gutnick and indian co op deal

Gutnick phosphate operation to fertilise Indian economy
Andrew Fraser | July 18, 2008

FORMER diamond tsar Joe Gutnick has teamed up with India's largest fertiliser supplier and investment icon George Soros in a proposed phosphate operation in northwest Queensland.

Under a deal announced yesterday in Brisbane, the Indian Farmers Fertiliser Cooperative, or IFFCO, will inject slightly over $100 million into Mr Gutnick's plan to ship phosphate from the company's four holdings around Mt Isa.

Reserves total a billion tonnes.

Mr Gutnick, the chief executive of US-listed Legend International, yesterday revealed that George Soros' Soros Fund Management had invested $20 million in the project and that US hedge fund managers Atticus Management had taken a stake.

Yesterday Mr Gutnick was keen to talk up the virtues of the Indian deal, under which IFFCO managing director Udai Shanker Awasthi will take a position on the board, while IFFCO is also entitled to appoint another board member.

Dr Awasthi said India had a growing need for fertiliser, and the project should be able to supply 5 million tonnes of rock phosphate annually.

There were existing plans to export rock phosphate that could be manufactured into fertiliser, but Mr Gutnick said that there was the possibility of diversification as more investors came on board.

He said that at this stage the plan was to export the phosphate from the port of Karumba at the bottom of the Gulf of Carpentaria, but the company was still looking at "other transports which involve other ports".

The phosphate deposits in the northwest of Queensland have been known since the 1970s, and a pilot plant was built in 1974.

But the project has only recently become viable because of a lift in phosphate prices. Last year world prices hovered around $US50 a tonne, the level it had been at for most of the past 30 years. Since then, decisions by the US and China not to export phosphate rock have pushed prices up to $US300 a tonne, with spot prices up to $US400.

Under the deal with IFFCO, 80 per cent of the output of the project will go to India, with Legend being able to sell the rest on the spot market.

http://www.theaustralian.news.com.au/story/0,25197,24036986-643,00.html