Verde Potash reports Brazilian potash consumption increased 9.3% year-over-year to a record 8.1 million tonnes in 2012. 93% of that -- 7.5 million tonnes -- was imported and the one existing potash mine in Brazil is projected to run out of ore in 2016. Verde Potash hopes to capitalize on the strength of Brazilian K demand with a new potash mining project under development at Cerrado Verde.
President and CEO, Cristiano Veloso, said: "Verde is focused on advancing the engineering, permitting and financing of the Cerrado Verde project. Our strong cash position ($21.2 million as at September 30, 2012) and first rate technical team provide us with all of the resources necessary to publish our bankable feasibility study and drive the project towards construction."
Brazilian potash consumption is growing faster than in other major consuming countries. Brazil has posted a 10-year compound annualized growth rate (CAGR) for potash consumption of 4.7% vs. 2.3% for the world overall. Brazil's domestic production of potash has declined in recent years and is forecast to decline again in 2013.
Potash typically takes three to four months to arrive at the customer's door, including 60+ days traveling by rail, ship and truck and an additional 30+ days waiting to unload at one of Brazil's congested ports. Ships routed through Paranaguá, the highest volume port for potash shipments in the country, waited a minimum of 30 days to unload in every month of 2012.
The Cerrado Verde project is located less than 300km from Uberaba - i.e. a four hour drive via BR-262 - a good quality Brazilian federal highway. Uberaba is a major fertilizer blending district in Minas Gerais state which accounted for more than 500,000 tonnes of KCl consumption in 2012.
The mine could go operational relatively quickly once all the paperwork is done. The high grade potash rock outcrops are amenable to strip mining and are located near quality infrastructure that will allow product to be moved more efficiently to downstream outlets and growers.
Verde Potash is looking to service the world's fastest growing fertilizer market with increased domestic product. As demand from farmers for quality K increases, Verde's Cerrado Verde project is positioned to be the only game in Brazil.