India should explore buying fert mineral assets in 20 nations

Amid depleting natural resources globally, a government group has suggested that India should look at buying fertiliser mineral assets in over 20 countries including Belarus and Canada to meet the domestic shortfall.

In view of risk and huge costs involved in acquisitions, the Group also suggested that the government should create a fund with an initial corpus of USD 5 billion.

India imports about six million tonnes each of potash and urea and seven million tonnes of Di-ammonium Phosphate (DAP) every year.

"The need to secure various input (fertiliser) assets to ensure manufacturing and growth of the economy becomes more urgent given the limited availability of such inputs and their control by a few countries," said the Working Group set up by the Planning Commission for the 12 Five Year Plan (2012-17).

The Group suggested to the government to facilitate the entry of Indian firms into countries that are not able to exploit their resources optimally to explore options of ownership and sourcing of basic raw-materials like gas, rock phosphate and potash.

It also identified at least 20 resource-rich countries including Belarus and Canada where India can explore strategic investments and secure long term supplies.

The Group recommended the government to ensure financial resources for raw material assets acquisition and creation of funds for the purpose.

To accelerate the pace of acquisition, PSUs can be allowed to entertain proposals from various routes directly or indirectly subject to feasibility, it said.

The Group emphasised that the acquisition of fertiliser mineral assets abroad is "very important" considering a global scenario of depleting natural resources both energy and minerals.

It also pointed out that rising global prices of raw materials and finished fertilisers is making the growing fertiliser subsidies unsustainable.

For example in Belarus, which has one billion tonne of proven deposit of potash, the Group suggested the government to explore buying stake in the state-controlled Belarus Kali, which enjoys complete monopoly on exploration.

India has been in talks with the Belarus government to buy stake in potash miner Belarus Kali for quite some time. However, no progress has been made yet.

In the case of Canada, it said, "One-fifth of Indian import of potash is from Canada. Possibility of setting up joint venture projects in mining and off take of potash to India should be explored."

India is estimated to consume 33.67 million tonne urea, 12.41 million tonne DAP, 4.79 million tonne potash and 11.42 million tonne of complex fertilisers by the end 2016-17 fiscal.