Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Canada-based Brazil Potash Corp has filed initial documents with U.S. regulators ahead of a $50 million fundraising round around November that would value the fertilizer venture at about $520 million, Chief Executive Matt Simpson said on Monday.
Simpson said the company, part of a push to launch large-scale production that could make Brazil a major source of the fertilizer commodity, was also in talks with several large global producers on a potential takeover or investment.
If none of those talks come to fruition, he told Reuters that the company, which has already raised $198 million in capital, will proceed with a $4 per share offer that will take it through to a public listing in 12 to 18 months.
He declined to say which companies he was in talks with.
Potash is a vital commodity in Brazil, one of the world’s biggest agricultural producers, and Brazil Potash’s Autazes mine is one of several potential projects in a 400-km belt south of the Amazon which the government hopes will end its almost complete reliance on imports of the material.
The company, which has pushed its estimate for coming online back to mid-2025 thanks to delays in consultations with indigenous groups, projects initial output from Autazes at around 2.4 million tonnes per annum, sufficient to supply about 20% of Brazil’s Potash needs.
Output from the facility, which the company estimates will eventually cost $2.1 billion to bring online with a mine life of 34 years, will eventually be doubled.
Once in production, Brazil Potash is targeting annual earnings before interest, taxes, depreciation, and amortization of $718 million, which could result in a market valuation of as much as $7.2 billion according to its projections.
(By Shariq Khan; Editing by Patrick Graham and Ramakrishnan M.)
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