India fertilizer firms look to invest in Canadian potash makers

28 May 2012 08:34  [Source: ICIS news]

KOLKATA (ICIS)--India’s Ministry of Chemicals & Fertilizers has initiated bilateral talks with Canada, seeking facilitation for Indian fertilizer companies that are looking to make strategic investments in Canadian potash producers, a senior ministry official said on Monday.

“A delegation comprising representatives of the ministry and Indian fertilizer industry returned from Canada early this month and interactions have been very positive,” said the official.

“A number of Canadian potash producers made presentation, including their financials, before the Indian delegation. It is now for Indian fertilizer companies to appraise them and make formal offers,” he added.

Indian fertilizer producers such as Gujarat State Fertilizers & Chemicals (GSFC), Indian Potash Ltd (IPL) and Rashtriya Chemicals and Fertilizers (RCF) were keen to invest up to 10% of their equity in Canadian potash companies to ensure the long-term supply of potash.

There is also a possibility that the Indian government will financially back the overseas investments through a sovereign fund, proposed to be floated by the Ministry of Chemicals & Fertilizers, the official said.

A working group of India’s Planning Commission has mooted the creation of a $5bn (€4bn) sovereign fund for overseas acquisitions of fertilizer minerals such as rock phosphate and potash.

The Canadian potash producers being shortlisted for Indian investments include Western Potash, Allana Potash and Encanto Potash, all of which made presentations to the Indian delegation, the official added.

Strategic investments in Canadian potash assets would be crucial for securing the long-term security of fertilizer imports to India since the country is fully dependent on pottasic fertilizer imports, according to the official.

India imported 4.69m tonnes/year of potash, accounting for around 50% of global potash trade between April 2011 and March 2012, data from the Ministry of Chemicals & Fertilizers showed.

The Indian government in 2011 submitted a proposal to the government of Belarus offering $6bn to buy a 20% equity stake in Belaruskali, one of the world’s largest potash suppliers.

However, a deal has not been finalised despite several rounds of negotiations, the official said.

($1 = €0.80)

Author: Ajoy Das

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