Tata Chemicals is setting up of a potassium-based complex fertiliser plant in Canada by 2017 in association with EPM Mining Ventures.
R Mukundan, managing director of Tata Chemicals, on Monday said the partners have done the preliminary economic assessment for a sulphate of potash plant in the country, which favoured a setting up a 300,000 tonne per annum (tpa) plant.
Mukundan, while detailing the company’s business plans in the commodities space under which it manufactures or sells soda ash, urea and complex fertilisers, said on an earnings call on Monday that EPM has prepared the pre-feasibility report that favour a 300,000 tonne per annum (tpa) plant and a decision will be taken soon.
EPM, a specialty or complex fertiliser maker, in which Tata Chemicals bought a 25% stake in August 2011, controls mineral leases on more than 124,000 acre on the Sevier Dry Lake property in Millard County, Utah, Canada, through its wholly owned subsidiary Peak Minerals Inc.
According to EPM website, the sulphate of potash plant will be built in a phased manner and reach its full rated capacity of 300,000 tpa by 2020. It said the plant will have an estimated internal rate of return of 30% (pre-tax, inflated) and cost $310 million.
The plant will be commissioned next year with a capacity of 35,000 tonne in 2017 and ramped up to 100,000 tonne in 2018 and 210,000 tonne in 2019. “India imports all its requirement of potash (for fertiliser). Since globally 75% of its capacity is controlled by top five companies, India hardly has any bargaining power in purchase of potash. Therefore, the Canadian plant will give Tata a strong leverage in the potash market,” said an analyst with a domestic brokerage.