By Lucy Kassa
Israel Chemicals Limited (ICL) has fully acquired Allana Potash Corporation, the parent company of Allana Potash.
The 150 million dollar sale followed approval by Allana's shareholders as well as Ontario's Supreme Court on June 22, 2015, according to ICL's Country Manager, Yoseph Enyew.
Allana, a junior mining company listed on the Toronto Stock Exchange was sold after a public bid offered to its shareholders in 2014 and its sale was accepted by 90 pc of them. But Canadian law dictates that the full transfer of any public listed company should be approved by a court.
Farhad Abasov, President and CEO of Allana Corporation said after the shareholder's approval of the transfer, that the company was sold due to the financial challenges it faced "just like other junior mining companies".
Taking a mining concession for 20 years at Danakil in the Afar Regional State on 310sqm of land, Allana, accomplished its exploration activities in 2013. Based on the feasibility study the company conducted, there could be 25 million tonnes of potash in the area.
The full mining capacity of ICL is one million tonnes of potash and half a million tonnes of phosphate annually. ICL plans to do more exploration and feasibility study on the reserves at the site, the country manager disclosed.
ICL is a global manufacturer of products that service the agricultural sector. Having subsidiary companies in 40 countries, the company has around 12,500 employees worldwide and its sales in 2014 totaled 6.1 billion dollars.
Once it starts mining ICL targets markets in Latin America, India and China, with expected annual revenue of 400 million dollars to 500 million dollars. The company decided to purchase Allana after looking at the current high potash reserves in the area and foreseeing the growing fertilizer markets in Ethiopia as well as other African countries, Yoseph said.
Despite the default transfer of Allana Potash to ICL following the sale of the parent company, an approval of the sale has to be given by Ministry of Mines (MoM) in Ethiopia and thereafter the transfer of Allana's licence to ICL.
The procedure for acknowledgement of the transfer should be requested initially by the transferred company itself and then the buyer of the company should present the application documents, including all the requirements for becoming the new licensee.
"We have not yet received a request for a mining licence transfer by Allana Potash," Kaleb Gebreyes, senior geologist at the mining licensing department of MoM told Fortune.
Once a mining licence is transferred to another company, the new company will be limited to the conditions of the original licence; if it wants to extend the time as well as expand the territory of exploration, it should obtain a separate licence, Kaleb noted.
Source: AllAfrica
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