Argentina’s Province of Mendoza has selected Swiss financial services company UBS Group AG to find a partner to develop the Potasio Rio Colorado potash mine or sell the deposit. The province, which expects the selection process to take 18 months, believes it would cost at least US$1 billion to get the idled project into production.
Mendoza took over the project last year after Brazil’s Vale SA completed the handover of the asset to the provincial government after years of wrangling between the two parties. Vale had pulled the plug on the Rio Colorado potash project in 2013 after spending some $2.2 billion to build almost half the mine (GM Jan. 28, 2013). It acquired the potash project in February 2009 from Rio Tinto Plc (GM Feb. 9, 2009).
The original plans for the project envisaged an initial 2.1 million mt/y capacity with a second phase increasing that to 4.35 million mt/y, as well as the construction of a railway spur of 350 km to transport the potash to Argentina’s Bahia Blanca port.
However, according to a Bloomberg report, citing provincial officials, a more likely scenario for the project would be for an annual output of 1 million mt, which could be transported by truck. This scenario would need an investment of some $1 billion.
According to the Bloomberg report, Mendoza is prepared to scale down the project still further simply to get it operational. An investment of $200 million would reportedly produce enough potash for the Argentinian market and nearby neighbor Uruguay.