Melbourne, Australia – It might seem brave to open a mine in Mt Isa in the current climate, but Joe Gutnick, chief executive of US-based Legend International, says he is on track for a phosphate rock project that will need 1000 employees.
“It will be a new operation starting rather than closing,” Mr Gutnick said. “Our first production, we hope, will be in the third quarter of this year.”
In a deal with the Indian Farmers Fertiliser Cooperative, the rock will be exported to India where it will be processed into fertiliser.
Legend board member and IFFCO chief executive Udai Shanker Awasthi is visiting Australia. He is accompanied by Atul Chaturvedi, the Secretary (Fertiliser) with the Indian Government, who controls a budget of more than $US20billion ($28.6 billion) used to subsidise fertiliser for Indian farmers.
Mr Gutnick said Indian Government subsidies and the IFFCO arrangement made the deal possible.
IFFCO, India’s largest fertiliser co-operative, serves more than 50 million farmers.
Dr Awasthi said fertilisers had been crucial in increasing agricultural production, with India not only self-sufficient but now exporting food. But the growing population meant that food production needed to increase. “Our joining of Legend and the joint venture has been a major step in that direction,” he said.
Mr Chaturvedi said farmers in India had taken “huge steps” in improving their agricultural production. A key factor has been subsidised fertiliser, including phosphate.
The global price of phosphate rock climbed from around $US100 a tonne in December 2007 to $US200 just a month later, running up to just under $US400 in June 2008.
The price fell back sharply in late 2008 but is still reportedly around $US250 a tonne now. In Australian dollar terms, the overall uptrend is more marked because the the currency’s sharp drop in July 2008 against the US greenback.
But in India, “the subsidy means the price of fertiliser is fixed. Indian farmers are protected”, Mr Chaturvedi said.
He said India had avoided the worst of recent food security worries.
Food security “needs fertiliser security”, he said.
Mr Gutnick said Legend’s Queensland deposit in the Georgina Basin has more than a billion tonnes of phosphate rock.
He said the first five million tonnes would be shipped to India. He hoped that by 2012, “IFFCO will also be looking with us to produce fertiliser here.”
Incitec Pivot, Australia’s biggest fertiliser company, mines phosphate near Mt Isa and produces phosphate fertiliser for domestic use and export.