Our Bureau

New Delhi, Feb.10

The Indian Farmers Fertiliser Cooperative Ltd, IFFCO, has taken a 20 per cent stake in GrowMax Agri Corp, a Canadian company owning potash mining concessions in an 820-sq.km (2,02,000 acres) area of Peru.

“The joint venture (JV) is developing the huge surface brine reserves in the Bayovar area of North-West Peru to set up a 2,50,000-tonnes-per annum (tpa) potassic fertiliser plant, eventually expandable to 5,00,000 tpa. Besides taking a 20 per cent stake, we will have a buyback agreement for 50 per cent of the potash produced,” the Managing Director of IFFCO, Dr U.S. Awasthi, told presspersons here on Wednesday.

India, which has no indigenous potash deposits, now imports its entire potassic fertiliser (muriate of potash) requirement of nearly 45 lakh tonnes (lt) from Russia, Belarus, Canada, Israel and Jordan.

“IFFCO's own annual consumption for production of complexes is about 12 lt. Once production from the JV starts in two years, we will be able to secure a significant part of our requirements,” Dr Awasthi said.

The project, estimated to cost $125 million, will have an equity component of $50 million, with IFFCO contributing $10 million. “Normally, you have to mine up 3,000 metres or more for potash, whereas in the Bayovar region it is present in brine (liquid) form at hardly 5-30 metres depth,” he noted.

The CEO of GrowMax Agri, Mr Barclay Hambrook, said the Bayovar potash blocks were strategically located 6 degrees from the equator.

“The desert climate and extremely high evaporation rates are conducive for potash recovery from the brine using low-cost solar evaporation technology. You just pump the brine to solar ponds and allow it to evaporate,” he said. Overseas route

The Rs 33,000-crore IFFCO has, in recent years, deployed the overseas JV route for securing supplies of others fertilisers and intermediates as well.

IFFCO and Krishak Bharati Fertiliser Cooperative currently own 25 per cent each in Oman India Fertiliser Company, in which Oman Oil Company holds the balance 50 per cent. In 2009, roughly 20 lt of urea imports were routed through this JV.

For phosphoric acid (an intermediary for di-ammonium phosphate or DAP), IFFCO has two JVs in Senegal and Jordan. The first, Industries Chimiques du Senegal (ICS) — where IFFCO, along with the Chennai-based Archean Group and Government of India, controls 85 per cent — supplied 2 lt of acid in 2009, which is expected to rise to 5 lt this year.

The Jordanian JV — Jordan India Fertiliser Company in which IFFCO has 52 per cent — will produce 4.65 lt of phosphoric acid on commissioning by end-2012.

In addition, the cooperative has picked up 15 per cent in Australia's Legend International Holdings Inc (OTCBB:LGDI) , which is executing a project to mine rock phosphate at Lady Annie in Queensland. IFFCO has signed an offtake and supply agreement for sourcing 30 lt of rock annually from the JV.

Rock phosphate is a raw material for phosphoric acid, with 3.6 tonnes of rock used for every tonne of acid. IFFCO's DAP plant at Paradeep in Orissa has an in-house 10 lt phosphoric acid facility, which alone requires some 36 lt of rock phosphate. The JV with Legend is meant to mainly cater to the Paradeep unit.