With an escalating trade war, global food security could be an unintended casualty if Brazil struggles to export agricultural products or import necessary fertilizer. The company Brazil Potash is working on a project to enable Brazil to source a significant portion of its potash domestically with the Autazes project.
To discover more, Digital Journal spoke with Matt Simpson, CEO of Brazil Potash, a mineral exploration and development company with a potash mining project in Brazil. As one of the world’s largest agriculture exporters, Brazil relies heavily on the fertilizer potash from countries like the U.S. and Canada.
Digital Journal: Can you tell us about Brazil Potash and the Autazes Project?
Matt Simpson: Brazil Potash Corp. (NYSE-American: GRO) is a sustainable fertilizer company developing Brazil’s largest potash project to support the country’s domestic agriculture industry while also reducing its approximately 98% reliance on imported potash. Brazil is one of the largest net exporters of agricultural products in the world at ~$167B per year, but the majority of potash used in the country today comes from mines that are located up to 12,000 miles away in Canada, Russia, Germany, and Israel.
Brazil Potash’s Autazes project is being developed in the Amazonas State of Brazil on cattle farmland, which is adjacent to the largest farming region in Brazil, Matto Grosso State. Autazes is slated to produce 2.4 million tons per year out of the about 14 million tons consumed annually by Brazilian farmers at an all in cost that is projected to be lower than just the transportation cost alone for imported potash. The deposits’ unique position along the Madeira River allows for low-cost barge transport to Brazil’s agricultural hubs, providing great flexibility to reach customers and avoid congested import ports.
DJ: What is potash and why is it important to the global market?
Simpson: Potash is a source of soluble potassium, which is one of the three main nutrients plants need to efficiently grow. The principal use of potash is as an agricultural fertilizer as it improves plants’ water efficiency, increases yields, and provides resistance to pests and disease. It’s formed by failed oceans that dried up leaving salts behind so deposits tend to be massive in size but limited in number globally. As plants grow, they adsorb nutrients such as potash from the soil needing for them to be replenished over time. Brazilian farms typically grow three crops per year, as there is no cold winter season, resulting in the soil being particularly nutrient stressed and that’s why it’s necessary to regularly add potash in the form of fertilizer.
DJ: Where does your project currently stand and when could the potash be expected to be mined?
Simpson: Construction on the Autazes Project has already started and will take approximately four years to complete and begin initial production. Once operational, the Autazes potash deposit is capable of providing ~17% of the potash Brazil needs every year for the next 23 years. Our team is committed to a fully permitted, modular construction to minimally impact trees and the environment around the project site. The current land over the project site has primarily been used for livestock with the primary deforestation occurring decades ago by prior landowners. Our vision for the site includes an underground mine and processing plant with dry stacked tailing to minimize the surface footprint.
DJ: With rising global tariffs, is there concern for the import and export of potash and agricultural products globally? How would that affect food security?
Simpson: Brazil is the largest net exporter of agricultural products in the world, according to the FAO, with the country’s abundant land, water, and warm year-round climate making it a prime candidate to help boost global food security, which has had a renewed spotlight on it due to recent geopolitical events, like the global tariff discussion and other armed conflicts, that have created massive volatility in potash prices and limited exports of key food staples such as wheat.
While our team is working to supply a large percentage of the necessary potash for Brazil’s agricultural industry domestically, as it currently stands, much of the necessary potash to ensure Brazil’s role as a global food supplier continues, will need to be imported from elsewhere including the Russia, Belarus, Isreal, Canada, and others. This makes it a key target that should be exempt from any extended trade dispute in order to ensure global food security and avoid unnecessary food price hikes. In fact, Chuck Grassley, a Republican senator from Iowa, even called on Trump to exempt potash from the trade levies.
In our minds, this further highlights the importance of our work to ensure that Brazil can source its potash without being affected by larger geopolitical events.
DJ: Why is it so important for Brazil to begin sourcing potash domestically?
Simpson: Brazil is the world’s largest importer of potash at ~22% of market share projected to grow 6.8% annually from 2023-2027, according to the CRU Group’s market outlook in November 2022, with the country being responsible for the majority of the South American potash consumption. Given ~50% of the world’s potash is produced in countries that are sanctioned or at war coupled with risks of rail and port strikes, it is imperative Brazil source such a critical mineral as potash to feed its population along with $167 billion of exports when viable.
Additionally, the Autazes project has the opportunity to reduce greenhouse gas emissions significantly through a combination of using primarily renewable sourced electricity supplied by Brazil’s national electricity grid and avoiding substantial, unnecessary international transportation of potash.
Beyond sustainability and geopolitical concerns, there is a key economic opportunity as well. With strong domestic support from the Brazil Federal Government, which has designated the Autazes project as a development of national importance, and the opportunity to reduce risk and boost agricultural productivity. The Autazes Project will be an economic stalwart for the local community, in addition to Brazil’s GDP.
