Phosphate miner MBAC starts Brazil production, shares climb
By Peter N Henderson
TORONTO, July 11 (Reuters) - Shares of MBAC Fertilizer Corp jumped as much as 7.5 percent on Thursday to a two-month high, after it said its Brazil mine had begun to produce phosphate.
MBAC mines and processes phosphate, a key crop nutrient, in the central Tocantins state near Brazil's northern growing region.
Robert Winslow, an analyst with National Bank Financial, said the location of the company's Itafós Arraias project gives it a logistical advantage over rival phosphate producers on the coast who depend on imported raw phosphate rocks.
"It's one of the plants that is most strategically located," Winslow said. "They're much closer to the growers."
The Itafós Arraias project produces a powder of single super phosphate, a form of the chemical that also includes sulfur, another nutrient used in farming.
"In the region where they're providing it, this is one of the highest-demand fertilizers," Winslow said.
The region where the project is located is known as the Cerrado, a tropical savannah belt of 204 million hectares once thought worthless for agriculture. But since new investments in the 1970s the area has become a breadbasket, with more than 100 million hectares still awaiting development.
"Brazil is one of the few countries that can dramatically grow its cropping area," said MBAC Vice President Steve Burleton. "There's lots of room for growth, and we're right in the heart of where that's happening." Continued...