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Vale suspends major potash project: Implications for all players

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Brazil's Vale ( VALE , quote ) never one to shy away from a chance to waste some capital, has decided to scuttle one of the major potash projects in the world.

[caption align="alignright" caption="Vale headquarters, Brazil"] [/caption]

The $6billion Rio Colorado in Argentina not Colorado, Colorado was cited as an unnecessary drain in the company's cash position (Bravo).

It's also a large greenfield project that quite frankly isn't viable at current prices and while this event is not a major surprise, it is still positive for long-term outlook of the potash industry.

There are also indications that BHP Billiton's ( BHP , quote ) is about to delay a major project. The supply demand balance is coming more in order for an industry that was starting to get carried away with the "food scarcity" trade.

Yesterday's announcement has implications for not only VALE, but also Potash Corporation ( POT , quote ), Mosaic ( MOS , quote ), Agrium ( AGU , quote ) and North American players.

Vale suspends major potash project: Implications for all players

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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