UPDATE 1-China gets 12.5 pct stake in Russia's Uralkali
* Bonds exchanged into stake worth $2 billion
* Major consumer now represented as shareholder
* Russia, Belarus seek to revive sales alliance
MOSCOW, Sept 24 (Reuters) - China, the world's largest consumer of potash, has acquired a 12.5 percent stake in Russia's Uralkali, the world's largest producer of the soil nutrient, via its sovereign wealth fund, Uralkali said on Tuesday.
The deal, a rare example of the Chinese acquiring direct ownership of Russian natural resource assets, was done amid speculation that tycoon Suleiman Kerimov might sell his large stake in Uralkali over a dispute between Russia and Belarus.
Chinese sovereign wealth fund China Investment Corp (CIC) , received the stake in Uralkali - now worth about $2 billion - in a bond exchange deal with Wadge Holdings Limited.
Wadge sold the exchangeable bonds to Chengdong Investment Corporation, a subsidiary of CIC, last November. The bonds were due in 2014.
Uralkali sent the $20 billion global potash market into turmoil when it quit a marketing alliance with state-owned Belaruskali in July. Minsk hit back by arresting CEO Vladislav Baumgertner on Aug. 26.
Russian President Vladimir Putin met his Belarussian counterpart, Alexander Lukashenko, on Monday on the sidelines of a regional summit to discuss the matter after both sides said last week that Baumgertner could be released.
Both Minsk and Belarus would like to revive the sales alliance, which controlled two-fifths of the world market, but with China on board as a shareholder it may become harder in future to curb sales volumes to underpin contract prices.
Kerimov's foundation owns 21.75 percent of Uralkali. His partners, Filaret Galtchev and Anatoly Skurov, own 7 percent and 4.8 percent, respectively.