Coromandel to acquire stake in Senegalese rock phosphate miner BMCC
India-based Coromandel International has agreed to acquire a stake of 45% in Baobab Mining and Chemicals Corporation (BMCC), a Senegalese rock phosphate mining company, for $19.6 million (INR 150 crores).
Apart from the consideration, Coromandel International will provide a loan of $9.7 million (INR 75 crores) to Baobab Mining and Chemicals.
The Indian phosphatic fertilizer manufacturer is executing the acquisition through its fully-owned subsidiary Parry Chemicals.
The acquisition is the result of Coromandel International’s assessment of opportunities in phosphate mining to secure its rock phosphate requirements.
Baobab Mining and Chemicals is in the business of mining, production, and sale of rock phosphate. The Senegalese mining company had started active production of rock phosphate in 2021.
According to Coromandel International, the investment in Baobab Mining and Chemicals will help in bolstering its backward integration and will safeguard long term supply security of the key raw material.
At full capacity, Baobab Mining and Chemicals is expected to cover up to one-third of Coromandel International’s rock phosphate requirement.
Arun Alagappan — Executive Vice Chairman of Coromandel International said: “As part of the Hon’ble Prime Minister’s ‘Atmanirbhar Bharat’ vision, India is working towards achieving self-sufficiency in Phosphatic fertiliser production.
“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.
“Coromandel is committed towards achieving the Government’s self-sufficiency vision and has been strengthening its Phosphoric acid capacities by augmenting its captive production and leveraging its overseas partnerships in Tunisia and South Africa. The investment in Senegal is in line with the Company’s long term strategic objective of strengthening its sourcing capabilities to deliver superior value to all its stakeholders.”
The deal, which is subject to the meeting of preceding conditions, is likely to close in the second quarter of FY 2022-23.