Murugappa Group’s Coromandel International Ltd will acquire 45 per cent stake in the Senegal-based Baobab Mining and Chemicals Corporation (BMCC), a rock phosphate mining company.
According to Coromandel International, the acquisition will be at an outlay of $19.6 million (about Rs 150 crore) and it will also provide a loan of $9.7 million (about Rs 75 crore).
The acquisition is happening through its wholly-owned subsidiary Parry Chemicals Ltd.
The transaction is expected to be completed in the second quarter of FY 2022-23 and is subject to satisfactory completion of conditions precedent as contained in the Agreements.
One of the largest private phosphatic fertiliser manufacturer and marketer in India, Coromandel International operates 3 fertiliser units for manufacturing about three million ton of phosphatic fertilisers.
Rock phosphate is a key raw material for manufacturing phosphoric acid, an intermediate used for phosphatic fertiliser production.
Coromandel has strategic tie up with leading integrated players like Tifert (Tunisia) and Foskor (South Africa) for meeting its phosphoric acid requirements.
Further, it has been augmenting its captive phosphoric acid production at Vizag plant and is sourcing rock from various countries.
As part of its strategy to strengthen the value chain, Coromandel has been evaluating opportunities in the phosphate mining to secure its rock phosphate needs, the company said.
The investment in BMCC will help in strengthening Coromandel’s backward integration and will ensure long term supply security of the key raw material. At full capacity, BMCC can meet upto one-third of the Coromandel’s rock phosphate requirement.
“Given the high dependence on rock phosphate imports, which is a key raw material for manufacturing Phosphoric acid, the proposed investment will be a step towards achieving long term sustainability and supply security goals for meeting country’s fertiliser needs,” Executive Vice Chairman Arun Alagappan said.