Spend $12 Billion "to boost its annual potash output to 10.6 million tons from 750,000 tons now, a Vale press official said today, declining to be named citing company policy. Phosphate production may climb to 12.8 million tons a year from 8.8 million, the official said.
Vale said on Aug. 6 it may combine Brazilian fertilizer assets and sell shares in the new unit as early as this year.
Brazil's Vale to Spend $12 Billion to Become World's Top Potash Producer
By Juan Pablo Spinetto - Aug 27, 2010 6:57 PM GMT+0100
Vale SA said it will invest $12 billion by 2014 to become the world’s second-largest phosphate and potash producer amid rising demand for the nutrient used to promote crop growth.
Vale, the world’s largest iron-ore producer, plans to boost its annual potash output to 10.6 million tons from 750,000 tons now, a Vale press official said today, declining to be named citing company policy. Phosphate production may climb to 12.8 million tons a year from 8.8 million, the official said.
Demand for fertilizers is expected to rise as population growth increases the need for food from China to Brazil. BHP Billiton Ltd., the biggest mining company, last week made a hostile $40 billion offer for Potash Corp. of Saskatchewan Inc., betting on growing fertilizer demand. Potash Corp. is the world’s largest producer of the soil nutrient by output.
Vale said on Aug. 6 it may combine Brazilian fertilizer assets and sell shares in the new unit as early as this year.
In January, Vale agreed to purchase assets including phosphate mines from Bunge Ltd. for $3.8 billion to help meet demand for crop nutrients in Brazil. Chief Executive Officer Roger Agnelli aims to make Vale “a new global leader in the fertilizer industry,” he said then.
Rail Concession
Vale said late yesterday that it signed a rail concession with Ferrosur Roca SA for a 756-kilometer (470-mile) stretch of railway to transport potash from its Rio Colorado mine in Argentina. The project has an initial estimated capacity of producing 2.4 million metric tons per year of potash, with the potential to expand to 4.35 million, Vale said.
Potash is a crop nutrient that improves the ability of grains like wheat or corn to withstand dry soil.
Vale rose 2.3 percent to 41.65 reais as of 2:56 p.m. in Sao Paulo trading. The stock has gained 25 percent in the past year, while the benchmark Bovespa index has dropped 5.1 percent.
To contact the reporter on this story: Juan Pablo Spinetto in London at jspinetto@bloomberg.net |
