Comments
Gujarat State Fertilizers & Chemicals Ltd (GSFC) is planning to take management control of Canadian potash miner Karnalyte Resources Inc by acquiring an additional 15-20 per cent stake in the Toronto Stock Exchange-listed company.
GSFC had acquired 19.98 per cent stake in Karnalyte (Wynyard Carnallite Project) for Canadian $45 million (about ₹250 crore) in 2013. This helped the Gujarat state PSU to secure good quality supply of potash from Canada.
“An individual investor named Robin L Phinney holds 15 per cent stake in the company, but he is willing to join GSFC. So, after acquisition of additional 15-20 per cent stake, our combined holding will be beyond 51 per cent and we will take management control of Karnalyte. All the necessary clearances and approvals from the authorities have been obtained, including environment clearances,” said SK Nanda, Chairman and Managing Director, GSFC Ltd.
GSFC will invest about ₹150 crore for the acquisition. The company has SBI Caps as its banker, while Export Development Canada (EDC), a Canadian government credit agency, will also give financial assistance. It will take about eight years for GSFC to start repaying the debt after it starts production from the mines.
“Karnalyte's mines are spread across 40,000 hectares in the Saskatchewan province. This project will generate a lot of employment. Hence, the Canadian government is ready to support state-run firm GSFC,” said Nanda.
India's potash consumption of about 5-6 lakh tonnes per annum is highly dependent on imports, as the potash produced from mines in Udaipur, Rajasthan, is of poor quality.
“Canadian potash is of high quality. This acquisition will ensure secured supply of good quality potash for Indian consumers. We will also look for opportunity to export potash from Canada to other countries as well,” said Nanda.
Initially, six lakh tonnes of potash would be mined in the first year, of which about 1.5 lakh tonnes GSFC will procure and import to India through the Sikka port in Gujarat.
Presently, Europe and Canada enjoy good potash reserves. “We expect more demand for potash in the Asian market. This strategic acquisition will help us cater to that demand,” he added.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.