Rio de Janeiro — Vale has hired Canadian engineering company Hatch to conduct a new prefeasibility study on its halted Rio Colorado (GM Jan. 28, 2013) potash project in Argentina, aimed at scaling down the development, according to a Dec. 20 press release from the Mendoza provincial government. In September, the Brazilian mining major reached an agreement with the provincial authorities giving it six months to re-engineer the project. Rio Colorado was the only Vale potash asset not to be included in the portfolio of fertilizer assets that Mosaic has agreed to buy from the Brazilian mining major in the US$2.5 billion cash-and-stock deal announced on Dec. 19 (GM Dec 23, 2016). The project’s inclusion in the transaction is subject to Mosaic’s agreement following appropriate due diligence. The new study will assess the feasibility of reducing the original targeted production capacity to 1.4 million mt/y of potash in order to make it more economically viable, the government said. The original plans envisaged an initial 2.1 million mt/y capacity, with a second phase increasing that to 4.35 million mt/y. The new proposal could also abandon the plan to construct a 352 km-railway to transport the potash from the mine to the port of Bahia Blanca and use trucks instead, according to a Mining.com news report. “If, as the case may be, the results [of the study] do not live up to Mosaic’s expectations, the project would continue with Vale, which would then continue the search for a partner,” said Emilio Guiñazú, Mendoza provincial government undersecretary of Energy and Mining.
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