29 August 2013 11:12 [Source: ICIS news]
LONDON (ICIS)--Polish multi-component fertilizer producer Zaklady Chemiczne Police (ZChP) has agreed a deal to acquire 55% of Senegalese phosphate rock mining company African Investment Group (AIG), ZChP said on Thursday.
The $28.85m (€21.64m) payment for the stake would be split into four tranches: $3m upon the signing of the deal, $9.5m once 100,000 tonnes of phosphate rock have been mined and sold, $9.5m once phosphate rock sales have exceeded 200,000 tonnes and $6.85m once another mining concession has been granted and another 100,000 tonnes of phosphate rock have been produced, it added.
The vertical integration achieved through the AIG acquisition would save ZChP approximately zlotych (Zl) 30m ($9.35m, €6.99m) on phosphate rock purchases in 2014, ZChP forecast.
AIG holds licences to mine phosphate rock in Senegal’s Lam Lam and Kebemer regions, and ilmenite in the northwest African country’s Sund Saint Louis region, the Polish state-owned fertilizer and titanium dioxide (TiO2) producer said.
The mining company’s phosphate rock and ilmenite resources are estimated at 56m tonnes and 1.5m tonnes, respectively, it added.
“The key question is the capital expenditure that will be required to launch production, which remains unknown,” Piotr Drozd, a chemical industry analyst at Prague-based investment bank WOOD & Company said in a note to investors on the acquisition.
ZChP is located in Police, a town on the Oder river and estuary, near Poland’s northwestern Baltic Sea coast.
The company, a subsidiary of the largest Polish chemical group Grupa Azoty, plans to use sea transportation in order to receive phosphate rock shipments from AIG.
($1 = €0.75, $1 = Zl 3.21 , €1 = Zl 4.29)
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