NEW DELHI: MCA Phosphates, the Singapore-based joint venture between fertilizer manufacturer Zuari Industries and Japan’s Mitsubishi Corporation, has bought a 30% equity stake in mining company Fosfatos del Pacifico (Fospac) of Peru for $46.1 million, a Zuari Industries release here said.
Additionally, the Zuari-Mitsubishi combine has entered into an off-take agreement with Fospac to purchase the entire production of concentrated rock phosphate after meeting local demand, if any, for minimum 20 years.
The Fospac mines project, located in the province of Pieura, has an estimated rock phosphate deposit of 540 million tonnes with an average P2O5 content of 18.5% before beneficiation. The project is expected to have an initial production capacity of 2.5 million tonnes per year of concentrated rock phosphate of 29.5% P2O5.
The project is expected to commence production in 2015. Fospac is a subsidiary of Cementos Pacasmayo S.A.A, a company listed in Lima Stock Exchange.
The contracted rock phosphate quantity from Peru will partly meet raw material requirement of Zuari’s DAP plants. In addition to its existing fertilizer capacity, the company will set up a 1 million tonne integrated phosphatic fertilizer facility in a coastal location in India, the release added.
At present, Zuari together with its associate company, Paradeep Phosphates Ltd., manufactures around 2 million tonnes of DAP and imports an additional 1 million tonnes of DAP.
Flagship of the Saroj Poddar-led Adventz Group, Zuari is India’s largest private importer of fertilizers and has joint ventures with OCP of Morocco and ICL of Israel.
India is the world’s largest phosphate importer and depends on foreign suppliers for meeting 90% of its demand. India’s main suppliers are North African countries like Morocco, Egypt and Tunisia with large deposits of rock phosphate.
However, few mines in these countries are up for sale. The fertilizer industry has been demanding government support through sovereign guarantees and special equity vehicles for setting up joint ventures and acquisition of assets overseas in raw material/feedstock-rich countries for urea, phosphates and potassic fertilizers.
