Pacific Potash mining rights in Brazil jeopardized over unpaid tax
Canadian Pacific Potash Corporation (TSX-V:PP) mining rights in Brazil could be revoked as the company failed to pay taxes due in early December.
The Vancouver-based miner said in a statement late Monday it did not receive the funds wired to its offices in Brazil for unknown reasons, which caused the firm to miss a tax payment due to the country’s National Department of Mineral Production (DNPM).
As a consequence, the company added, its mining rights for its Amazonas project in the country, one of the largest consumers of the fertilizer ingredient, may be revoked.
Brazil is a key market for the potash sector as the country imports the vast majority of the fertilizers it needs. This creates a significant opportunity for domestic producers with lower transport costs, such as Pacific Potash.
While the country has 30% of the world’s arable land, the soil in Brazil is naturally potassium deficient, and all the major crops it grows require substantial amounts of potash.
The nation is attempting to reduce imported potash dependency from 93% to 60% over the next five years, with the government streamlining processes for exploration and development of target areas.
Pacific Potash doesn’t want to miss the boat and said the new management team for the company is working to resolve the payment issue as soon as possible.