Chinese mining giant in deal to acquire 49% stake in potash mines
Reports indicate that SDIC Mining Investment and Italian-Thai Development are close to striking US$400 million deal
After significant delays, the government is pushing forward with the Potash Mining Project in Thailand’s Northeastern region. In the latest development, Italian-Thai Development PCL (ITD), which holds a 90% share in Asia Pacific Potash Corporation Limited, is understood to be negotiating with a Chinese company to sell shares in its project.
Asia Pacific Potash Corporation Limited was granted mining licenses for underground potash mining in Udon Thani province on September 23, 2022, by the Department of Primary Industries and Mines (DPIM). The company received licenses for four plots totalling 25,446 rai, with a validity period of 25 years.
International news agencies report that SDIC Mining Investment Co., Ltd. is in advanced negotiations to acquire a 49% stake in Asia Pacific Potash Corporation Limited.
This agreement is expected to be valued at least 400 million dollars, and an announcement of the deal's completion may be made within the next few weeks. However, there is currently no clear summary of the agreement, and it's possible that negotiations may not yield a result.
ITD and Asia Pacific Potash Corporation Limited, as well as SDIC Mining Investment, have yet to confirm or deny these reports.
ITD acquired the majority shares in Asia Pacific Potash Corporation in 2006, gaining rights to explore and develop a high-quality potash reserve in Udon Thani province, with a production potential of 2 million tons per year.
SDIC Mining is an investment company in non-coal mining and related industries, a subsidiary of SDIC, China's largest state-owned investment holding company.
Aditad Vasinonta, director general of the Department of DPIM, stated that the purchase of shares from ITD in this proportion will still leave Thai entrepreneurs holding over 50% of the company, which is in accordance with the Mineral Act. There is no issue prohibiting foreign companies from conducting mining business.
The Foreign Business Act, overseen by the Ministry of Commerce, stipulates that businesses benefiting from natural resources, such as mining ventures, must be Thai legal entities. Foreign entities intending to operate must get approval from the Cabinet, with the Minister of Commerce's endorsement.
"If Thais still hold over 50% of the shares, it's still considered a Thai company because the Mineral Act doesn't prohibit Thai or foreign investors. In this case, there are no issues regarding both the Mineral Act and the Foreign Business Act. Additionally, there are no restrictions on foreign companies conducting surveys." Aditad stated.
