Aug. 4 (Bloomberg) -- Vale SA, the world’s biggest iron-ore producer, said its interest in phosphates and potassium to make fertilizer goes “further than just mining.”

The fertilizer market has “very promising” long-term prospects linked to growth in personal income, Vale Chief Financial Officer Fabio Barbosa told analysts today in Rio de Janeiro. He declined to comment on whether the company wanted to produce fertilizer for direct sale to customers.

Vale produces potassium at Taquari-Vassouras in northeast Brazil, and is developing new projects at Neuquen in Argentina and Carnalita in Brazil. It plans to start producing phosphates at Bayovar in Peru in 2010. Early this year it acquired potassium mine projects at Rio Colorado, Argentina, and Regina, Canada, formerly belonging to Rio Tinto Group, for $850 million.

Vale’s potassium revenues jumped 86 percent during the second quarter to $121 million on higher sales volumes, the company said last week. The projects under development could boost Vale’s output of the raw material to more than 12 million metric tons a year, making it one of the world’s biggest producers, according to Vale’s Web site.

Barbosa reiterated that the company plans to develop its own phosphate and potassium projects and isn’t planning to acquire fertilizer companies. Future output targets in this area will “depend on market analysis,” he told reporters.

Vale said July 17 that it hadn’t made any offers to acquire other companies in the fertilizers business. The statement followed a report in Brazil’s O Estado de S. Paulo newspaper that Vale was preparing a $25 billion bid for U.S. fertilizer producer Mosaic Co.

To contact the reporter on this story: Diana Kinch in Rio de Janeiro at dkinch1@bloomberg.net

Last Updated: August 4, 2009 13:51 EDT