Italian-Thai Development Plc (ITD) plans to earmark 12 billion baht to develop a potash mine immediately if it receives approval in the face of opposition from environmental groups.
The company acquired a potash mining concession and business in Udon Thani from Asia Pacific Potash Corporation (APPC) last year. It has not been able to not start mining because of opposition from conservation groups and non-governmental organisations.
It has embarked on a large public relations programme to ease opposition, and capitalise on the booming potash market. Visuth Jirathiyut, managing director of APPC, said opposition had prevented the mine's former Canadian owners from starting production despite having held a concession since 2001.
He said potash had been in great demand, particularly in the United States, Brazil, China, India and Asean where the consumption of chemical fertilisers has increased continuously.
While annual demand for potash in Asia is as high as 18-20 million tonnes, only three million tonnes could be produced from sources in China, the Middle East, Canada, Russia and Germany.
The benchmark price of potash set in Vancouver, Canada has risen gradually, from an average of US$161 a tonne in 2005, $174 last year and $180 so far this year. Consumption is expected to grow 3% annually from 2006 to 2011.
ITD expected it would produce around 45 million tonnes of potash in the remaining 22 years of the concession.
The company plans to produce one million tonnes of potash annually in an initial period and to increase production to two million tonnes in the fifth year of operation. Around 12 billion baht would be set aside to support production.
Thailand imports between 400,000 and 455,000 tonnes of potash worth 3-4 billion baht each year for chemical fertiliser production.
Should it manage to weather the opposition by environmentalists and NGOs, he believed, other mines now in the exploration stages in Sakon Nakhon, Khon Kaen, Nakhon Ratchasima, and Maha Sarakham could start production without resistance.
He expressed confidence that Thailand would become a potash production base in Asia because production sources in the country are high quality. He said the company hoped the new government would support and promote the project.
Shares of ITD closed yesterday on the SET at 6.85 baht, up 50 satang, in trade worth 139.21 million baht