Vale begins phosphate production in Peru

7/12/2010

Following a period of trials, last weekend Vale initiated production at the Bayóvar phosphate mine, which will be formally opened on 5 August. Located in Piura, in the province of Sechura in northern Peru, the mine has an annual production capacity of 3.9 million tons of phosphate rock. Total investment in the project, which began in 2007, is estimated at US$ 566 million.

In addition to the mine itself, the new operation includes a phosphate concentration plant, a 32-kilometer road, a conveyor belt system and a maritime terminal.

Bayóvar's output, which is of world-class quality, will mainly be shipped to Brazil, where demand for fertilizer inputs is growing. Brazil imports around 90% of the potash and 53% of the phosphates used to make fertilizers in the country.

The Peruvian greenfield operation is Vale's first project in the international phosphate market, helping to strengthen the company's position as a major player in the fertilizer industry and boost supply to the Brazilian market.

Besides Bayóvar, in the fertilizer business, Vale owns Taquari-Vassouras mine in Sergipe, the only potash mine in operation in Brazil, and has an attractive project development pipeline. Vale is developing potash assets in Carnalita (also in Sergipe), Rio Colorado and Neuquén (Argentina), and Regina (Canada). Vale is also developing a phosphate project in Evate, Mozambique.

At the end of May, Vale completed the acquisition of the Brazilian fertilizer assets of Bunge and the control of Fosfértil. These assets are strategically located in regions of high fertilizer consumption. Fosfértil is developing a new phosphate mine in Patrocínio, in the state of Minas Gerais.

Vale