BEIJING -- China's Ministry of Commerce (MOC) said Thursday that it has conditionally approved a merger between Russian fertilizer companies Uralkali and Silvinit.

The ministry decided to impose restrictive conditions on the merger, as it may result in excludability and restricted competition in the country's potassium chloride market, the MOC said in a statement posted on its website.

The business operator created after the merger will be required to fulfill "certain obligations" as part of the restrictive conditions, the statement said.
 
The operator should continue to directly sell potassium chloride to the Chinese market while ensuring stable and reliable supplies of potassium chloride products, the statement said.

The operator must also keep mutual agreement procedures in place and take its trading history and status with its Chinese clients into full consideration when negotiating prices, the statement said.

The operator must report its commitments to the MOC semi-annually or upon being requested to do so by the MOC, the statement said.

The MOC has the right to supervise and inspect the implementation of its restrictive conditions and impose punishments according to Chinese law in case of violations, the statement said.

Half of China's potassium chloride supplies are imported, and half of those imports come from Uralkali, Silvinit and their associated companies.

Uralkali, one of the world's largest producers of fertilizer, announced that it would take over Silvinit in December 2010. About 90 percent of its products are sold in China, Brazil, India and Malaysia.