BUENOS AIRES – Brazilian miner Vale SA is considering a restart of its Rio Colorado potash project in Argentina after a long delay, the company said on Wednesday, the latest sign that international investors are eyeing a return to the country.
Vale suspended work on its Rio Colorado project in the western province of Mendoza in 2012, having already invested $2.2 billion, as prices for the key crop nutrient crashed and after the former government refused to offer tax concessions to mitigate soaring costs related to Argentina’s inflation and exchange rate.
Vale is now looking to invest $1.5 billion to restart construction at Rio Colorado in coming months, a spokesman at Mendoza’s energy ministry said. Vale said it had discussed a possible development plan with the Mendoza government, without giving figures.
Vale’s efforts to jump-start the venture come as Argentina’s new center-right government tries to create a more business-friendly environment for mining companies. Some companies have already announced their interest in investing.
To ensure profitability, Vale told the local government that it was cutting forecast capacity for the project to 1.3 million tonnes annually from a previous goal of 4 million tonnes, the Mendoza energy ministry spokesman said.
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