Brazil Potash is set to invest US$2.5bn in its Autazes potash project in Amazonas state, a significant step for the company and its flagship potash project. The project aims to extract and process sylvinite for the production of potassium chloride with a capacity of 2.2Mt/y. The Autazes project will be located 112km from Manaus, Amazonas state, and is expected to produce 20% of the volume consumed through Brazilian crops. The Autazes potash project is moving closer to approval and the inevitable and significant investment that will come with it, approaching the point where the company will begin to monetize the project through multiple channels and strategies.
Licensing and Financing Strategies
The project has already received the preliminary license issued by Amazonas’ environmental authority, Ipaam. The installation license from Ipaam is the only one remaining, and the company expects news regarding its licensing this year to begin building the project. Brazil Potash plans to invest US$2.5bn in the project and is working on several fronts in relation to funding.
The company has signed an offtake agreement with Brazilian agricultural conglomerate Amaggi, agreeing to buy 500,000t/y of the production for at least 15 years, helping the company in its search for financing. Brazil Potash has also received positive feedback from the development bank BNDES and is talking to other international development banks. The company is in talks with potential suppliers from Europe, North America, and China to purchase equipment.
Energy Supply and Logistics
To address the energy supply issue, Brazil Potash will build a 165 km transmission line to connect the project to the national grid. This will benefit the local population of around 200,000 people who currently use diesel oil to generate power for their homes. The project has an agreement with Hermasa from Amaggi group, which will deliver the product to ports in the region for logistics.
Importance of Investment in the Potash Mining Industry
Potash mining plays an essential role in agriculture as it is a vital element in the production of fertilizers. The Autazes project will produce a relevant amount of potassium chloride, which corresponds to 20% of the volume consumed through Brazilian crops. Potash mining in Brazil has been lagging behind other countries, and the Autazes project’s success will encourage more investment in the industry. Brazil Potash is committed to engaging local communities and indigenous peoples of the region, with the goal of having around 80% of the region’s people in its workforce.
With positive indications from development banks and an offtake agreement with a major agricultural conglomerate, Brazil Potash is well-positioned to move forward with the project and deliver the biggest new potash project in decades.