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Latino Daily News

Friday August 17, 2012

Economic Uncertainty Halts Brazilian Mining Firm’s $3 Billion Project in Canada

Brazilian mining giant Vale has halted a $3 billion potash project in Canada due to global economic uncertainty, the daily O Estado de S. Paulo reported Friday.

“Certainly it won’t be implemented now,” CEO Murilo Ferreira told the newspaper, noting that the company was considering postponing other projects in Argentina and Guinea if the current global conditions persists.

The potash project in the Canadian prairie province of Saskatchewan, known as Kronau, was to have produced 2.9 million tons of that mineral annually.

O Estado de S. Paulo said Vale also is “reviewing” a similar potash project in the Argentine region of Rio Colorado, where the company is mulling a $5.9 billion investment, an iron-ore project in the West African nation of Guinea that would require an investment outlay of $2.5 billion.

The newspaper noted, however, that the Canadian project is the only one thus far that has been truly “frozen.”

Ferreira, meanwhile, guaranteed that Vale’s massive Serra Sul iron-ore project in the northern Brazilian state of Para remains on course. That project will require investment of $19.5 billion to expand output at the mine, part of the Carajas complex, to 90 million tons annually.

“Serra Sul is an absolute priority. It’s the largest project in the company’s history,” he said.

Vale has consolidated its position this year as Brazil’s leading net exporter, with sales to foreign markets totaling $14.3 billion between January and June.

Vale is the world’s biggest iron-ore exporter and also a large producer of other metals and minerals such as aluminum, manganese, coal, potash, bauxite and phosphate.