Vale SA (VALE3), the mining company that halted a $6 billion potash project in Argentina this year, will sign a preliminary agreement with provincial authorities that may lead to its resumption, a government official said.
Vale is expected to sign the agreement with federal and provincial authorities today to establish new terms that may allow the project to proceed, said the official, who asked not to be named because talks are private.
Company executives are meeting in Buenos Aires with Carlos Molina, mining director for Mendoza’s province, where the potash mine is located, to sign the accord, the person said.
The agreement to be signed is related to “legal and working obligations for the project,” Vale’s press office in Rio de Janiero said.
Work at the Rio Colorado fertilizer operation was suspended indefinitely in January so Vale could reassess the project, which has become more costly on inflation and exchange rate fluctuations. Vale is also receiving demands from some of the provinces affected by the project, Chief Executive Officer Murilo Ferreira told analysts in a conference call yesterday.
The company is reviewing options and will discuss the project at a board meeting March 11, he said. Vale dropped 2.7 percent to 35.49 reais in Sao Paulo at 4:29 p.m.
To contact the reporters on this story: Pablo Gonzalez in Buenos Aires at email@example.com; Juan Pablo Spinetto in Rio de Janeiro at firstname.lastname@example.org
To contact the editor responsible for this story: James Attwood at email@example.com