Vale ‘Very Concerned’ About $5.9 Billion Argentine Project
Vale SA (VALE3), the world’s second-largest mining company, is “very concerned” about its $5.9 billion potash project in Argentina, where the government last week seized control of oil producer YPF SA. (YPFD)
Vale, based in Rio de Janeiro, will present a review of its Rio Colorado potash project in the Argentine province of Mendoza to its board next month, Chief Executive Officer Murilo Ferreira said in a conference call with analysts today.
“We are very concerned about the political situation and their whole environment in Argentina,” Ferreira said. “We are doing a big analysis of the situation outside of the project.”
Argentine President Cristina Fernandez de Kirchner announced the government takeover on April 16 of the Argentine oil company that was majority owned by Spain’s Repsol YPF SA. (REP) The decision will deter international investment in the South American nation, according to analysts such as Felipe Hernandez at RBS Securities Inc.
Vale has already spent $1.1 billion on Rio Colorado, which will be able to produce 4.3 million metric tons of potash, a mineral used to help strengthen plant roots and defend against drought. The company may surpass its investment target for this year as it accelerates development of mining projects, Vale Chief Financial Officer Tito Martins said today.
BHP Billiton Ltd. (BHP) is the world’s largest mining company.
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