Despite recent comments indicating that it may reconsider the decision to undertake a $6 billion fertilizer project in Argentina, Vale reiterated that plans to invest $1 billion this year to implement the works, the ministry of planning of Argentina said today.
The local executives of Vale met the minister and the secretary of mining today and confirmed they will invest $1 billion in the Rio Colorado project this year, the spokesman of the ministry, Horacio Mizrahi, said.
The government wants to show that the great mining project is moving forward amid signs that investors may be afraid of the Argentine government’s decision to nationalize the country’s largest company, YPF.
On May 3, the CEO of Vale, Murilo Ferreira, said the company plans to make a decision on the project’s future on May 20. Vale is evaluating Rio Colorado due to the economic situation in Argentina, Ferreira told reporters. There may be new factors in the project construction, Ferreira said.
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A spokesman of Vale declined to comment.
In late April, the executive of Vale said the project was under review, even before the nationalization of YPF, due to concerns of Vale with the boom of inflation, around 30% per year in Argentina, and a series of discussions on infrastructure, port, railroad and taxes.
However, the Argentine authorities are interested in sending signals that the project follows on track.
The Ministry of Planning said that next week executives of Vale will meet with the new CEO of the nationalized YPF, Miguel Galuccio, to discuss plans to develop gas reserves in the fields of Lajas, needed to provide energy to the project.
Vale bought the potassium mine project from Rio Tinto in 2009, and the start of production is expected for 2014.
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