Potash and Phosphate
Mining for Brazil's food security
Alongside mining, another pillar of Brazilian exports is the agricultural industry. Brazilian agricultural exports continue to surge yearly; agricultural activity grew over 15% between 2022 and 2023, according to the Brazilian Institute for Geography and Statistics. Food security is a cornerstone of Brazilian government policy. Alongside it’s booming agricultural export business, providing for Brazil’s population, which according to the Brazilian Institute of Geography and Statistics (IBGE), reached 212.6 million people in July of 2024, is equally important. The country has made significant progress eliminating food insecurity; the U.N.’s State of Food Security and Nutrition in the World report, stated that in 2023, severe food insecurity dropped over 85% in 2023. Being able to secure domestic production for consumption and export is key.
Producers in Russia, Belarus and Canada dominate the global fertilizer market. The continuing war in Ukraine has since 2022 thrown into question the reliance on Russian and Belorussian inputs for crucial fertilizers. In the immediate aftermath of the Russian invasion of Ukraine, global fertilizer prices skyrocketed. Though prices have stabilized since, the war is an ongoing source of insecurity in this market and is forcing countries and companies to look elsewhere. To highlight just how globally significant the Brazilian fertilizer market is, and will continue to be, major mining companies such as BHP are venturing into the potash market. Discussing BHP's foray into this crucial sector and the importance of Brazil, Carla Wilson, general manager of BHP Brasil, said: "Globally, our focus is on potash development, particularly the Jansen project in Canada. This project is now 52% complete for its first phase, with the second phase being developed in parallel. Once fully operational by 2026/2027, the Jansen mine will become one of the world's largest potash producers. With its massive agricultural sector, Brazil is expected to be one of the top three consumers of our potash products, playing a crucial role in global food security."
As this sector continues to grow, the country's reliance on foreign imports of potassium and phosphate, crucial for fertilizer products, becomes an increasing risk, and mining companies are delivering projects to confront this shortfall and secure Brazil's strategic autonomy and food security. One such example is Potássio do Brasil, which is developing its flagship Autazes project, which seeks to produce 2.2 million t/y of potassium, equivalent to 17% of Brazil's consumption, once completed. Over the past year, Potássio do Brasil has accomplished notable milestones, including approval of the Autazes project’s implementation license. Discussing the importance of securing domestic production for the country, Adriano Espeschit, CEO of Potássio do Brasil, said: "The concentration of potassium production among a few countries poses a potential risk to global supply chains and, in turn, global food security. Our project aims to significantly contribute to Brazil's agricultural sector by reducing dependency on imported potassium and ensuring a stable supply of fertilizers." Espeschit continued: "Over the next 12 months, our primary focus will be on advancing key construction milestones, including the development of two 930-meter-deep shafts and essential infrastructure such as the mining plant, access roads, and port facilities."
“Morro Verde is a company focused on producing natural fertilizers. Our goal for 2024 is to produce 600,000 t of phosphate and limestone, with a target of reaching 1.5 million t/y within a few years.”
Caíque Souza, CEO, Morro Verde
Morro Verde is an established producer in the fertilizer industry, producing limestone, phosphate and magnesium, and is based in Pratápolis. Caíque Souza, Morro Verde's, CEO, said: "Our goal for 2024 is to produce 600,000 t of phosphate and limestone, with a target of reaching 1.5 million t/y within a few years."
Souza also commented on the difficulties raising money for capital projects in the mining industry and highlighted the role that private equity is playing in Brazil's mining scene, as Morro Verde recently received substantial investments from Ore Investments, a Brazilian mining-focused investment house: "We need a low capital-cost environment to attract investors. Once a resource is discovered, we still require capital to develop it, which is challenging in a high-interest environment."
The Mosaic Company, Brazil's largest fertilizer company that mines phosphate and potash in Brazil and North America, has recently launched a new bioscience division in Brazil, focused on bio-nutrition, and is investing heavily in the country's agricultural sector. Nancy Case, vice president of operations and technical services at Mosaic, commented: “The company has made much progress on our blending unit project in Tocantins, a R$400 million investment."
“The Autazes project is designed to produce 2.2 million t/y of potassium, which is equivalent to approximately 17% of Brazil's current demand. This will substantially reduce our dependency on imported potassium, which currently stands at 98%.”
Adriano Espeschit, CEO, Potássio do Brasil
Article header image courtesy of The Mosaic Company