MINSK (Reuters) - Belarus has extended by two months the detention of the chief executive of Russian potash giant Uralkali, who was arrested in August following the collapse of a sales cartel which infuriated Russia's small ally.

Vladislav Baumgertner, 41, who has been charged with abuse of power and embezzlement, has been held under house arrest. Russia has said it will request his extradition - a possible face-saving formula for both sides.

"The term of the investigation has been extended by two months... He (Baumgertner) remains under house arrest," Pavel Traulko, an official for the Belarussian investigative committee, said on Monday.

Uralkali's withdrawal from a lucrative joint venture with state-run Belaruskali in July rocked the global potash industry and threatened Belarus, which is heavily dependent on cheap Russian energy and financial aid, with big losses.

The soil nutrient accounts for 12 percent of Belarus's state revenues and about 10 percent of export income. The cartel's demise angered President Alexander Lukashenko, Belarus's authoritarian leader.

Extradition could save face for Lukashenko, who has said his country could hand over Baumgertner as long as Russia took steps to prosecute him.

Uralkali has called the arrest of Baumgertner a provocation and has denied wrongdoing.

Belaruskali's output has plunged since August. But last week its trading arm, Belarusian Potash Company (BPC), said it had signed a three-year draft supply contract with China's largest fertiliser supplier and distributor, Sinofert Holdings, last week became the first to publicly throw his hat into the ring for a stake in Uralkali. Russian media have also named other possible bidders.

(Reporting by Andrei Makhovsky; writing by Richard Balmforth; editing by Jason Bush and Tom Pfeiffer)