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Argentina Signs $6.4 Billion USD Contract Allowing Brazilian Potassium Miner to Use Colorado River


Argentine President Cristina Fernandez de Kirchner last week announced a $6.4 billion USD agreement with Brazil’s Vale Mining Company for potassium extraction in the Colorado River basin in Mendoza province.

The project will position Argentina as the world’s third-largest producer of the mineral, Argentina’s Telam new agency reported on July 21.

“I believe this is the largest project in the world with regard to potassium, one of the fundamental nutrients for agriculture,” Kirchner was quoted as saying. The project includes construction of a railroad line that will traverse the country from west to east, terminating at the port of Bahia Blanca.

The agreement signed with Vale Mining stipulates that the extraction project will use water resources from the Colorado River. The company was granted authorization to use 1 cubic meter of water per second.

Colorado River basin in orange.

The Colorado River originates in the Patagonian mountain region and criss-crosses Mendoza, Neuquén and Buenos Aires provinces before emptying into the southern Atlantic.  Its flow averages 500 cubic meters per second, but at its peak levels, its flow rate can reach 11,000 cubic meters per second.

The provinces located in the Colorado River basin have expressed support for the project, highlighting the significant investment it would bring to the region. However, local NGOs have expressed concern about the possible impact of the project on local water resources.

The company will extract potassium chloride utilizing a “production by dissolution” process, in which hot water is injected at the site to dissolve the mineral compound for later refinement. Treatment of the used water used and other by-products are part of the process, the company said.

Vale Director Roger Downey told reporters: “The works are in full gear, [and] I have met with local authorities, and in every meeting the importance of the design for Argentina’s economy is strengthened.

The company expects production to reach 2.4 million tons per year.

Gas for the project will be supplied through an alliance between Vale and Argentinian gas and oil company YPF. The two sides are reportedly holding talks on another possible project involving shale gas extraction.