gutnicks legend wins agrmnt to sell fertilizr

http://www.bloomberg.com/apps/news?pid=20601081&sid=ancu_v_jvei0


Gutnick's Legend Wins Agreement to Sell Fertilizer to India



By Madelene Pearson

May 5 (Bloomberg) -- Legend International Holdings Inc., controlled by mining entrepreneur Joseph Gutnick and backed by Atticus Capital Holdings LLC, agreed to sell India fertilizer worth $1 billion a year, shoring up supplies for the nation.

Legend may supply at least 3 million metric tons of phosphate rock a year from its planned project in Australia to the Indian Farmers Fertilizer Cooperative Ltd., Gutnick said in an interview. Legend and IFFCO are also in talks to fund the development, estimated to cost $826.6 million, he said.

The project may tap rising demand for crop nutrients in developing countries as they lift food and fiber consumption. India's fertilizer imports tripled in the four years to March 31, 2007, and China, which exports fertilizer to India, last month raised export taxes to meet domestic demand.

``The fact that we have an end buyer is half the battle, if not more than half the battle,'' Gutnick, 55, said in an interview at the company's Melbourne headquarters. ``I've traveled to Asia to a number of countries, there is a shortage and there is a real need for fertilizers.''

Legend rose 82 cents, or 27 percent, to $3.92 in New York on May 2 in Over-the-Counter Bulletin Board trading. It has more than tripled this year.

Gutnick is the company's largest shareholder with 47 percent of Legend stock. Atticus, a New York-based hedge fund holds 12 percent of the company. Legend got the rights to the project from the government of Australia's Queensland state last year.

China, India

Food needs in China and India will boost sales of crop nutrients for years to come, Potash Corp. of Saskatchewan Inc., the world's largest fertilizer maker, said in February. South Asia, which includes India, Pakistan, Bangladesh and Sri Lanka, was the biggest importer of phosphate rock in 2006, according to the International Fertilizer Industry Association.

Indian Farmers Fertilizer Cooperative, known as IFFCO, says it's the country's largest producer of fertilizer from its five plants as of March 31, 2007, according to its Web site. The Delhi-based group has 50 million farmer members, Gutnick said.

IFFCO may pay for some or all of the development cost in return for a stake in the plant or the company, Gutnick said.

The price IFFCO will pay will be linked to international prices and is still being negotiated, he said. Based on today's price the deal is worth about $1 billion, he said. Phosphate rock is used to make crop nutrients.

Production Target

``We are assured of a good price in good times and bad,'' Gutnick said. ``It's a significant step forward.''

The project will have output of 5 million tons a year and includes a mine, a plant and pipeline to the port of Karumba in northern Queensland, for export. Production is scheduled to begin at the end of 2009, with a six-month contingency timeframe, Gutnick said. He is ``very confident'' it will go ahead.

Gutnick was once a prominent gold miner in Australia. He was the founder of Great Central Mines Ltd., previously the nation's second-largest gold company. The mine is now owned by Newmont Mining Corp.

China, which exports phosphate rock and urea to India, raised export taxes on fertilizers to as much as 135 percent last month. The increases, which will boost the tariff range from 0 percent to 35 percent, to 100 percent to 135 percent, will apply from April 20 to Sept. 30, the Ministry of Finance said last month.

To contact the reporter on this story: Madelene Pearson in Melbourne on [email protected]
Last Updated: May 5, 2008 06:01 EDT