Petrochemical firm seeks second strategic investment in potassium salt resources
Oil and petrochemicals distributor Sinochem Corp is in talks with State Development & Investment Corp (SDIC) to invest in the mainland's largest potassium sulphate mining project in the Luobubo desert of Xinjiang autonomous region.
If successful, it would be the second strategic investment by Sinochem, parent of Hong Kong-listed Sinofert Holdings, in the mainland's potassium salt resources for which demand outstrips supply.
It will also help Sinofert Holdings foster more ties with key suppliers of potassium salts, a fertiliser for which domestic output can only meet 25 per cent of demand.
Sinochem last year bought an effective 26.13 per cent stake in mainland-listed Qinghai Salt Lake Potash, the mainland's largest producer of potassium chloride with output of 1.73 million tonnes last year and a fertiliser reserve of 500 million tonnes.
The plan is to inject the stake within three years into Sinofert, the mainland's largest potassium fertiliser distributor with sales of 2.91 million tonnes in this year's first half. Sinofert distributes almost 50 per cent of Qinghai Salt Lake's output to end-users.
'[Sinochem is] in talks with [SDIC] on co-operating on the development of the Luobubo project,' said Sinofert chief executive Du Keping. 'We are attracted by its scale.'