Zuari-Mitsubishi JV buys 30% stake in Fospac

3 January 2012 (Last Updated January 3rd, 2012 18:30)

MCA Phosphates, a Singapore-based joint venture (JV) between Zuari Industries and Mitsubishi Corporation of Japan, has acquired a 30% stake in Fosfatos del Pacifico (Fospac) of Peru for a total value of $46.12m.

MCA Phosphates, a Singapore-based joint venture (JV) between Zuari Industries and Mitsubishi Corporation of Japan, has acquired a 30% stake in Fosfatos del Pacifico (Fospac) of Peru for a total value of $46.12m.

Mitsubishi Corporation owns a 70% stake in MCA Phosphates and K K Birla Group company Zuari Industries owns a 30% stake.

Fospac project has an estimated 540t of phosphate rock with an average P2O content of 18.5% before beneficiation.

The project is expected to have an initial production capacity of 2.5Mtpa of concentrated rock phosphate of 29.5% P2O5.

Zuari Industries had invested $20m to acquire a stake in the JV.

The Zuari-Mitsubishi JV has entered into an offtake agreement with Fospac to buy the entire production of concentrated rock phosphate for a minimum of 20 years.

The contracted rock phosphate quantity is expected to partly meet teh raw material requirements of Zuari's DAP plants.

The company plans to set up a 1Mt integrated phosphatic fertiliser facility in a coastal location in India, reports economictimes.

Zuari, in partnership with Paradeep Phosphates, manufactures around 2Mt of DAP and imports an additional 1Mt of DAP.

Zuari is an importer of fertilisers and has joint ventures with OCP of Morocco and ICL of Israel, while Fospac is a subsidiary of Cementos Pacasmayo.

India is the world's largest phosphate importer and depends on foreign suppliers to meet 90% of its demand.

India's main suppliers are North African countries with large deposits of rock phosphate such as Morocco, Egypt and Tunisia.