Verde Potash boosted by Brazilian government’s fertilizer incentives

Verde Potash (TSX.V:NPK) is set to receive a major boost from measures unveiled by the Brazilian government to expand its domestic fertilizer sector.

ProInvestors reports that the measures unveiled by the Brazilian government Friday last week will come into effect in 2013 and seek to foster the growth of the domestic fertilizer industry while diminishing export reliance.

Toronto-listed Verde is well placed to reap benefit from the new measures. The company has devised a process which creates potassium chloride – the most common form of potash -from a potassium silicate rock which is commonly found near the surface of the company’s Cerrado Verde project in Minas Gerais State.

This confers Verde with a pivotal advantage compared to its Russian and Canadian rivals who have traditionally dominated global potash production. Russian and Canadian potash deposits are buried deep beneath the earth’s surface and their successful extraction entails billions of dollars in capital spending.

Verde’s potash project enjoys the additional advantage of being situated within one of the key markets for the fertilizer ingredient – Brazil itself.