FERTILIZER: Brazil May Seize Fertilizer Deposits as Prices Surge
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By Carlos Caminada and Jessica Brice
June 24 (Bloomberg) -- Brazil may take control of some fertilizer mineral deposits that aren't being fully developed in a bid to reduce the nation's dependence on imports as prices soar.
The government may consider taking over resources and revoking licenses unless companies step up investments and boost output, Agriculture Minister Reinhold Stephanes told reporters today at the BM&F futures exchange in Sao Paulo.
``We have enough phosphate mines to supply the market and export, but the companies that dominate the sector are not investing enough,'' he said during a speech. ``If needed, the government will step in.''
Brazil, which imports about 75 percent of its fertilizer now, aims to produce enough potassium, phosphate and nitrogen to meet domestic demand in five to 10 years, Stephanes said.
Cia. Vale do Rio Doce operates Brazil's only potassium mine and is investing to explore a second deposit, though the combined projects could only supply about 20 percent of domestic demand, he said. The government is working to clear environmental hurdles to let Petroleo Brasileiro SA tap Brazil's biggest potassium deposit in the Amazon, Stephanes said.
Bunge, Cargill
Stephanes said he has met with Bunge Ltd., Cargill Inc. and other fertilizer producers to push to increase spending. Bunge executives met with government officials yesterday to present a plan to boost output from deposits the company controls, he said. Stephanes expects other companies to do the same.
``If they are just sitting on it, they'll lose it even if we have to change the Constitution,'' he told reporters. ``We need to have an aggressive policy on this.''
Bunge said last month it would invest 3.2 billion reais ($2 billion) to expand two existing mines and a manufacturing plant and develop three new mines in the South American country. The investment will add about 1.2 million metric tons of phosphate output capacity a year.
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