Brazil's state-run oil company Petrobras will lease mining rights to its potash mine concession in the north-eastern state of Sergipe to local miner Vale, Petrobras's chief executive said.
Jose Sergio Gabrielli, the CEO of Petrobras, said the company has no intention of exploring for potash - an important crop nutrient - and will also likely sell or farm out its concession of a potash deposit in the Amazon.
Gabrielli said the leasing of the Sergipe mine to Vale will likely be done in the next month or slightly more.
"In 30, 40 days we will close the deal to pass on the mining rights to Vale. The area in the Amazon is under analysis at the Mines and Energy Ministery," Gabrielli said.
The chief executive of Vale's fertiliser division, Mario Barbosa, said on July 29 that the company expects to invest roughly $4 billion in an eventual expansion of its aging potash mine in north-east Brazil. The expansion plan would more than triple output from the mine from the current 700,000 tonnes per year to 2.4 million tonnes. Brazil, a major world agricultural power, has to import about 90 percent of its annual potash needs.
Vale is trying to secure a 35-year contract from Petrobras to explore and produce from an area adjacent to its current potash mine in the state, he said. Terms for the existing mine expire in 2017.
Gabrielli added that Petrobras' interest in the fertiliser sector is isolated to urea and ammonium nitrate, which are not produced through mining but from processing petroleum and natural gas.
He said that by 2015, Brazil should be self-dependent in ammonium nitrate, of which it now imports 53 percent of its needs. The country's dependence on urea imports will fall from 53 percent today to 28 percent by 2015.