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Published 17 May 2012 05:00, Updated 17 May 2012 09:27
“Diamond Joe” Gutnick has plenty on his agenda this year. His Merlin diamond deposit in the Northern Territory, held by ASX-listed North Australian Diamonds, is coming close to production. He and his sister are merging their precious gem assets. And he is preparing for the listing of Paradise Phosphate on the ASX, a project near Mount Isa in north-west Queensland.
Paradise is a subsidiary of Legend International Holdings, which is traded on the United States over-the-counter Bulletin Board. It is planning to process 1 million tonnes of phosphate rock a year for 60 years.
Gutnick has already established strategic alliances with international fertiliser firms from India and China, such as IFFCO and Wengfu Group. The attractiveness of the investment has been assisted by the fact that the biggest phosphate-producing region is in the Middle East, and is facing difficulties due to political unrest.
The roughly $1 billion price tag for fertiliser processing equipment is a concern for investors but Gutnick is no stranger to overcoming obstacles.
He rebuilt his resources empire after the collapse of his nickel venture, Centaur Mining & Exploration in 2001.
Phosphate is a key ingredient in fertiliser. As demand for food continues to grow with the global population, there is a greater need for increasing crop yields. This has made the fertiliser industry more attractive, as evidenced by BHP Billiton’s interest in PotashCorp, a Canadian fertiliser company. In 2010, BHP’s $US40 billion hostile bid for PotashCorp was ultimately rejected by Canada’s federal government, as it was deemed unlikely to provide a net benefit to the country.