Sep. 7, 2012
NEW DELHI: A government Working Group has recommended that a consortium of public-private companies acquire mineral assets such as Rock Phosphate in countries like Uzbekistan and Jordan.
Rock Phosphate is a raw material used in making di-ammonium phosphate (DAP).
The Working Group Report on Mineral Exploration and Development (other than coal and lignite) for the 12th Plan (2012-17) submitted to the Planning Commission by Mines Ministry has also suggested creation of a Rs 1,000-crore fund for the purpose.
This was stated by Minister of State for Fertiliser Srikant Kumar Jena said in a written reply to Lok Sabha.
"The report by the Sub-Group II on 'strategy based upon the demand and supply for mineral sector' recommended that a concerted effort should be made by making consortium of public, private companies to acquire asset abroad specifically in countries like Uzbekistan, Jordan, etc.," Jena added.
The 42-member panel was headed by the Secretary Ministry of Mines.
"It has been proposed for creation of an new Central Scheme in the 12th Plan with fund requirement of Rs 1,000 crore. The fund allocation for the scheme is subject to deliberation in the Planning Commission and time frame for commencement cannot be indicated at present," he said.
The government is also preparing a concept paper on setting up a sovereign wealth fund (SEF) to acquire fertiliser and energy assets in foreign countries.
The paper is being prepared in consultation with all ministries concerned including Planning Commission, with a greater focus on mobilising resources from within, including the public sector undertakings, by creating an attractive instrument of investment.
The Fertiliser Ministry after conducting various studies on the requirement of crop nutrients and their raw materials in the country had prepared a proposal for creating a dedicated SWF for acquiring fertiliser assets abroad to augment domestic supplies.
Recently, the Working Group on Fertilisers, set up by the Planning Commission for the 12th Plan (2012-17), had suggested that India should look at buying fertiliser mineral assets in over 20 countries including Belarus and Canada to meet the domestic shortfall.
It had also recommended that in view of the risk and huge costs involved in acquisitions, the government should create a fund with an initial corpus of USD 5 billion.
Last year, the Planning Commission had also suggested setting up of a SWF with an initial corpus of USD 10 billion, mainly to invest in energy and mining assets abroad.
India imports 100 per cent of its requirement of potash, 90 per cent of that of DAP and about 20 per cent of urea.