in the stark region of Murmansk in the Kola peninsula, a five-hour flight north from Moscow. Trucks the size of small buildings crawl across the ice-covered landscape, hauling phosphate rock from deep beneath the earth up an immense stepped pit. Inside the colossal phosphate processing factory, a billboard indicates the number of days since his last worker lost his life: 274.
“The first time I was brought to the mines I was around 15-16 years old,” Guryev said. He had just started working for the company and his father wanted to show him what was at stake, telling him, “If you want to have something you will have to go and work.”
On Tuesday, Guryev’s focus will shift from the ice-covered hilltops of Apatit to Strasbourg, where lawmakers in the European Parliament will hold a key vote on the Commission’s cadmium proposal.
Stricter limits would reshape the billion-euro fertilizer industry, providing Guryev’s sprawling enterprise with a significant boon and a leg up on its competitors.
The European Commission’s plan would tighten cadmium levels from 60mg/kg to 40mg/kg after three years and to 20mg/kg after 12 years, requiring mines in Morocco and other African countries to invest in new technologies to meet the new requirements. Today, 70 percent of EU phosphate imports come from North and West African countries.
Lawmakers at the European Parliament are set to hold a key vote on the Commission’s cadmium proposal | Christopher Furlong/Getty Images
There’s every chance that the EU’s fertilizer plans could shift toward endgame discussions from this week. If members of the European Parliament agree their positionTuesday, that will give the green light for three-way talks between the Commission, Parliament and the 28 EU countries.
For Guryev, everything is still to play for in this so-called trilogue phase. As is often the case on such technical files, the devil is in the details and MEPs are seeking amendments that oppose stricter limits on cadmium.
In the run-up to the vote, Guryev has engaged in a lobbying war, primarily with the Moroccan state-owned mining monopoly, the OCP group. In 2013, when Commission officials first proposed tightening cadmium levels below 60mg/kg, OCP hired the London-based law firm Dechert LLP to make its case, and as the fight intensified further, the PR firm Edelman.
In addition to pushing for stricter cadmium restrictions, Guryev has been lobbying the EU to drop a 6.5-percent import tax on Russian fertilizer.
For the past three years, Dechert has been in regular contact with Commission officials and MEPs in charge of the regulation, as well as permanent representations, distributing position papers and studies opposing the proposed limits.
Phosagro meanwhile has pressed its case directly, describing its product as “green fertilizer” in meetings with European officials. It has also hired EPPA, a Brussels-based consultancy, to convince EU countries with existing cadmium restrictions in national legislation to press for similar limits at the European level.
Guryev described Europe as “a key market” for the company and a target for expansion. In addition to pushing for stricter cadmium restrictions, he has been lobbying the EU to drop a 6.5-percent import tax on Russian fertilizer. “We are one of the largest suppliers to Europe anyway,” he said. “Who pays [for this policy] are the EU farmers.”
In the interview, he looked forward to a day when there would be better relations between Russia and the EU. The ongoing political tensions are harming business on both sides, and companies can only gain from closer, warmer ties. “I think every businessman today doing business between Russia and some other country is an ambassador for the country,” he said.