AUTAZES, Brazil, Nov. 22, 2023 (GLOBE NEWSWIRE) -- Brazil’s agricultural sector is of fundamental importance to global food security The sector is responsible for roughly 30% of Brazil’s GDP and unlike all other South American economies, has assured Brazil of a huge trade surplus, acknowledged recently by the IIF Chief Economist, Robin Brooks, when he said:
“Brazil’s massive trade surplus this year gets dismissed as an outlier event, but it isn’t. There’s been a gradual move towards bigger and bigger agricultural exports which power the trade surplus. This trade surplus isn’t an outlier. It’s a lasting transformation.”
This year alone, Brazil is expected to again exceed $100 Billion in agricultural exports. No other South American economy enjoys the strength of Brazil’s currency, high employment levels and generous foreign exchange reserves. Although Brazil has some unresolved economic issues, thanks to Brazilian farmers, the many companies in the sector, and the Brazilian government at the federal and state levels, Brazil has a solid foundation for wealth creation and equitable wealth distribution.
We are in a period of global instability that has affected not only food security but also access to, and the price of, critical commodities. In Brazil’s case, potash is not only strategic but possibly the most vulnerable. Brazil’s agricultural output depends upon fertilizers. Of these, potash is of the greatest strategic importance as it makes plants more resilient to the effects of drought, extreme temperatures and insect infestation. The potash export market is dominated by three producing countries, Canada, Russia and Belarus, who historically supply just over 80% of the market. No other global fertilizer market is controlled by such a small group of countries. The Russian invasion of Ukraine and the trade restrictions imposed on Russia and Belarus by the US, Europe and many others, led to a price increase of Potash from $250 a ton to more than $1,200 a ton. Brazilian farmers were faced not only with a massive increase in cost but with the possibility that potassium chloride shipments would stop. This led to a flurry of diplomatic activity to ensure the supply of potash not be impacted by trade restriction, resulting, in addition, to the unintended consequence of significant payments to Russia while it invaded Ukraine. With imports of nearly 14 million tons, if potash had remained at $1,200, Brazil would have paid over $16 billion. A tragic consequence considering Brazil sits on top of one of the world’s largest potash reserves.
Brazil imports 98% of its potash. The use has increased from roughly 10 kgs per hectare to over 100 kgs per hectare with the accompanying increase in agricultural yields per hectare. Like Canada, Russia and Belarus, Brazil has a world class size deposit of potash, the remnants of an ancient sea, roughly 850 meters below the surface of the Amazonas State. This deposit can be mined and processed, using the same technology as in Canada, to extract the ore (salt), separate out the potash and return the remaining material (sodium chloride tailings) underground. In fact, from an environmental perspective, this project has huge positive CO2 impacts considering that Canadian potash is shipped almost 20,000 km to reach Brazil’s large soybean farmers in Mato Grosso and, more important, it will be produced within green electric energy (Brazil has 84%+ renewable energy in its grid).
While the strategic benefits to Brazil and to global food security are clear, there are also substantial benefits to the Mura indigenous communities. It is ironic that Brazilian farmers pay royalties to indigenous communities not in Brazil but in Canada, through the Canadian mining companies operating near indigenous communities in Saskatchewan that produce the potash exported to Brazilian farmers. Canpotex, a Canadian company established by Canadian potash producers to export and sell potash recently celebrated selling over 50 million tons to Brazil. At an average price of roughly $350/mt, Brazil paid Canadian exporters $17.5 billion dollars for a product readily available in Brazil. Indigenous communities in Canada benefit in several ways, including royalty payments to improve community wellbeing, direct jobs and the supply of goods and services from indigenous owned companies. The Indigenous Mura Council (CIM) representing 36 tribes and over 12,000 indigenous people from the local region to the Autazes potash project (the “Project”) voted overwhelmingly in support of the Project following a free, prior, and informed consultation process that they established. The Project is not on a reserve, the product is critical for Brazil and its farmers, and the benefits can and should be shared with the residents of Autazes, local indigenous communities and the State of Amazonas while contributing meaningfully to global food security.
For more information, please contact:
Brazil Potash Investor Relations
info@brazilpotash.com
Cautionary Note Regarding Forward-Looking Statements
All statements, other than statements of historical fact, contained in this shareholder update constitute “forward-looking statements” and are based on the reasonable expectations, estimates and projections of the Company as of the date of this letter. The words “plans,” “expects,” or “does not expect,” “is expected,” “budget,” “scheduled,” “estimates,” “forecasts,” “intends,” “anticipates,” or “does not anticipate,” or “believes,” or variations of such words and phrases or statements that certain actions, events or results “may,” “could,” “would,” “might,” or “will be taken,” “occur” or “be achieved” and similar expressions identify forward-looking statements. Forward-looking statements include, without limitation, statements regarding the Mura’s consultation process; the potash market globally and in Brazil; geopolitical tensions and opportunities; the potential benefits to Brazil and the Mura people from the Project; government support of the Company and its project; population growth and Brazil’s natural resources, the importation of potash in Brazil, the growth of the potash market and price expectations, the indigenous consultation process, completion of the ECI, studies and assessments, the receipt of the installation licence and conditions precedent thereto, advancing construction financing, offtake agreements, raising capital, completing a strategic transaction with a third party, environmental or community benefits, expected industry demands, the Company’s business strategy, the Company’s forecast of annual production and sales of potash, appointment of directors, currency fluctuations, government regulation and environmental regulation. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The estimates and assumptions contained in this letter, which may prove to be incorrect, include, but are not limited to, the various assumptions of the company set forth herein. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements. Such factors include, but are not limited to fluctuations in the supply and demand for potash, changes in competitive pressures, including pricing pressures, timing and amount of capital expenditures, changes in capital markets and corresponding effects on the Company’s investments, changes in currency and exchange rates, unexpected geological or environmental conditions, changes in and the effects of, government legislation, taxation, environmental regulations, controls and regulations and political or economic developments in jurisdictions in which the Company carries on its business or expects to do business, success in retaining or recruiting officers and directors for the future success of the Company’s business, officers and directors allocating their time to other ventures; success in obtaining any required additional financing to make target acquisition or develop the Autazes project; employee and community relations, and risks associated with obtaining any necessary licenses or permits. Many of these uncertainties and contingencies can affect the Company’s actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, the Company. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. All of the forward-looking statements made in this letter are qualified by these cautionary statements. These factors are not intended to represent a complete list of the factors that could affect the Company. The Company disclaims any intention or obligation to update or revise any forward-looking statements, except to the extent required by applicable law. The reader is cautioned not to place undue reliance on forward-looking statements.
