India plans to buy 30pc stake in Russian firm's potash project

India is looking to buy 30 per cent stake in Russian fertiliser producer ACRON's potash project through a consortium of three PSUs and one cooperative which could entail an investment of about USD 2 billion.
ACRON has offered 30 per cent stake in the project being undertaken by its subsidiary Verkhnakamsk Potash Company (VPC) to develop the Talitsky Potassium - Magnesium deposit in Perm Krai, Russia.
Government has formed a consortium of companies led by NMDC which will have 15 per cent stake in the project. While remaining 15 per cent will be shared among Rashtriya Chemicals and Fertilizers (RCF) and Kribhco, FACT and National Fertilizers Ltd in the ratio of 3:3:2:2 respectively.

"Department of Fertilizers (DOF) has constituted a Consortium consisting of NMDC, RCF, KRIBHCO, FACT and NFL. NMDC would act as lead partner with 50 per cent of the Indian stake in the project and the remaining 50 per cent shall be shared by RCF, KRIBHCO, FACT and NFL in proportion of 3:3:2:2 respectively. The overall investment in Project would be around USD 2 billion," NFL said in a BSE filing.
The board in their meeting held on November 13, 2014 have accorded in principle approval for participating in consortium for due diligence and on completion of due diligence, based on feasibility study and ways and means position of the company, participation in the project as a equity partner in the consortium shall be worked out, the filing added.

When contacted a senior official in the government confirmed the development and said that final decision would be taken after the final report of feasibility study, and added, "if proposal turned out to be feasible an agreement may be signed during the visit of Russian President to the country this year."

India imports 100 per cent of its requirement of potash, which was about 3 million tonnes (MT) in 2013-14.
In 2013-14, potash was imported at average price of USD 390 per tonne. In the current fiscal so far the country has imported 2.7 MT of potash at an average price of about USD 330 per tonne. Indian Potash Ltd is one of the major importers of potash while Russia and Ukraine are major suppliers.

Potash is a decontrolled fertiliser and government pays fixed subsidy on it. It is mainly used in the form of Muriate of Potash (MoP) by farmer as soil nutrient and also used in the manufacturing of complex NPK fertilisers.