FILE PHOTO: An agricultural worker shows a fertilizer before spreading it in a soybean field, near Brasilia, Brazil February 15, 2022.REUTERS/Adriano Machado
March 31, 2022
By Anthony Boadle
BRASILIA (Reuters) – Toronto-based Brazil Potash Corp has laid out for Brazilian President Jair Bolsonaro this week its plans to reduce his country’s dependence on fertilizer imports disrupted by the Ukraine war by opening a potash mine in the Amazon.
The company’s owner, investment banker Stan Bharti, met with Bolsonaro on Monday to discuss the $2.5 billion project that has been held up since 2017 due to a suspended environmental permit pending consultations with the indigenous Mura people.
Bolsonaro told Bharti his government was committed to “unlocking” fertilizer projects such as the potash mine that are strategic for Brazil, said former Senator Cidinho Santos, who attended the meeting, in an Instagram post on Wednesday.
But the decision to allow the mine at Autazes, 75 miles (120 kms) southeast of the state capital Manaus, is not entirely up to Bolsonaro. The project now depends on a ruling by Federal Judge Jaiza Fraxe, who is monitoring talks with the Mura people to make sure they have a fair say.
As potash prices tripled last year and war has threatened supplies from Russia and Eastern Europe, pressure to open the potash mine has grown from Brazil’s farm sector, which relies on imports for 85% of its fertilizer, needed to raise crop yields.
Brazil, the world’s largest producer of soybeans, depends on potash imports from China, Canada and Morocco, but mostly Russia and Belarus for nearly half of the supplies in the country but whose exports have been crimped severely by sanctions against Russia.
Potassio do Brasil, a subsidiary of Brazil Potash, which is wholly-owned by Bharti’s Forbes & Manhattan bank, said it would take three years to get the mine operating, with an output of 2.44 million tonnes per year once permits are obtained.
“As soon as the environmental license is restored, we will apply to Amazon environmental protection agency IPAAM for an installation license and start work,” Chief Executive Adriano Espeschit told Reuters in an emailed statement. “We hope to be producing in Autazes at the start of 2026.”
Espeschit said the company recognizes the Mura’s right to be consulted under the International Labor Organization (ILO) convention 169 on indigenous and tribal peoples, and meetings have begun after a two-year delay due to the COVID-19 pandemic.
Judge Fraxe’s office did not reply to a request for comment on the meetings. Claudio Mura, head of a local indigenous council, declined to speak by telephone on how talks were going.
Prosecutor Fernando Soave, who first called for the license suspension in 2016 because the Mura had not been consulted, did not immediately respond to questions.
His office said exploratory drilling for potash deposits by the company began in the region in 2009 without consulting the Mura people, who claim the area as ancestral lands, though their claim has not been recognized by the Brazilian government.
Brazil Potash said the entrance to the planned mine will not be on indigenous land, which the Mura dispute, and that the environmental impact of mining potash deposits 800 meters (2,625 ft) below ground will be negligible.
The prosecutor’s office has warned of the project’s significant social and cultural impact on the Mura people. Consultations are expected to take time as they involve 44 Mura villages.
(Reporting by Anthony Boadle; Editing by Marguerita Choy)