June 8, 2012

Vale re-evaluates Argentina's potash project

The management of Vale has plans to re-evaluate a US$3-billion potash project in the province of Mendoza, Argentina, the company's head of fertilisers, Roger Downey, stated.

Vale, the world's second-largest miner, said in April it would re-evaluate the BRL5.9 billion (US$3 billion) project due to political and cost overrun risks.

The concession for the Rio Colorado potash project was suspended in the middle of 2011 when the provincial government of Mendoza accused Vale of failing to comply with local labour laws.

"We remain in contact with the Argentine government, which is aware of the obstacles concerning the project," said Downey in an email to Reuters. "We're confident we'll overcome the difficulties with it."

This week, the Brazilian and Argentine governments will meet to address trade issues, such as the adoption of barriers by Argentina that have slowed Brazilian exports to its neighbor.

Marco Aurelio Garcia, special spokesman for President Dilma Rousseff on foreign affairs, said he "felt Rio Colorado would move ahead," after recent talks with Vale Chief Executive Murilo Ferreira and Argentina's planning minister, Julio De Vido.