Vale SA, Brazil’s only potash producer, threatened to sell its Carnalita fertilizer project if the local governments can’t settle a dispute over how the venture will be taxed.
Vale will wait for officials from Capela and Japaratuba, the municipalities where Carnalita is located, and other political leaders to meet again before deciding on the future of the mine, Vale Chief Executive Officer Murilo Ferreira told senators in Brasilia today. The Rio de Janeiro-based company will stop work at the project in the northeastern state of Sergipe on Feb. 28 as it awaits clarity, he said.
“If there is no political solution to this, we will give mandate to a bank so we can sell the project and somebody else can develop it,” Ferreira said during a Senate public hearing. “We won’t be an obstacle for its development if the municipalities for any reason can’t reach an agreement.”
Vale, the world’s largest iron-ore producer, is putting projects on hold, selling assets and seeking partners to share costs amid falling commodities prices. The company, which last year canceled a $5.9 billion fertilizer project in Argentina, saw Carnalita as its most advanced potash project in Brazil, Roger Downey, the head of Vale’s fertilizers and coal business, said Sept. 26.
Vale rose 0.1 percent to 30.63 reais at 1:39 p.m. in Sao Paulo, trimming its decline this year to 6.4 percent.