UPDATE 1-Vale seeks fertilizer partner; potash to top 4 mln T/yr

Wed Dec 18, 2013 3:35pm EST
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* New mines to more than replace canceled Argentina Rio Colorado plan -CEO

* Glencore-Vale Sudbury nickel venture seen in 1st qtr -CEO

* Vale signs iron ore contract with U.S.-based Nucor -CEO

By Jeb Blount and Sabrina Lorenzi

RIO DE JANEIRO, Dec 18 (Reuters) - Brazilian miner Vale SA expects to more than replace the 4 million tonnes a year of potash it stands to lose from the cancellation of its Rio Colorado project in Argentina as it opens mines in Brazil and Canada, its top executive said on Wednesday.

At least 2 million tonnes a year of potash output is expected from its Carnalita project in Brazil's northeastern state of Sergipe and 3 million to 5 million tonnes a year could be mined from its Kronau project in Canada's Province of Saskatchewan, Chief Executive Officer Murilo Ferreira told reporters on Wednesday.

Vale canceled plans to build the $6 billion Rio Colorado project in Argentina in March on concerns the country's currency-exchange policies made the mine, rail and port project unprofitable and after being denied legal tax breaks. It is now trying to sell shares of its fertilizer unit or stakes in specific fertilizer projects, Ferreria said.

"We are looking for partners in our fertilizer business," he said at an annual holiday lunch with reporters. "But if the partner takes a stake in our fertilizer unit, we don't want someone who is just a financial partner, we want someone who has their own production already."

A decision to move forward with Carnalita could be made as early as the first quarter of 2014, he said. Vale mines potash and nitrates and makes nitrogen-based fertilizers.   Continued...