Coromandel secures phosphate dominance with new major stake in African mining company BMCC

Coromandel International Limited, a leading player in India’s agricultural solutions industry, announced a significant development in its pursuit of long-term supply security for phosphate fertilizers. The company disclosed that it will increase its shareholding in Baobab Mining and Chemicals Corporation (BMCC), a rock phosphate mining company based in Senegal, to 53.8%. The strategic move, finalized through its subsidiary Coromandel Chemicals Limited, positions Coromandel as the majority shareholder in BMCC.

With the acquisition of an additional 8.82% equity stake in BMCC, Coromandel will invest approximately $3.84 million (INR 32 crore) in equity and extend a loan of $6.5 million (INR 54 crore) to support BMCC’s operational expansion. The acquisition comes at a critical time when India continues to depend heavily on phosphate imports to produce fertilizers essential for its agricultural sector.

Key Expansion to Meet Rising Demands

Rock phosphate is a crucial raw material used in the production of phosphoric acid, an intermediate compound vital for manufacturing phosphatic fertilizers. BMCC has been a key player in the region, providing essential resources for Coromandel’s fertilizer production. Coromandel initially acquired a 45% stake in BMCC in 2022, stabilizing the company’s operations and enhancing its mining output. This latest investment signals the company’s commitment to securing an uninterrupted supply chain of rock phosphate.

Coromandel’s Managing Director and CEO, S. Sankarasubramanian, stated that investing in rock phosphate mines is pivotal to ensuring a steady supply of raw materials for India’s growing fertilizer needs. He also highlighted that the blend of rock phosphate sourced from Senegal has given the company greater operational flexibility. With this additional shareholding, Coromandel aims to optimize BMCC’s operations and ensure sufficient supplies of phosphate for its planned phosphoric acid plant in Kakinada.

Strategic Importance of the BMCC Stake

In recent years, global supply chains have faced numerous disruptions, and securing critical resources like phosphate has become essential for fertilizer producers. Coromandel’s expansion at BMCC reflects its long-term vision of building self-sufficiency, reducing dependence on external suppliers, and securing critical materials at favorable terms.

Senegal has become a key player in global phosphate mining, and Coromandel’s move to strengthen its foothold in the region is expected to support its efforts to meet India’s growing agricultural demands. The partnership is part of Coromandel’s broader strategy to capture more of the phosphate value chain, from mining to production, ensuring competitive pricing and quality control.

Expert Opinion: A Vital Step Toward Long-Term Security

An industry expert in the field of agricultural commodities noted that Coromandel’s move is not only a boost for the company’s supply chain but a key step toward long-term national security. “India’s agricultural sector relies heavily on phosphatic fertilizers, and securing stable sources of rock phosphate is critical to the industry. Coromandel’s increased stake in BMCC gives the company a significant competitive advantage in a market where raw material shortages could lead to increased production costs.”

With rock phosphate being blended at Coromandel’s Visakhapatnam unit and integrated into its manufacturing process, the company has positioned itself to handle future market fluctuations more effectively. The expansion also lays the groundwork for upcoming projects, including the new phosphoric acid plant.

Outlook for the Future

With 18 manufacturing facilities spread across India and a well-established network of distribution channels, Coromandel is set to capitalize on its latest investment in BMCC. The company’s efforts in environmental sustainability have also been recognized, with organizations like the United Nations Development Programme (UNDP) acknowledging its green initiatives. As part of the Murugappa Group, one of India’s largest conglomerates, Coromandel continues to strengthen its position as a leader in the agricultural sector.

Coromandel’s focus on securing raw material supply, coupled with its investment in infrastructure and innovation, positions it as a key player in India’s ongoing efforts to meet the country’s growing agricultural needs. By securing resources and optimizing operations, the company remains poised to navigate the global market and support India’s food security for years to come.