DJ Brazil's Vale Voices Optimism on Rio Colorado Potash Project
BUENOS AIRES, Jun 04, 2012 (Dow Jones Commodities News via Comtex) --
By Ken Parks
Brazilian mining company Vale SA (VALE, VALE5.BR) is optimistic it will be able to move ahead with development of a multibillion-dollar potash mine in Argentina's Mendoza Province, according to a top executive.
Vale's board already has approved a 5.9 billion budget for the Rio Colorado project, but the Brazilian company is evaluating the project's feasibility amid high inflation in Argentina.
"We have maintained contact with the Argentine government, which is aware of the obstacles surrounding the project. We are confident that we can overcome the difficulties of the project," said Roger Downey, the head of Vale's coal and fertilizers division, in an emailed statement.
Vale directors said in April that Rio Colorado, along with Vale's Taquari-Vassouras and Carnalita projects in Brazil, are fundamental to the company's plans to eventually lift its potash production to 7 million metric tons a year, from around 600,000 tons a year at present.
Argentina has become an increasingly difficult place for mining companies to do business in recent months.
Starting in October, mining companies were forced to exchange all of the proceeds from their export sales on Argentina's foreign-exchange market. Miners were previously exempt from foreign-exchange restrictions.
Meanwhile, government import restrictions that went into effect in February have led to long delays for bringing badly needed mining equipment and materials into the country.
-Write to Ken Parks at firstname.lastname@example.org and Jeff Fick at email@example.com
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