Australian firm prepares to build Brazil's first southern phosphate mine

·2 min read

By Ana Mano

SAO PAULO, Aug 17 (Reuters) - The Brazilian arm of Australia's Aguia Resources Limited hopes to complete building the first phosphate mine in Southern Brazil by late 2023, Aguia Fertilizantes Chief Executive Fernando Tallarico told Reuters on Wednesday.

The company expects to get the installation license required to start work around October, he said. Construction will take about one year, and an operating license is needed to begin production, he added.

"This area is known for more than 200 years for production of copper and gold," Tallarico said of the town of Lavras do Sul, close to the border of Uruguay. "We were the first to verify the possibility to produce phosphate in the region."

Momentum is building for this and similar fertilizer mining projects in Brazil after the federal government announced a plan to reduce the country's dependence on imports.

But a complex legal system poses challenges.

For example, in 2021 an injunction suspended Aguia's preliminary license for the phosphate mine. A final decision is pending.

While the company said that ruling does not affect its installation license application, it represents a risk.

Brazil's government aims to slash overall fertilizer imports to 45% of total domestic consumption from the current 85% by 2050.

That is attracting companies like Aguia, and reviving interest in old projects, including in the Amazon, where permits may be harder to get.

Aguia's goal is to explore the Lavras do Sul deposit, where an estimated 105 million tonnes of phosphate lie, for an initial 18 years. It is also developing a nearby copper project.

The phosphate mine will produce 300,000 tonnes annually at maturity. Conservatively, Aguia expects the project to start repaying investors in 2.6 years, Tallarico said.

Brazil's phosphate consumption is 7-8 million tonnes per year, but the country imports 72% of demand from countries like Morocco and Jordan. (Reporting by Ana Mano; Editing by Richard Chang)