Citing cost overruns, Vale announced the suspension of its $6 billion potash project in Argentina, while Buenos Aires claims the company sought tax and investment commitments that would have cost the country $3 billion over two years. Officials of the Brazilian company said the Rio Colorado potash project in Mendoza ceased to be “in commitment to discipline in capital allocation.” The project, which could make Argentina one of the world’s leading potash suppliers, has been under review since late 2012.
Were terms to improve, Vale officials added they would consider the project’s continuation; some 4,000 project employees, they added, would have rehiring preference pending the return of construction. As one of the largest foreign capital assets in South America’s second-biggest economy, Vale has invested $2.2 billion in Rio Colorado so far, while finishing work on 40% of the mine along with its railway and port.
