Vale seeks $500 million IADB financing for potash project

Brazilian giant miner Vale (NYSE: VALE) is about to close a $500 million loan agreement with the Inter-American Development Bank (IADB) for its Rio Colorado potash project in Mendoza, Argentina.

According to BNamericas (subs. required) a Vale’s spokesperson said the possible financing involves two tranches, a $200 million one and a $300 million portion.

The world’s largest iron miner has been making recent efforts top diversify its production.  In fact, the company has repeatedly said it is planning to become a top player in the global potash market by 2015.

The world’s second-largest mining company is investing about $6 billion to develop its Rio Colorado potash mine in the province of Mendoza. The project includes a railway, a power plant and a port.

Construction at the site, which the Rio-based company bought from Rio Tinto PLC in 2009, it is projected to begin in December and be fully operational by January 2014.

The Rio Colorado project will make Argentina the world’s fifth-largest potash producer, according to the IADB.