Russia-based fertilizer producer Eurochem has signed an agreement to purchase the Serra do Salitre phosphates project in Brazil from Norway's Yara.
The project, located in southeastern Brazil's Minas Gerais, is scheduled to bring on stream a 1mn t/yr phosphates plant, producing MAP/NP, as well as SSP and TSP, in 2023. The project will reach its target output in 2024, Eurochem forecasts.
The project has a 1.2mn t/yr phosphate rock capacity, with rock reserves of over 350mn t.
The mine and beneficiation plant are already operating, producing 500,000-600,000t of phosphate rock. The project will also include a sulphuric acid plant, a phosphoric acid plant and a 400,000t storage facility for finished fertilizers.
Eurochem will purchase the project, into which Yara entered in 2014, through a shares purchase with a cash consideration of $410mn. The transaction will be completed in six months, subject to regulatory approval, Yara expects.
Yara had taken full control of the Serra do Salitre project after completing the purchase of the remaining 40pc stake in Galvani Industria, Comercio e Servicos, as announced in October 2018.
All eyes on Brazil
Brazil is an agricultural powerhouse and the world's largest importer of MAP fertilizer, with imports hitting a record 4.76mn t last year. The country is a top producer of soybeans, for which phosphate-based fertilizers are key. Brazil is set to produce 144mn t of soybeans in 2021-22, according to latest US Department of Agriculture (USDA) projections.
Eurochem has increasingly sharpened its focus on Latin America in recent years, increasing fertilizer sales to the region to 5.09mn t in 2020, up by a fifth on the year.
Eurochem last year shifted trade flows of phosphate fertilizers, largely in favour of Latin America, after the levying of duties on Russian-origin fertilizers by the US Department of Commerce in February. Latin America accounted for a quarter of total sales last year, with Brazil taking 22pc, Eurochem said.
Yara retains a notable presence in Brazil, expanding its operations with the recent inauguration of a granulation complex with targeted output up to 1.2mn t/yr in the southern state of Rio Grande do Sul, as announced at the end of March this year. The firm also operates major complexes in Sao Paulo state, with a production facility in Cubatao purchased from mining firm Vale in 2018, as well as the Paulinia SSP facility.
Yara's fertilizer sales to Brazil dropped by 4pc to 2.21mn t in the second quarter.
