That, and new mining initiatives rising in Canada and Laos, would possible preserve a lid on costs, they mentioned.
“All in, our value to mine, course of and ship the potash to farmers in Mato Grosso state might be $130 per ton,” CEO Matt Simpson mentioned in an interview on Monday, breaking down manufacturing value in Brazil at $80 per ton and transportation at $50 per ton.
In accordance with a separate value evaluation, Russia’s extraction value is estimated at $50 and Canada’s at $80, Simpson mentioned. That might make the corporate’s Brazil potash much less aggressive than Russia’s and “in line” with Canada’s, he conceded.
Brazil depends on imports for almost 100% of provides, which come from nations like Canada and Russia.
Simpson famous freight tied to potash imports alone was greater than the whole value for the corporate, whose mine is considerably nearer to native farmers.
In a presentation despatched to Reuters, the corporate’s potash value in Brazil was forecast to be $459 on a cost-and-freight (CFR) foundation, which appeared excessive to analysts who spoke to Reuters.
Simpson mentioned that projection must be understood as a median over the mine’s life span, conservatively calculated at 23 years. He additionally cited 15 million tons of further international demand for potash within the subsequent eight years.
“There’s going to be a six-to-seven million ton shortfall in new provide versus demand that’s going to trigger a structural shift up of roughly $100 a ton,” he mentioned, predicting Brazil’s potash value might be $400 or $500 by 2032.
Brazil Potash goals to provide 2.4 million tons per 12 months, a fifth of nationwide demand, and can goal Mato Grosso farmers primarily.
The corporate additionally hopes to make direct gross sales, eliminating blenders, which Simpson mentioned cost $50 to $70 premiums from patrons.
Manufacturing on the Amazon mine, which has 4 of 11 required licences to finish building, is scheduled to begin in 2029, Simpson mentioned.
(By Ana Mano; Modifying by Josie Kao)