UpdateVale confirms $6bn potash project in Argentina

06 December 2011 23:39  [Source: ICIS news]

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HOUSTON (ICIS)--Vale confirmed on Tuesday that it is building a potash project in Argentina valued at Argentine pesos (Ps) 25.5bn ($6.0bn, €4.5bn).

The project will be in Malargue, Mendoza, according to the Argentine federal ministry of planning, public investment and services. Construction should last 30 months.

By the end of 2014, production should reach 2.1m tonnes/year, Vale said.

The project, called Potasio Rio Colorado, will include a plant that will process potassium chloride and a rail line connecting the project to the port of Bahia Blanca, Vale said.

Specifically, 500km of railway will be improved, and 370km of new line will be built, Vale said.

The project should make Argentina the third largest potash exporter in the world and fifth largest potash producer, the ministry said.

Although the ministry said it would be the world's largest potash project, PotashCorp's Canadian site in Lanigan, Saskatchewan, is larger when compared with 2.1m tonne/year figure released by Vale. According to PotashCorp, the nameplate capacity of the Lanigan site is 3.8m tonnes/year of potassium chloride.

Vale acquired the Rio Colorado site in 2009.

Earlier this year, government officials halted work on the project because Vale had not hired enough local people or bought enough local supplies, as required by regulations.

($1 = €0.75)
($1 = Ps4.28)

By: Al Greenwood
+1 713 525 2645

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