Italian-Thai Develop-ment (ITD) plans to spend Bt20 billion to mine potash in Udon Thani after taking over the Thai-Canadian joint venture that holds the concessions, its president revealed yesterday.

Premchai Karnasutha told reporters ITD recently bought Asia Pacific Resources and its Thai unit Asia Pacific Potash Corporation (APPC) for US$80 million.

APPC has a potash mine in Udon Thani, the northeastern province that is believed to have major reserves of the ore used to make chemical fertiliser.

Premchai said ITD had renamed the project Sin Rae Thai Co Ltd and injected Bt3 billion in registered capital into the newly acquired mining company. The Thai government will continue to hold a 10-per-cent stake.

The company is waiting for its mining licence to win approval from the government. Premchai said the company should be granted the licence in one year. Once it had a licence, the company would seek financing to begin mining, he said.

Premchai said the firm should be able to supply products a year after opening the mine. He said the company would sell the potash to markets such as Canada and China where demand for the ore is strong.

The acquisition of APR is part of ITD's plan to diversify its income from construction to mineral resources.

Premchai said although ITD currently has Bt120-billion worth of construction projects, Bt50 billion of which earmarked for this year, most construction contracts last only two years. Income from a mine lasted longer and was more stable, he said.

APR, which holds two concessions to mine in Udon Thani through Asia Pacific Potash Corp (APPC), was a Canadian-registered firm. APR controlled 90 per cent of APPC and the Thai government 10 per cent.

The Ziff family, through Caymen-Islands registered Olympus Capital Holdings Asia, held about 47 per cent of APR. APR's board approved a takeover bid from ITD made through SRMT Holdings, a subsidiary ITD set up in Canada,.

Premchai said if the mining licence was granted this year the company should be able to supply potash before Asean Potash Mining. The latter is a massive project in Chaiyaphum province backed by members of Asean. It has been marred by a political scandal that erupted over alleged links between its chief and the Thai Rak Thai Party.

The mining project in Udon Thani has met intense opposition from local villagers and conservationists. Speculation that the Canadian firm would pull out has been widespread.

When asked about the opposition from villagers and environmentalists, Premchai shrugged it off, saying: "I'm an NGO, too."

Premchai made his comments while leading a group of reporters to a new cement plant in Saraburi. ITD owns 100 per cent of the newly opened Thai Pride Cement Co Ltd. The cement plant has Bt1.2 billion in registered capital.

ITD plans to issue US$200 million (Bt7.52 billion) of dollar-denominated bonds to raise funds for expansion. It plans to invest Bt2.7 billion more in the cement plant, which is part of its strategy to diversify from construction to minerals and raw materials.

Watcharapong Thongrung

The Nation

Saraburi