Brazil Potash lands offtake for giant Amazon project 

Brazil Potash (NYSE: GRO) says it has secured a 10-year commercial offtake agreement with mid-tier fertilizer company Keytrade of Switzerland for the Autazes project in the Amazon, the region’s largest.  

The binding agreement requires Keytrade to purchase up to 900,000 tons (816,500 tonnes) of potash annually from Autazes, more than a third of Brazil Potash’s potential annual output. The deal brings offtakes to 1.45 million tons or 60% of the project’s planned 2.4-million annual production after an agreement with Brazil’s Amaggi Exportacão E Importacão, one of the world’s largest privately owned soybean producers and exporters. 

“This agreement with Keytrade is a major milestone in Brazil Potash’s commercial development,” Brazil Potash CEO Matt Simpson said in a news release. “These long-term contracts provide the revenue certainty essential for securing project financing and advancing construction.”

The deal comes after the company signed an MOU with private equity firm Fictor Group last month outlining the terms of a $200-million infrastructure funding for Autazes. The memo concerns electricity generation and supply including a 300-megawatt capacity by 2029. It alleviated some of the costs for the $2.5-billion (C$3.48-billion) project and made Fictor a major shareholder. Autazes is expected to supply around 20% of the South American country’s potash demand.

The Keytrade deal’s financial terms weren’t disclosed. Potash’s global spot price hit $362.50 per tonne last month, according to the World Bank, a 21% increase from a year earlier. 

More deals 

Shares in Brazil Potash fell 7.8% on Friday morning in New York to $1.77 apiece, even as wider markets gained, valuing the company at $70 million. They’ve traded in a 52-week range of $1.25 to $15. 

“This collaboration with Brazil Potash is a strategic step toward reducing Brazil’s reliance on imports and fostering economic growth in the Amazon region,” Keytrade Fertilizantes Brasil CEO Anthony Jezzi said in the same release.

Brazil Potash said it is also in advanced discussions with a prospective partner that would increase total offtakes to 91% of annual capacity.    

Brazil Potash raised $30 million in an initial public offering last year. However, the project faces a renewed court challenge from government prosecutors to suspend its licence because part of the project is on ancestral lands of the Mura Indigenous people. The state of Amazonas issued the license to build Autazes last year. 

Demand for high-efficiency fertilizers is increasing potash’s importance when countries such as the U.S. and Brazil must import nearly all their needs. BHP (NYSE, LSE, ASX: BHP) at Jansen in Canada and Anglo American (LSE: GLEN) in the UK are pivoting into the material.