India is keen on the possibility of setting up a fertilizer plant in Algeria -- a joint venture to tap the rich resources of phosphate possessed by the North African country.
Talks had been underway, between India and Algeria, on the modalities of setting up of the fertilizer plant. On Wednesday, with the intention of giving the process a political push, Minister of State for fertilisers and chemicals Mansukh L. Mandaviya held discussions with the Algerian Industry Minister Abdessalem Bouchouareb.
Algeria is estimated to have a phosphate reserve of around five billion tones, and it is keen that India harvest it as part of a joint venture. The Indian share in the project is proposed to be 49 per cent.
Today’s talks are a major step in concretising the proposal of setting up of the company as a joint venture. Now, India has to come up with a proposal on the composition of the Indian plant – details of the financiers, demarcation of responsibilities and the company which will provide the engineering expertise.
Mandaviya was accompanying Vice President Hamid Ansari on a two-day visit to Algeria, and a major thrust of the visit is to firm up India’s cooperation with the north African nation in the fields of hydrocarbons and fertilizers.
India is keen on obtaining a share in the phosphate reserve, as it will help in bringing down the import bill of phosphates, with the country importing more than 96 per cent of its requirement. Officials say that it will also help in lightening the subsidy burden on fertilizers.
Secretary (West) in the Ministry of External Affairs, Sujata Mehta, said India was looking forward to explore cooperation with Algeria in new areas like in fertilisers, pharmaceuticals, space and information technology.
The phosphate reserve is estimated to be more than five billion tonnes, and India’s investment in the project is likely to be in the range of USD five to seven billion.
Indian Ambassador to Algeria, Satbir Singh, said that the Indian involvement will be a combined effort of both government and private sectors. “Around 90-95 per cent phosphate being used by Indian fertiliser companies is imported and the production cost is also very high. If India can join hands with Algeria by providing funds and technology to set up a fertiliser company by using Algerian phosphate and gas, and the fertiliser is taken to India, the cost would be quite low,” he said.
The subsidy burden of the government for fertilisers, which is Rs 86,000 crore to Rs 90,000 crore per annum, will also come down, he said.
The Indian fertiliser industry produces about 12.28 million MT of nitrogen and 4.37 million MT of phosphatic nutrient production. India ranks second in the production of nitrogenous fertilizers and third in phosphatic fertilizers. According to a report by Department of Fertilisers, by the year 2016-17, fertilizer demand in the country is projected to increase to about 336.77 lakh tons of urea, 124.13 lakh tons of DAP, 59.48 lakh tons of SSP and 47.93 lakh tons of MOP.
Bilateral trade between India and Algeria stood at 1.5 billion per annum, a large chunk of which was related to the import of oil and oil products to India.
India exports automobile, auto components, buffalo meat and garments to Algeria.