Uralkali Shares Slide Over Sinkhole Discovery at Potash Mine

Uralkali shares plunged for a second straight day after a sinkhole was discovered at one of its mines in Russia's Perm region.

The company suspended work at the mine on Tuesday after a water inflow at the Solikamsk-2 potash mine, which accounts for around 20% of the company's production.

Shares in the Russian potash producer and exporter were down 8.5% at 0937 GMT on Wednesday morning, having already slipped by 9% on Tuesday.

The extent of the damage was not immediately clear but a water inflow at a different Uralkali mine in 2006 resulted in the operation being shut down permanently.

The sinkhole was uncovered around 3.5km east of the mine, the regional emergency ministry said on Wednesday, and measured 20 by 30 metres in area.

The plant can produce 2.3million tonnes of potash per year.

"We estimate that up to 24% of the company's capacity might be affected, with another 20% of capacity in geographical proximity to the flooded mine," Renaissance Capital said in a note, as cited by Reuters news agency.

In a worst case scenario, the company could lose as much as 30% of its net profit in 2015, the banking firm said.