Despite negotiations with the Argentine authorities, Vale SA said March 11 that it has informed the Argentinean government that it is suspending the implementation of the US$6 billion Rio Colorado potash project, in Argentina. It said that in the current macroeconomic environment the economics of the project are not in line with Vale’s commitment to discipline in capital allocation and value creation. It said if it resumes the project, preference will be given to the project’s current employees.
Vale said it will keep honoring the commitments related to the concessions and searching for alternatives that enhance the economics of the project, to then evaluate its resumption.
Vale announced in January that it was idling the project. However, in the meantime, it has tried to negotiate concessions from the Argentine government. It has also been seeking partners.