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3/10/13

Folha: Vale (VALE) to cancel its Cerro Colorado potash project in Mendoza, Argentina

It's been in some doubt for a while, but this morning Brazil's Folha newspaper reports that Vale (VALE) has decided to scrap its U$5.9Bn Rio Colorado potash project in Mendoza, Argentina. Here's Reuters EngLang with its take:

RIO DE JANEIRO, March 10 (Reuters) - Brazilian mining giant Vale SA is likely to cancel a $5.9 billion potash project after failing to gain tax breaks from Argentina, the Folha de S. Paulo newspaper reported on Sunday.
Without relief from the Argentine government, the cost of the Rio Colorado potash mine, railway and port system is expected to soar 86 percent to $11 billion, making it unviable, Folha said, citing unnamed Vale officials.
The possibility of Vale pulling out of the project would also be a blow for the Brazilian government, which was counting on the mine in Argentina to help to secure new supplies of potash, a critical fertiliser, for its agricultural industry.


Continues here and believe me folks, it'll be a blow to the Argentine government as well.