Pacific Potash risks mining rights in Brazil over $2.1 million tax debt
Canadian Pacific Potash Corporation (TSX-V:PP) may be facing an imminent cancellation of its mining rights in Brazil as the junior miner has not paid about US$2.1 million (R$6.86m Brazilian Real) to the country’s National Department of Mineral Production (DNPM).
According to Noticias de Mineracao (in Portuguese), this is not the first time the company’s rights for its Amazonas project in Brazil, one of the largest consumers of the fertilizer ingredient, have been at risk of being revoked. The same happened in December and the company responded at the time it had wired the due funds, but that its Brazilian office had not received them for “unknown reasons.”
No one at Pacific Potash was available to confirm or deny today’s report when this article was being written.
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.