Vale seeks fertilizer partner

decrease font size  Resize text   increase font size       Printer-friendly version of this article Printer-friendly version of this article

Brazilian miner Vale SA expects to more than replace the 4 million tonnes a year of potash it stands to lose from the cancellation of its Rio Colorado project in Argentina as it opens mines in Brazil and Canada, its top executive said on Wednesday.

At least 2 million tonnes a year of potash output is expected from its Carnalita project in Brazil's northeastern state of Sergipe and 3 million to 5 million tonnes a year could be mined from its Kronau project in Canada's Province of Saskatchewan, Chief Executive Officer Murilo Ferreira told reporters on Wednesday.

Vale canceled plans to build the $6 billion Rio Colorado project in Argentina in March on concerns the country's currency-exchange policies made the mine, rail and port project unprofitable and after being denied legal tax breaks. It is now trying to sell shares of its fertilizer unit or stakes in specific fertilizer projects, Ferreria said.

"We are looking for partners in our fertilizer business," he said at an annual holiday lunch with reporters. "But if the partner takes a stake in our fertilizer unit, we don't want someone who is just a financial partner, we want someone who has their own production already."

A decision to move forward with Carnalita could be made as early as the first quarter of 2014, he said. Vale mines potash and nitrates and makes nitrogen-based fertilizers.

On Oct. 9, Reuters reported that the $4 billion Carnalita project could be producing by 2017, citing officials in Sergipe. The mine would be built in two phases: a $2 billion startup to produce 1.2 million tonnes a year and a second $2 billion phase to raise output to 2.4 million tonnes a year, Sergipe officials told Reuters.

Carnalita is one of several potash projects Brazil's government wants to build quickly to ease dependence on fertilizer imports and replace Vale's canceled Argentine potash plans.

Brazil, the world's largest exporter of beef, chicken, soybeans, sugar, ethanol, orange juice and coffee, relies heavily on imported fertilizer to enrich its extensive but often nutrient-weak farmlands. About 90 percent of Brazil's potash needs are imported. Carnalita alone would supply about 15 percent of Brazil's needs.

Vale preferred shares, the company's most-traded class of stock, were up 0.5 percent at 31.89 reais in Sao Paulo, their first gain in seven days.

Mozambique Railway

A decision on a Vale fertilizer partnership would likely have to wait until the it finished a planned sale of half of its 70 percent stake in the Nacala Railway project. The railway links Vale's giant coal project in the Moatize region of Mozambique with an Indian Ocean port.

The railway stake is being sold to help belay the cost of the $4.4 billion, 912-kilometer railway, which will also be used for non-coal general cargo in an attempt to open up the Mozambique interior to large-scale farming, Ferreira said.

In September Vale agreed to sell a majority stake in its VLI SA Brazilian rail and port general cargo unit to Japan's Mitsui Co, Toronto-based Brookfield Asset Management Inc and the FGTS worker compensation fund managed by Brazil's government.

A deal on the railway is expected by mid-2014, he said.

Vale's nickel business is working hard to increase productivity, Ferreira said, with Vale's planned consortium with international metals producer and trader Glencore Xstrata Plc nickel projects in Canada's Sudbury region likely to be signed in the first quarter of 2014.

The so-called non-corporate joint venture will operate Glencore and Vale's operations around Sudbury, a city in the northern part of Ontario, "as a single unit."

This and other efforts to cut nickel mining costs will leave Vale well-placed to deal with the impact of any potential nickel shortages in China because of Indonesia's decision to ban nickel ore exports and force miners to smelt the metal domestically.

"If costs stay low, we won't make as much money, but we are efficient so if costs go up it will help us," he said.

Ferreira also told reporters that Vale's 50-50 "Samarco" Brazilian iron ore joint venture with Australia's BHP Billiton Ltd signed a contract with Nucor Corp, the largest U.S. steelmaker by market value.

Vale has had little success in the past selling iron ore to the United States, whose mills obtain most of their ore from mines on or near the Great Lakes and other waterways that keep transportation costs cheap. Such costs are a major factor in iron ore prices.

Vale has said it hopes the U.S. natural gas and oil boom based on unconventional reserves will help boost the country's energy-intensive industries such as steel, helping Vale gain new customers for its ore, which needs less refining to be brought up to steelmakers' standards.

Prev 1 2 Next All

Buyers Guide

Doyle Equipment Manufacturing Co.
Doyle Equipment Manufacturing prides themselves as being “The King of the Rotary’s” with their Direct Drive Rotary Blend Systems. With numerous setup possibilities and sizes, ranging from a  more...
A.J. Sackett Sons & Company
Sackett Blend Towers feature the H.I.M, High Intensity Mixer, the next generation of blending and coating technology which supports Precision Fertilizer Blending®. Its unique design allows  more...
R&R Manufacturing Inc.
The R&R Minuteman Blend System is the original proven performer. Fast, precise blending with a compact foot print. Significantly lower horsepower requirement. Low inload height with large  more...
Junge Control Inc.
Junge Control Inc. creates state-of-the-art product blending and measuring solutions that allow you to totally maximize operating efficiency with amazing accuracy and repeatability, superior  more...
Yargus Manufacturing
The flagship blending system for the Layco product line is the fully automated Layco DW System™. The advanced technology of the Layco DW (Declining Weight) system results in a blending  more...
Yargus Manufacturing
The LAYCOTE™ Automated Coating System provides a new level of coating accuracy for a stand-alone coating system or for coating (impregnating) in an automated blending system. The unique  more...
John Deere
The DN345 Drawn Dry Spreader can carry more than 12 tons of fertilizer and 17.5 tons of lime. Designed to operate at field speeds up to 20 MPH with full loads and the G4 spreader uniformly  more...
Force Unlimited
The Pro-Force is a multi-purpose spreader with a wider apron and steeper sides. Our Pro-Force has the most aggressive 30” spinner on the market, and is capable of spreading higher rates of  more...
BBI Spreaders
MagnaSpread 2 & MagnaSpread 3 — With BBI’s patented multi-bin technology, these spreaders operate multiple hoppers guided by independent, variable-rate technology. These models are built on  more...

Comments (0) Leave a comment 

e-Mail (required)


characters left

LPV Seed Treater

The LPV Seed Treater has set a new standard boasting three configurable weighing methods for any-sized operation, a standard 42” ... Read More

View all Products in this segment

View All Buyers Guides

Feedback Form
Feedback Form