15 May 2012 16:55 [Source: ICIS news]
MEDELLIN, Colombia--Brazilian mining company Vale will invest $1bn (€780,000) this year in the Rio Colorado potash project in the Argentine province of Mendoza, Argentina’s government said on Tuesday.
Vale Argentina president Sergio Leite ratified the company's 2012 investment plans in the Potasio Rio Colorado project during a meeting on Friday with Argentine Minister for Planning Julio de Vido, the ministry said.
The announcement was made after concerns were voiced over the future of the project in light of Argentina’s takeover of Spanish-controlled oil producer YPF.
''The minister of planning met Vale executives to analyse the progress of this important project, which involves a total investment of $5.9bn'', said Horacio Mizrahi, spokesman for the Argentine ministry. ''Vale confirmed that this year the company will invest $1bn in Potasio Rio Colorado'', he said.
It was also confirmed that Vale officials are scheduled to meet next week with the new head of YPF, Miguel Galuccio, to discuss plans to develop tight gas deposits in the Lajas fields, which are needed to provide the project's electricity power, the ministry said.
Vale bought the potash mine project from Rio Tinto in 2009, and production is expected to begin in 2014.
The project should make Argentina the third largest potash exporter in the world and fifth largest potash producer, the ministry said.
By Simon West
($1 = €0.78)
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