State Firm Digs Deep to Buy Jordan Mine

A unit of holding company State Development & Investment Corp. Ltd. will buy out the stake in a Jordanian potash mining operation held by Canada’s Nutrien Ltd. for $502 million, becoming the latest investment under Beijing’s call for Chinese companies to expand into emerging markets.

Under the deal, SDIC Mining will take over the roughly 23.3 million shares in Arab Potash Co. PLC held by fertilizer specialist Nutrien, accounting for about 28% of the venture’s shares, according to an announcement on SDIC’s website on Monday. The deal will make SDIC Mining the venture’s largest shareholder, it said.

Arab Potash is the world’s eighth largest manufacturer of potash, commonly used in production of fertilizers, and the largest producer in Jordan. It produced 2.32 million tons of potassium chloride last year, and sold most of that to China, India, Malaysia and Jordan.

The announcement comes amid a broader wave of similar investments by Chinese companies under Beijing’s Belt and Road Initiative, which originally targeted infrastructure-related projects in countries along the ancient maritime and land-based Silk Roads connecting China and Europe. More recently the program has come to encompass investments by Chinese companies in infrastructure, manufacturing and other resources in developing countries, as Beijing seeks to export such capabilities to offset a slowdown in similar activity at home.

Resources were one of China’s earliest areas for overseas investment, as it sought to secure supplies of commodities like iron ore and oil in the 1990s and first decade of the 21st century to feed its rapidly growing economy. That spending has cooled somewhat in recent years as commodity prices have sagged and China’s own economic growth has slowed.

Australian mining giant Rio Tinto Group set up a China joint venture in 2011 with another state-owned mining giant, Aluminum Corporation of China Ltd., with potash development as one of its goals. But the parties later decided to terminate the project after seeing little progress.

The Jordan investment is the latest under Belt and Road for SDIC. Two years ago the company launched a 2.2 billion yuan ($323 million) cement-making venture in Indonesia. At the time, it said it would also explore other potential projects in the country, including nickel ore mines, power plants and ports.

Contact reporter Yang Ge (geyang@caixin.com)