RCF-led group in talks with Canadian firm for potash supply

A consortium led by state-owned Rashtriya Chemicals and Fertilisers is in talks with Canada-based Encanto Potash for a long term supply agreement of 2 million tonnes per annum of potash. RCF said Encanto Potash Corp has offered a discount of 8 per cent on ruling market rate of muriate of potash (MoP) to India during the preliminary talks held in December, 2012.

India imports around 6 million tonnes of potash annually. "A proposal has been received from one such potash developer Encanto Potash, Vancouver, Canada offering approximately 2 million tonnes of MOP per annum on a long term basis with 8 per cent discount over ruling market price," RCF said in a statement on its website.

Many fertiliser firms have shown interest in a long-term arrangement and have indicated yearly off-take quantities they would be interested in tying up on long term basis at a negotiated price and terms and conditions, it added. "These entities have agreed to form a consortium and collectively negotiate the offer. These consortium members have mandated RCF to lead the consortium," the company said.

The initial proposal in the form of a draft Potash Off-take Agreement (POTA), submitted by Encanto Potash, has been examined by the members of the Indian Consortium. "...preliminary discussions have taken place with Encanto during the visit of an Indian team to Vancouver comprising officials from Department of Fertilisers and representatives of Indian Consortium in December 2012," RCF said.

After the initial talks, Encanto has agreed to review, revise and submit required clarifications and furnish revised draft of POTA for consideration of Indian Consortium, it said. RCF has also invited bids from interested parties for hiring a consultant to work out reasonable long term pricing formula, drafting and finalising back-to-back agreement to be signed by consortium members with RCF, review of revised draft POTA to be submitted by Encanto among other issues.

Encanto is engaged in development of potash properties in the province of Saskatchewan in Canada. RCF produces various grades of complex fertilisers at its two manufacturing units in Maharashtra.