State-owned Gujarat State Fertilizers and Chemicals Limited (GSFC) has proposed to picked up 19.98 per cent stake Canadian potash mining company Karnalyte Resources Inc., Canada (KRN) for Rs 250 crore (C$45 million).
As part of the deal, the fertiliser major will get 350,000 tonnes per year (TPY) initially and the supply would increase to 600,000 TPY later on.
GSFC will get potash from Karnalyte’s Wynyard Carnallite project in Canada for a period of 20 years from the commencement of commercial production.
KRN and GSFC on Thursday executed a subscription agreement and off-take agreement with respect to the proposed investment in the presence of the KRN promoters and Canadian delegation.
It may be mentioned here that Canada is also a partner country for Vibrant Gujarat Summit 2013.
"At present, India is fully dependent on imports of potash. This is a significant partnership by an Indian fertilizer producer with an upcoming Canadian potash mining company abroad to procure high quality potash for the Indian market. Canada is a leading producer of potash in the world. It also has a well developed infrastructure and logistics along with economic dynamism to attract foreign investors," said Atanu Chakraborty, managing director, GSFC.
For GSFC, an assured supply would help in expanding its portfolio of fertilizers. GSFC also intends to use part of the potash imported from KRN for production of high grade NPK fertilizers at Sikka, for which new facilities are being constructed. "Hence, securing a dedicated supply line of high quality potash is expected to be of considerable advantage to GSFC in its constant endeavour to provide top quality agri products in the Indian markets," he added. Karnalyte is engaged in the business of exploration and development of high quality agricultural and industrial potash and magnesium products.
The investment by GSFC will part finance the cost of the Wynyard Carnallite project and is subject to regulatory approval and the final approval by the Saskatchewan Ministry of the Environment (MOE) for the corporation's environmental impact statement (EIS), the key governmental approvals required to commence further development of the mining facilities by KRN.