Saturday September 6, 2008 MYT 10:29:43 AM
Brazil's Vale to spend $479 million on Peru mine
LIMA, Peru (AP) - Brazilian mining company Vale broke ground Friday on a US$479 million phosphate mine in Peru, becoming the second Brazilian company to announce a major investment there this week.
Vale's Bayovar mine, due to open in 2010 in the northern province of Piura, will produce about 3.9 million metric tons of phosphate a year, Companhia Vale do Rio Doce SA announced in a statement. The mine has 238 million tons of phosphate reserves, which are mostly used to produce phosphate fertilizers.
The investment will turn Peru into an exporter of phosphorous rock and eventually of phosphate fertilizer, Peruvian President Alan Garcia said at the inauguration ceremony.
Vale, the world's top producer of iron-ore, has never before mined phosphate, but demand for fertilizer - for crops from sugarcane to soy - is now skyrocketing as agribusiness booms across Brazil, Argentina and Paraguay. Brazil is now forced to import most of its fertilizer, despite producing 6 million tons of phosphate fertilizer a year.
The U.S., the world's top producer of the substance, produced 29.7 million tons in 2007, according to the U.S. Geological Survey.
Vale won the Bayovar concession in a public auction in 2005, when it promised to build a phosphate processing plant within five years. It will also build an export port in the Pacific town of Piura, creating about 1,600 jobs, the company's statement said.
Brazilian steel company Gerdau SA on Monday vowed to invest US$1.4 billion in its Peruvian steel subsidiary, which could help supply Brazil's construction boom.-AP
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