India has shelved its plan to buy 30 per cent stake in Russian fertiliser producer ACRON's USD 2-billion potash mine project due to valuation issues.
In December 2014, the two parties had signed an agreement to buy 30 per cent stake in ACRON's potash mine project.
Potash is a decontrolled fertiliser and government pays fixed subsidy on it.
As per the proposal, India was represented by an NMDC-led consortium of four state-run companies and one cooperative.
The mining giant NMDC was proposed to have 15 per cent stake in the project, the remaining 15 per cent was to be shared among Rashtriya Chemicals and Fertilizers (RCF), FACT, National Fertilizers Ltd and fertiliser cooperative Kribhco.
The project was being undertaken by ACRON's subsidiary Verkhnakamsk Potash Company (VPC) for development of Talitsky Potassium-Magnesium deposit in Perm Krai, Russia.
"The plans to buy stake in the Acron's potash project has been called off, as it is unfeasible because of valuation issues," a source said.
According to sources, the consortium had conducted a feasibility study of the proposal and estimated the 30 per cent stake in the project would cost around Rs 1,000 crore.
India imports 100 per cent of its requirement of potash, which is about four million tonnes (MT).
In 2014-15, potash was imported at an average price of USD 320 per tonne. In the current fiscal so far, the country is estimated to import 3.3 MT of potash.
Mainly used in the form of Muriate of Potash (MoP) by farmer as soil nutrient, Potash is also used in the manufacturing of complex NPK fertilisers.
Russia and Ukraine are two major suppliers of potash to the country.
