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Tata Chemicals buys US potash miner EPM

Tata Chemicals buys US potash miner EPM
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First Published: Fri, May 27 2011. 08 08 PM IST
Updated: Fri, May 27 2011. 08 08 PM IST
Mumbai: Tata Chemicals said on Friday its overseas unit had acquired ownership and control of US-based postash miner EPM Mining Ventures for an undisclosed sum.
Valley Holdings bought 16.67 million shares of EPM, representing about 32.9% of common shares on undiluted basis, Tata Chemicals said in a statement.
EPM holds the lease to mine potash in 95,172 acres of land as granted by the US government. In addition, it holds 40% stake in Emerald Peak Mineral that controls 6,409 acres of land leased from US state of Utah, Tata Chemicals said.
Potash -- a soil nutrient commands spot prices of about $500 a tonne, compared to $430 per tonne in 2010.
India, the world’s second largest importer of potash after China, has been negotiating with global potash miner groups seeking at least 10% discounts on the current spot prices.
While global potash demand is about 50 million tonnes, India buys about 5-5.5 million tonnes of the soil nutrient every year.
The Fertiliser Association of India in April said the industry would “take a holiday from import of potash” because of higher prices.
“It is a very good move for the company (Tata Chemicals) as buying potash at a competitive rate has become difficult for Indian buyers,” Tarun Surana, analyst with Sunidhi Securities and Finance said.
Tata Chemicals’ unit acquired these shares after the amalgamation of EPM and Yukon Inc, it said.
Prior to amalgamation, Valley Holdings had bought 16.67 million common shares of Yukon at C$0.67 per share, it said.
Demand for potash and other fertilisers is growing worldwide as farmers rush to maximise yields with grain prices at new highs.
“Many companies were trying for overseas potash resources and this seems to be a key achievement,” Surana added.
Along with Tata Chemicals, India’s major potash importers are Indian Potash Ltd, IFFCO, Coromandel International and Zuari Industries , which together account for almost 90% of the country’s imports.
Eight companies currently control more than 80% of global potash supply: Potash Corp of Saskatchewan , Mosaic Co , Agrium Inc , K+S , Uralkali , Silvinit, Belaruskali, and Israel Chemicals .
Shares of Tata Chemicals, valued at $2.02 billion, closed at Rs 362.60 on Friday, up 0.99% in the Bombay Stock Exchange that ended up 1.23%.
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First Published: Fri, May 27 2011. 08 08 PM IST