Russian potash miner Uralkali (URKA.MM: Quote, Profile, Research, Stock Buzz), whose investors fear it faces a state asset grab in a probe of a mine accident, has approached the government to discuss a resolution, putting the ball in the state's court.

 

Uralkali said in comments emailed to Reuters it had written to Natural Resources Minister Yuri Trutnev and Deputy Prime Minister Igor Sechin about "managing the consequences of the accident." The company wrote two letters but would not comment on the contents of them.

 

Sechin, who oversees the natural resources sector, is a close ally of Prime Minister Vladimir Putin.

 

Russian newspapers said Uralkali made a pre-emptive offer to pay the government $270 million in compensation for a rail bypass built around the sinkhole that opened up when Uralkali's Mine-1 flooded in 2006.

 

Uralkali shares, which lost two-thirds of their value in the two weeks since Sechin ordered a new probe into a 2006 mine flood, rose 22 percent in London (URKAq.L: Quote, Profile, Research, Stock Buzz).

 

The shares are still down 92 percent from their June peak.

 

In a market comment, UniCredit analysts wrote: "We welcome Uralkali's decision, as it indicates the company has changed its stance and is now more willing to cooperate with the government, therefore increasing the chances of a financial solution."

 

The commission will evaluate costs incurred by the state to resettle citizens of the Urals city of Berezniki away from the sinkhole, and relocate the railway line, power and heat supply systems.

 

Uralkali has said its future would be in doubt if the government decided to impose the maximum punishment for the mine accident. Analysts have said the damages could be devastating if Uralkali is fined for lost potash ore.

 

"Despite attractive valuation, we view risk of an excessive fine as high," Citibank said in a comment on Uralkali.

 

"A standstill in potash markets amid Chinese negotiations is forcing producers to fill inventories without getting paid and Uralkali may be vulnerable to near-term one-off cash charges."

 

Investors in Uralkali, a darling of the stock market since its 2007 initial public offering, see parallels with the tax investigations into YUKOS which resulted in multi-billion dollar claims which forced the fire sale of its assets to state firms.

 

Investors are hoping that the Kremlin will speak up in favour of a peaceful resolution for Uralkali, as it did when Putin lambasted coking coal miner Mechel (MTL.N: Quote, Profile, Research, Stock Buzz), another investor favourite, over its coking coal policy.

 

An original investigation in 2006 found the Uralkali mine flooding was caused by "extraordinary and unavoidable events," Uralkali has said.