Anglo American studies increasing Brazil phosphate output

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Brazil's growing fertilizer demand has prompted global miner Anglo American to study producing more phosphate in the country, the head of the miner's local fertilizer division said.

Brazil, an agricultural superpower expected to take on a growing share of the world's food production in coming years, imports some 50 percent of its phosphate, a key ingredient used to produce fertilizer.

"The (phosphate) reserves we have in Goias are large enough to make expansion viable," said Ruben Fernandes, head of Anglo's niobium and phosphate unit in Brazil said in an interview. "The study will focus on rates of return and the size of the offer will depend on this."

Anglo American, one of the largest phosphate producers in Brazil, will not disclose investment expectations in the project until the studies are completed next year, he said. Its local phosphate operations are based in the center-west state of Goias.

The company expects to produce 1.4 million tonnes of phosphate rock in 2013, up 8 percent from the previous year as Brazil gears up for what could be new record soybean and corn crops.

Brazil's fertilizer demand is growing by around 5 percent a year, compared with 3 percent in the rest of the world, according to Fernandes. Brazil is the world's No. 4 fertilizer consumer, behind the United States, India and China.

Anglo isn't the only company trying to raise its fertilizer production in Brazil. Toronto-listed start-up Verde Potash Plc plans to start mining potash at its flagship project in southeastern Brazil in 2015.

Brazilian miner Vale will likely reopen development of potash mines in Brazil and Canada that it had put on hold, after it suspended its $6 billion Rio Colorado project in Argentina.

Fernandes said fertilizer sales in Brazil rose in the first quarter of 2013 from a year earlier as farmers prepared to plant their largest-ever corn crop.

Sales slowed in the second quarter, however, reflecting caution ahead of soybean planting, he said.

"The market is a bit anxious, slow, very much due to what is happening abroad because that affects prices," he said.

In May, India's government reduced subsidies for phosphate and potash-based fertilizers for the fiscal year that began in April, easing demand and lowering international prices.

Even so, Fernandes said he expects record overall fertilizer sales of 30 million tonnes in 2013.

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