Coromandel International has agreed to acquire 45% equity stake in Senegal-based phosphate rock explorer Baobab Mining and Chemicals (BMCC) for a total consideration of $19.6m.

The Indian agri solutions provider will acquire the stake through its wholly owned subsidiary Parry Chemicals, and will make a loan infusion of additional $9.7m into BMCC.

The acquisition is anticipated to close in the second quarter of the financial year 2022-23, subject to satisfactory completion of conditions precedent.

Coromandel International executive vice chairman Arun Alagappan said: “As part of the Hon’ble Prime Minister’s ‘Atmanirbhar Bharat’ vision, India is working towards achieving self-sufficiency in Phosphatic fertiliser production.

“Given the high dependence on rock phosphate imports, which is a key raw material for manufacturing Phosphoric acid, the proposed investment will be a step towards achieving long term sustainability and supply security goals for meeting country’s fertiliser needs.

“Coromandel is committed towards achieving the Government’s self-sufficiency vision and has been strengthening its Phosphoric acid capacities by augmenting its captive production and leveraging its overseas partnerships in Tunisia and South Africa.

Coromandel is a manufacturer and marketer of phosphatic fertilisers, along with crop protection, bio products, speciality nutrients, organic fertilisers and retail products.

Rock Phosphate is a crucial raw material in manufacturing of phosphoric acid, which is an intermediate in the manufacturing of phosphatic fertiliser.

BMCC is engaged in mining, production, and sale of rock phosphate, and has stabilised its operations and commenced active production from 2021.

Coromandel has been evaluating opportunities in the phosphate mining to address its rock phosphate needs, and has approved the purchase of 45% equity stake in BMCC.

The company claimed that its investment in BMCC will strengthen its backward integration and facilitate long term supply security of the raw material.

BMCC is said to address up to one-third of Coromandel’s rock phosphate requirement.

Alagappan added: “The investment in Senegal is in line with the Company’s long-term strategic objective of strengthening its sourcing capabilities to deliver superior value to all its stakeholders.

“I would like to thank the Government of India for its continuous guidance and encouragement towards establishing backward linkages for key raw materials for fertilisers.

“This investment will play a crucial role in building our nation’s supply security for Phosphatic fertilisers and improve the balanced nutrition and productivity for the farming community.”