India may send team to inspect Belaruskali assets within a month

India is likely to send a team of technical experts to Belarus to inspect the assets of state-owned JSC Belaruskali, in which India is interested in acquiring a stake, a fertilizer ministry official said.

The team could leave within a month, the official said, requesting anonymity. The visit, when it happens, would follow a visit by a six-member Indian delegation to Belarus to initiate talks on the possibility of a stake purchase.

The delegation was led by Sanjay Singh, secretary (east) in the external affairs ministry, and also included fertilizer secretary Sutanu Behuria and an official each from the finance and commerce ministries. P.S. Gahlaut, managing director, Indian Potash Ltd, and Manish Gupta, director, strategy and joint ventures, Indian Farmers Fertiliser Cooperative Ltd (Iffco), were also part of the delegation.

One of the officials who was a part of the delegation said that while the talks were positive, “it appeared that the Belarusians were divided among themselves on the issue of stake sale.” This official also said that the Belarusians had made it clear that even if they decide to sell the stake, it will not exceed 20%. “They were not willing to climb down from the $30 billion (Rs.1.38 trillion) valuation they had made for the company,” he said, but declined to be named.

A 20% stake, at a valuation of $30 billion, would come for around $6 billion. The first fertilizer ministry official, however, said Belarus was keen on entering an agreement with India for the long-term supply of potash. “We could perhaps settle for a five-seven-year agreement for an annual supply of 1.2 million tonnes (mt) of potash, even if the stake buy does not happen,” this official said.

Mint had first reported on 10 August that India was interested in acquiring a 20-25% stake in the potash maker.

Fertilizer secretary Behuria said talks between the the two nations were preliminary.

Manoj Kumar Bharti, India’s ambassador to Belarus, declined to comment. Vladimir Goshin, the Belarusian ambassador to India, too, declined to comment.

On 29 August, the Russia and India Report said Belarus was “planning to refuse a loan of $2 billion, which Russia is offering using a 35% stake in Belaruskali as collateral”.

Russia’s largest bank OAO Sberbank on 5 August said it acquired a 35% stake in Belaruskali as collateral for a $2 billion loan to Belarus along with Deutsche Bank AG. “Sources say that Alexander Lukashenko received a much more favourable offer from India. But experts think Russia will still get a stake in Belaruskali, and that Lukashenko is just using this asset as a lever to put pressure on Moscow during negotiations on energy resources,” the article in the Russia and India Report said.

Lukashenko is the President of Belarus. The Russia and India Report is produced by the government-owned Russian daily Rossiyskaya Gazeta.

On the same day, Reuters said Belarus wanted Sberbank to ease conditions on the $2 billion loan. “We are now working on changing the conditions, including the right to repay it ahead of schedule... We think that this loan may be secured on export contracts,” Belarusian Prime Minister Mikhail Myasnikovich was cited as saying by local news agencies, Reuters said.

Mint could not independently confirm these reports.

The decision to open negotiations with Belarus followed a 10 August meeting chaired by Prime Minister Manmohan Singh called at the behest of Union agriculture minister Sharad Pawar. It was decided then to set up a committee of secretaries to examine the possibility of acquiring mining and energy assets abroad, Mint reported on 20 August.