THE fertiliser story just keeps getting stronger.
Just a week after New York-based Global X Funds launched the world’s first fertiliser exchange-traded fund – in which Australia’s Incitec Pivot (ICP) is the third largest investment – now an Indian state-owned company has signed the initial agreements to participate in a Northern Territory phosphate deposit.
National Minerals Development Corp will, as had been rumoured, work with Minemakers (MAK) to conduct a feasibility study into the latter’s Wonarah project which has a resource of 1.26 billion tonnes at 12 per cent phosphate.
India and China between them account for 40 per cent of world fertiliser use, but India’s grain yields are still less than half those of crops in the US. Recent figures issued by the Indian government show the demand for fertiliser in the country is higher than ever.
However, Indian newspapers have been reporting in recent weeks there could be a fertiliser shortfall ahead of the summer sowing season. The product most affected by world demand and disruptions in North Africa, diammonium phosphate, is also likely to keep growing in price.
India therefore faces more food price rises, a growing problem in the country. The country’s food price inflation is now running at 8.55 per cent.
National Minerals Development has the right now to earn a 50 per cent stake in the Wonarah project. It will reimburse Minemakers for past spending on the project.
The longer term plan is for the two companies to work together to produce downstream fertiliser products including diammonium phosphate.