KOLKATA (miningweekly.com) – Indian government-owned and -managed Rashtriya Chemicals and Fertilizers Limited (RCFL) is considering floating an independent subsidiary for acquiring fertiliser mineral assets and investing in joint ventures (JVs) overseas.
Jordan, which exports about 65% of its yearly phosphatic fertiliser production to India, would be a focus geography for the acquisition of rock phosphate assets, including exploring opportunities for setting up JVs, a senior official in the Department of Fertilizers said.
The proposal for setting up an overseas arm had been placed before the Ministry of Chemicals and Fertilizers, which would have to approve the investments in the government-owned fertiliser company, he added.
The Ministry, however, had asked RCFL to consider taking over the now defunct Urvarak Videsh Limited (UVL), a similar overseas arm floated in 2009 by fertiliser companies such as National Fertilizers Limited and Kirshak Bharti Cooperative Limited.
Although UVL too had been set up with similar objectives of acquiring fertiliser mineral assets abroad, the company had failed to strike a single deal since its inception. RCFL for its part was not keen on taking over an existing company and would prefer a new outfit with its own management in place, but the final decision would have to be taken by the Ministry, the official said.
India’s high import dependency for phosphatic fertilisers, at 90%, has prompted RCFL to seek a footprint in geographies rich in rock phosphate and to invest in establishing linkages to achieve raw material security, he said.
RCFL had already identified regions where the proposed overseas arm would focus on securing fertiliser mineral assets, including Jordan which had started bilateral talks with India for joint collaboration in exploring shale gas and rock phosphate assets.
So far, bilateral talks between the two countries indicated that the governments wanted RCFL’s overseas ventures to be modelled along the lines of the Indian Farmers’ Fertilizer Cooperative Limited (IFFCO),which already has marked a presence in Jordan.
Jordan India Fertilizer Company Limited, a JV between IFFCO and Jordan Phosphate Mines Limited, started phosphoric acid production earlier this year based on rock phosphate supplies by the latter.
However, tentative plans drawn up by RCFL gave higher priority to investing in rock phosphate mining assets and subsequently get into downstream value addition from the mining assets, the official said.