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TORONTO (miningweekly.com) – Rising demand for protein and more sophisticated diets in developing countries are spurring investors to get excited about investing in fertilisers.
The ‘protein story’ was still providing a good thesis for investment, as the developing world continued to consume more meat and dairy products, which required exponentially more agricultural inputs than traditional staples, which in turn, required improved nutrients to ensure better-yielding crops.
“It bodes well for phosphates, nitrogen and potash,” Brazilian entrepreneur and founder in 2005, at the age of 23, of fertiliser junior Verde Potash, Christiano Veloso told Mining Weekly Online in an interview.
He noted that the protein story was still evolving, with much of Africa still to follow the route Asia had gone in recent years. This would mean increased demand for high-quality fertilisers to achieve improved agricultural output, driven by the need for increased productivity owing to the scarcity of arable land, climate change, scarce water supplies and labour, among other factors.
In Asia and Africa, protein consumption per capita was still far below the norm in Europe and North America. The development of Brazil into what could very well be the world’s food basket for numerous generations to come, augured well for TSX-listed Verde Potash, which was developing the largest potash mine in the country.
Brazil is currently dependent on importing about 67% of its fertiliser needs and, with the agriculture industry estimated to grow by about 5% yearly, the need for fertiliser imports would only widen the market, even when taking into account new fertiliser plants expected to start operating in the future.
Brazil’s government had set a target to become ‘fertiliser independent’ by 2020.
The country currently had one operating potash mine, diversified miner Vale’s Taquari-Vassouras mine, in Sergipe, which produced about 8% of Brazil’s potash needs. However, the mine was due to be exhausted by 2016. MBAC Fertilizer Corp last year started single super phosphate powder production at its Itafós Arraias project, becoming the first large-scale fertiliser producer in the agricultural Cerrado area.
Veloso said Brazil’s government had set a target to become “fertiliser independent” by 2020.
He pointed out that a critical advantage to Verde Potash was that the Cerrado Verde project, in Minas Gerais, was in the heart of Brazil’s agricultural hub. The country’s agricultural nerve centre was currently responsible for about 25% of its gross domestic product and about 36% of the country’s exports.
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