* Verde Brazil mine slated to start production in 2015
* Investors note that Verde may bump up capacity, analyst says
* Salman's Rubakovic concerned about insufficient nearby demand
* Shares rise 12 pct, up 21 pct in past week
March 18 (Reuters) - Shares of Verde Potash PLC jumped 12 percent on Monday, as the junior miner's plan to build a potash mine in Brazil looked more attractive with Vale SA putting on hold an Argentine project to produce the crop nutrient.
Verde is aiming to start producing potash in 2015 at its Cerrado Verde mine. It is currently at the stage of acquiring permits.
Vale, one of the world's biggest miners, said last Monday it was halting operations on its $6 billion Rio Colorado project, which would supply potash to agricultural powerhouse Brazil.
Verde shares jumped 12 percent to C$2.90 on the Toronto Stock Exchange around midday on Monday.
In pushing up Verde's share price about 21 percent in the past week, investors have taken note of the junior miner's management talking about increasing the output of its project, said analyst Andrea Rubakovic of Salman Partners.
Verde's future potash mine would have a transportation cost advantage over North American producers to supplying buyers in Brazil.
But Rubakovic views the potential expansion of capacity as a negative, saying fertilizer demand in the immediate area around the project is not great enough to support such a large-scale operation.
She slashed her target price on Verde shares to C$2.75 from C$5.75 and left her recommendation at "hold."
$1=$1.02 Canadian Reporting by Rod Nickel in Winnipeg, Manitoba