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Verde commissions and starts up new processing plant

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World Fertilizer,

Verde AgriTech Plc has announced that it has successfully commissioned and started up its processing plant.

The plant has a capacity of 45 tph of Super Greensand® fertilizer, and is located in the municipality of São Gotardo, Minas Gerais, Brazil. Verde claims that the construction was on budget and on schedule.

The facility is operated by 10 professionals on an 8-hour shift that can be expanded as demand picks up. The current design of the plant enables operation in dry conditions only, during the dry season from April to October. The period of production coincides with the period of heightened demand for Verde’s production.

Originally, the facility was budgeted at US$500 000. However, the total investment reached US$600 000 because the company advanced part of the ground work necessary for an expansion to reach the 600 000 tpy capacity projected for Phase 1 in the pre-feasibility study (PFS).

In the statement, Verde claims construction and commissioning of the processing plant derisks the company’s production goals because it:

  • Tests mining and processing technologies, enabling optimisation for future expansions.
  • Allows for market validation of Super Greensand, creating commercial links and pricing strategy.
  • Makes full use of existing trial mining permit and environmental license. At the same time, Verde is advancing its request for the licenses needed for its expansions.

Cristiano Veloso, the President and CEO of Verde, said: “We are proud to see the culmination of years of research and work in the form of Verde’s own processing plant. We are successfully working on the market growth for Super Greensand in Brazil and abroad. As with any new product, there is plenty of marketing and information work to be done, two tasks to which we are devoting an increasing amount of effort. As we expand our markets, we will expand our production facility so that Verde can hit its full production potential in the near future.”

On 27 November last year, the company announced the results of its PFS. The study shows a post-tax net present value discounted at 8% of US$1.98 billion and internal rate of return of 290%.

Truckers' strike impacts the fertilizer sector

In May 2018, Brazil underwent a strike and lockout of highways. In order to appease the demands of the trucks, the Brazilian government has reportedly raised the price of freight through the establishment of obligatory price controls. In Brazil, most fertilizers are imported (95% of potash is imported) and need road freight from port to the agricultural lands in the country’s Midwest. The higher freight prices will increase direct freight costs and significantly reduce the benefits of backhaul (i.e. whereby truckers who deliver grain at port then usually return with fertilizer to farmlands). Verde’s mine and plant, however, are located in the heartland of the main agricultural area, over 700 km inland from the nearest port, therefore reducing freight costs to its end consumers.

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