Agriculture solutions company Coromandel International is acquiring an additional 8.82% equity stake in Baobab Mining and Chemicals Corporation (BMCC) for $3.84 million, which will take its overall shareholding in the Senegal-based rock phosphate miner to 53.8%.

Besides the investment, of about ₹32 crore, the Murugappa Group firm will also be infusing $6.5 million loan (₹54 crore) to fund expansion projects and meet working capital requirements.

Eyeing self sufficiency

The fertiliser maker had in September 2022 acquired 45% stake in the Senegalese firm that holds renewable exploitation permit for processing phosphate ore. BMCC, incorporated in 2011, has since stabilised mining operations and currently commissioning fixed processing plant to optimise the rock production. Rock phosphate is a critical raw material for manufacturing Phosphoric Acid, an intermediate used for Phosphatic fertiliser production, Coromandel said in a release on Wednesday.

Coromandel International MD and CEO S.Sankarasubramanian   | Photo Credit: Arrangement

“With India importing majority of its rock requirement, investment in rock phosphate mines will be critical for attaining long term supply security for its phosphate fertiliser production. The Senegal rock is currently being blended at Coromandel’s Visakhapatnam unit along with other rock sources thereby providing us operational flexibility,” Managing Director and CEO S. Sankarasubramanian said.

Over the past two years, Coromandel has taken various initiatives to optimise rock production at BMCC. The increased throughput will support in securing rock phosphate for the upcoming phosphoric acid plant at the company’s Kakinada unit. The additional stake in BMCC is strategically important for capturing value chain and building self-sufficiency in our operations, he said.

Subsidiary Coromandel Chemicals Ltd will be paying $3.84 million for purchase of 44,094 ordinary shares of BMCC from Baobab Fertilizer Africa.