Brazilian miner Vale (NYSE: VALE) will start up a new phosphates plant in Peru in 2014 as part of a plan to expand production at its Bayóvar mine by nearly 50% to 5.8Mt/y, Peruvian state news agency Andina reported.
The start of the expansion studies was announced by Peru's mines and energy (MEM) minister Jorge Merino and Vale's local CEO Claudio Bastos.
The project's goal is to install a new plant in Piura for the processing of phosphate rock, similar to the one already operating at Bayóvar.
"Piura has a strategic location and its future is promising. There are plans to boost production in Talara and Sechura in oil and gas, which can become the starting point for the development of the northern macro-region," Merino said.
The Bayóvar expansion is still in the study phase, according to Bastos, who declined to say how much the expansion would cost.
"We employ around 60% local people. We aim to help Piura's development and are committed to produce here by fully respecting the environment," he said.
Vale began operations at Bayóvar in July 2010 with a US$570mn investment. The mine has production capacity of 3.9Mt/y and reserves of 238Mt of phosphate.
Bayóvar is controlled and operated by MVM Resources International. Vale has 40% of MVM, while Minnesota-based fertilizer manufacturer Mosaic (NYSE: MOS) holds 35% and Japan's Mitsui 25%.
However, the Brazilian firm has control of Bayóvar with 51% of the voting shares.
Vale has been developing projects and acquiring fertilizer assets with the goal of becoming one of the world's largest producers over the next six years. Vale's annual output targets for 2017 are approximately 10.7Mt of potash and 19.2Mt of phosphate rock.