Brazil's Vale SA is in negotiations with various investors to sell its suspended Rio Colorado potash mine in Argentina and a deal could be sealed by October, Argentine Mining Secretary Jorge Mayoral said in an interview on Tuesday.

Vale halted operations at the fertilizer project in 2012 after failing to get tax concessions from the Argentine government. The company had asked for the breaks as global potash prices dropped, to help ease soaring costs it attributed to high inflation and the controlled exchange rate in Argentina.

"We believe that if negotiations continue like this, we will have news before October," Mayoral said.

Vale, the world's second-largest mining company, has completed 45 percent of the Rio Colorado project and invested some $2.2 billion. The miner declined to comment on the secretary's comments.

"We have been with groups of Chinese investors who showed interest in the projects, while the Brazilian operator itself has been talking with investors from Europe," Mayoral said.

Potash is a form of potassium, one of the three main plant nutrients along with nitrogen and phosphorus.

Vale had planned to produce 4.3 million tonnes of potash per year in the second phase of development of the project. Mayoral said the new production goal was lower.

"The project will produce 1.3 million tonnes," the mining secretary said. "The project needs to be re-engineered so in order to put it to work more quickly, it's natural that its initial productive capacity needs to be redimensioned."

Potash is an important fertilizer for Brazil, one of the world's largest agricultural exporters, for farmlands that are poor in nutrients.

The Rio Colorado project is made up of a potash mine, 800 km (500 miles) of new and upgraded railway and a potash-loading terminal at Bahia Blanca, southwest of Buenos Aires.