Brazilian Potash, Phosphate and Fertilizer Market

The fertilizer sector in Brazil is one of the fastest growing in the world. Over the last 15 years Brazil’s crop revenue has increased from US$23 billion to US$126 billion. Brazil is the world’s largest exporter of sugar, coffee and orange juice and the second largest exporter of soybeans. The country is currently the world’s fifth largest fertilizer consumer, and demand in Brazil is forecast to grow twice as fast as overall global demand until 2025. The country is one of the largest potash importers and the third largest potash consumer in the world, as well as the second largest world importer of phosphate.

 
Approximately 90% of the country’s potash demand is met through imports, with the remaining 10% produced by Vale’s Taquari-Vassouras Potash mine that is located adjacent to the Group’s Capela Potash Project (approximately 13 km away) and the Sergi Potash Project (approximately 40 km away). The Taquari-Vassouras mines has been in production since 1985 and currently has production capacity of 625,000 metric tonnes per year. Brazil also imports 50% of its phosphate consumption. 
 
The Directors understand that the Taquari-Vassouras mine is expected to close from 2017 onwards leaving both the Group’s Sergi Potash Project and Capela Potash Project ideally positioned for a low capex development, if the Group is able to take advantage of the existing infrastructure at Taquari-Vassouras.