The Indian Farmers Fertiliser Cooperative Limited (IFFCO) has signed an agreement with Australia's Legend International Holdings, Inc. for Rock Phosphate valued at $100 million. Under the deal, rock phosphate would be supplied from Queensland's Georgina Basin to IFFCO in India.

The deal was signed at Legend's corporate office at Melbourne by Dr U S Awasthi, managing director of IFFCO, Joseph Gutnick, chairman, president and CEO of Legend International Holdings, Inc. IFFCO has five fertiliser plants in India and represents 50 million farmers.

IFFCO will provide technical, logistic and financial support and facilitation to Legend International Holdings, in the development of its phosphate mining operations and shipment of its product to India.

It will also purchase 15 million shares in Legend International Holdings, and also receive options for another 30 million shares to be acquired, in a phased manner, which will be utilised to fund capital expenditure related to the project. Dr US Awasthi has joined Legend International's board as a director, and IFFCO has the option of appointing another board member as well.

India had a growing need for fertiliser, and Dr Awasthi said that the project would be able to supply 5 million tonnes of rock phosphate annually. As part of the deal, 80 per cent of the project output would go to India, and Legend being able to sell the rest on the spot market.

IFFCO will invest just over $100 million into Gutnick's plan to ship phosphate from the company's four holdings around Mt Isa. Gutnick also revealed that George Soros' Soros Fund Management had invested $20 million in the project, and that US hedge fund manager Atticus Management had also taken a stake.

Phosphate deposits in the Northwest of Queensland have been known since the 1970s, with a pilot plant having been built in 1974. However, the project became viable only now on account of better phosphate prices. Last year's global prices were around the 30-year average of $50 per tonne, but since then the US and China have decided not to export phosphate rock, pushing up global prices to around $300 per tonne (US), and spot prices going as high as $400 a tonne.

Taking to the media, Dr Awasthi said that ''considering its strong commitment to the farming community and its farmer-members, IFFCO continues to look for opportunities to enhance fertiliser availability and has inked the agreement with M/s Legend International Holdings Inc. Australia with this objective.''

''We are delighted to work with Mr. Joseph Gutnick and Legend to establish a significant fertilizer and resource company in Australia.''

Joseph Gutnick said ''It's a great honour and privilege for me to welcome Dr Awasthi to join the Board of Legend International Holdings, Inc. I look forward to his direction and guidance in ensuring the success of the Phosphate project.''

The tie up with Legend will effectively ensure that IFFCO's Paradeep unit operates at full capacity or higher without any raw materials constraints.