Brazil Potash inks $200M MOU to power Autazes project

Brazil Potash (NYSE: GRO) has signed a memorandum of understanding (MOU) with private equity firm Fictor Group outlining the terms of a $200 million infrastructure funding for its Autazes potash project, with the aim of securing a long-term energy supply for the mine.

After facing headwinds due to some opposition by Indigenous groups, the state of Amazonas granted Brazil Potash last year the license to build the Autazes project, pegged to be the largest fertilizer mine in Latin America within the Amazon rainforest.

Under the terms of the MOU, Fictor Energia, Fictor’s infrastructure division, would undertake complete development, permitting, construction and operation of a 102-mile-long power transmission line that could supply 300MW per year of 80% renewable-sourced Brazil grid electricity for the Autazes project.

The project will be done through a “build, own & transfer” model, which would see Brazil Potash gain ownership of the power line and associated substation after 25 years of operation.

Fictor will assume full responsibility for the $200 million power transmission capital expenditure, removing this major infrastructure investment from Brazil Potash’s construction budget.

The Brazilian group also plans to invest $20 million into Brazil Potash in two tranches: $2 million upon signing of the definitive partnership agreement; and $18 million upon receipt of the power line installation license.

The parties will work toward the execution of definitive agreements, with Fictor Energia immediately beginning preliminary engineering and regulatory processes.

The power transmission infrastructure would be expected to be completed and operational by July 2029, aligning with the Autazes project’s planned production timeline, Brazil Potash said in the news release.

The proposed mine and processing facilities in Autazes, 75 miles (120 kms) southeast of the Amazonas state capital Manaus, would require about three years to build, the company has said.