RE: Rumors out of Germany Indian govt supports Canadian potash hunt
13th August 2012
Updated 50 minutes ago
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KOLKATA (miningweekly.com) - The Indian government would assist its second-largest fertilizer producer, Rashtriya Chemicals and Fertilizers Limited (RCFL), to acquire an equity stake in potash assets in Canada.
The government-owned RCFL would be offered support in terms of diplomatic initiatives through Indo-Canada bilateral trade talks, raising funds from international and domestic institutions and sovereign guarantees, if necessary, an official in the Department of Fertilizers said.
The Ministry of Commerce would coordinate talks with the Canadian government, targeted potash companies and RCFL to facilitate the Indian major’s acquisition plans in that country, the official said.
This decision followed talks held late last year between the Ministry of Commerce and Industry and Canada's International Trade Ministry during which it was conveyed that potash trade between the two countries should be viewed from a strategic perspective instead of that of merchant trade on commercial terms, the official added.
Negotiations on a comprehensive economic partnership agreement between India and Canada were fast-tracked and an agreement could be concluded as early as the end of this year. The free trade partnership would boost RCFL’s bid to acquire fertiliser mineral assets in that country, the official said.
The department official declined to reveal details on assets identified for an equity stake buy-in by RCFL, but sources say Karnalyte Resources, Western Potash Corporation, Allana Potash Limited and Encanto Potash Corporation are on the Indian fertiliser producer’s radar.
For several years, India has been scouting for overseas potash assets to ensure supplies since negotiations on long-term supply contracts with potash miners were most often scuttled over pricing issues, a fertiliser industry analyst said.
A government-to-government initiative between India and Belarus for the acquisition of a 20% equity stake in government-owned potash miner Belaruskali has been hanging fire for the last two years.
India is one of the world’s largest consumers of muriate of potash and is fully dependent on imports, which were estimated at 3.9-million tons in 2011/12 and forecast to rise to 5.5-million tons in the current fiscal year.
Earlier this year, the Indian government declared a ‘potash import holiday’ at least until September 2012, as a move against alleged cartelisation by global potash miners.
Edited by: Esmarie Swanepoel
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