Plans to reduce dependence on fertilizer imports do not move forward in Brazil

By Aline Rechmann

Brazil’s dependence on fertilizer imports has been debated for decades and gained prominence again after vice-president and Minister of Development, Industry, and Foreign Trade Geraldo Alckmin defended potash exploration in the Amazon.

In a recent meeting of the Administrative Council of the Superintendence of the Manaus Free Trade Zone (Suframa), he said that the mine in the Amazon “can be one of the biggest investments in the country” and can be an opportunity for Brazil to reduce its dependence on potash imports – currently 98% of what the country needs comes from other countries.

The Minister of Agriculture, Carlos Favaro, also showed interest in the topic by defending that the production of fertilizers is a matter of national security and said that President Luiz Inácio Lula da Silva (PT) has determined that Petrobras resumed production of the input.

He made these statements in an interview with the O Globo newspaper during his first days as head of the portfolio.

In the interview, Favaro also said that Petrobras should resume the construction of three fertilizer plants in the country.

The exploration of agribusiness minerals in Brazil, considered strategic for agribusiness, also generated concern at the beginning of 2022, with the fertilizer crisis triggered by the war between Russia and Ukraine.

With the conflict, 50% of potassium imports from Russia and Belarus, for example, were compromised.

The high percentage of imported inputs for agribusiness almost compromised the Brazilian harvest last year.

However, former President Jair Bolsonaro’s visit to Russian President Vladimir Putin a few days before the start of the war with Ukraine helped maintain fertilizer shipments to Brazil.

The action of former Agriculture Minister Tereza Cristina (PP-MS), currently a senator, to negotiate with Canada also contributed to the maintenance of fertilizer supplies.

Brazil is the only agricultural pole that depends on fertilizer imports, according to Carlos Cogo, partner director of the consultancy Cogo.

Despite Alckmin’s signaling, Foreign Minister Mauro Vieira highlighted the commercial partnership with Russia to supply chemical fertilizers to Brazilian agribusiness.

“A quarter of the fertilizers used in Brazil are of Russian production. We have dealt with an agreement to guarantee the flow of this vitally important input for our agriculture,” Vieira said after meeting with Russian Chancellor Sergei Lavrov on April 17.

THE ABSENCE OF STRATEGIC PLANS SLOWS DOWN THE SECTOR

During the 2022 crisis, the Bolsonaro government presented the National Fertilizer Plan (PNF). Aiming to reduce foreign dependence, the plan sought the implementation of legislative proposals to facilitate the production of the inputs in the country.

However, this was not the first initiative of the Brazilian government over the decades.

Creating a regulatory framework for the potash sector has been debated since 2009.

At the time, Lula, in his second mandate, defended the need to regulate the sector.

The former Minister of Agriculture, Reinhold Stephanes, had already spoken about Brazil’s dependence on the sector and pointed out the need for more studies on potash exploration in Brazil.

He had received information from Falcon, a multinational mining company, that the world’s third-largest potash deposit was in the Amazon region.

At the time, Stephanes even claimed that Brazil’s self-sufficiency in potash could be achieved within ten years.

But the plans did not move forward. In 2010, Stephanes says he convinced Lula and Dilma Rousseff, then Chief of Staff, about creating a new regulatory framework.

Later, however, he left the ministry to be a candidate in the elections, and the new holder of the portfolio did not pursue the issue.

Upon taking office as a federal deputy in 2014, Stephanes filed Bill (PL) 8.065/2014, establishing the new legal framework.

The bill ended up being linked to another matter that deals with research and mining of minerals and never moved forward.

Years have passed, but the situation has not changed.

Bolsonaro’s National Fertilizer Plan has been on hold since the end of 2022.

So far, the government of Luiz Inácio Lula da Silva has not indicated the names of the new managers for the National Fertilizer and Plant Nutrition Council (Confert), the body responsible for coordinating and monitoring the implementation of the PNF.

Initially linked to the Secretariat for Strategic Affairs of the Presidency, Confert will be transferred to the Ministry of Development, Industry and Foreign Trade, headed by Alckmin, who will appoint its president.

The ministry led by Carlos Favaro will have a seat in the Executive Secretariat.

“Unfortunately, Bolsonaro did not advance on the matter. We don’t know why this has been put on hold if it is so strategic for the country”, says the agronomist engineer, Xico Graziano.

In an article published in 2015, he already warned about the “absence of an agricultural policy for the sector, with no long-term strategic plan”.

For Graziano, both in the case of the Regulatory Framework of Lula’s second term and in the more recent case of the National Fertilizer Plan, not moving forward on the issue generates “a loss of sovereignty stolen by government negligence.

There is a lack of planning for the future of our country.

LACK OF KNOWLEDGE OF BRAZILIAN GEOLOGY HALTS ADVANCES IN EXPLORATION

The spokesperson of the Brazilian Mining Institute (Ibram), Rinaldo Mancin, said Brazil first needs to expand its knowledge about the territory’s geology.

“So far, we have only had a focus on the crystalline soil that houses the metallic materials. We need to know more about the sedimentary terrains.”

Mancin points out that the greatest proof of the need for investment in research is that the potassium reserves discovered recently were found in studies that targeted oil.

The statement is proven in a survey published by the Geological Service of Brazil (CPRM), an institution linked to the Secretariat of Geology, Mining, and Mineral Transformation (SGM) of the Ministry of Mines and Energy (MME), in 2020.

The study, motivated by the growing Brazilian demand for potash, pushed the government to leverage new discoveries in the Amazon Basin and was based on information provided by the National Agency of Petroleum, Natural Gas and Biofuels (ANP).

“We have only about 3% of the territory adequately mapped. We defend the public-private model to accelerate the search for more geological knowledge.”

“We still have precarious information. Brazil has to increase its knowledge of these areas”, pointed out the Ibram spokesperson.

Despite the potential already mapped, currently, only one potash mine is exploited in Brazil.

It is the Taquari-Vassouras Mining Complex in Rosário do Catete (SE), discovered in 1963, but with exploration only started in the mid-1980s.

Since 2017, the exploration operation was purchased by Mosaic Fertilizantes.

Recently, the company announced investments of approximately R$800 million to maintain the extraction of sylvinite, an ore used in potash processing, with an expected extension of the operation for at least until 2030.

INTERLOCUTION OF THE SECTOR WITH LULA’S GOVERNMENT

Entities linked to mining, fertilizer producer associations, and companies have sought out the current government to address the sector’s demands.

The Brazilian Association of Producers of Soil Remineralizers and Natural Fertilizers (Abrefen), which participated in the Technical Chamber of Emerging Chains of Confert during the Bolsonaro government, sought the Ministry of Agriculture for a meeting with Fávaro from the Lula government.

Although he has not yet received a return on the agenda, Abrefen’s president, Frederico Bernardez, believes that the government should take measures in response to the demands exposed by the entity.

“We are waiting with other entities for an opportune agenda to align with the minister Carlos Fávaro.”

“But, from previous conversations, we strongly believe in the possibility of reducing dependency and in the possibility of this current government helping and supporting the development of public policies in this sense”.

Despite recent statements from the Minister of Agriculture highlighting the importance of potash exploration, the ministry’s role in the debate has not yet been defined.

In an attempt to contact the ministry on the subject, the report was directed to the Ministry of Mines and Energy and did not get a reply.

On another front, Ibram is seeking an agenda with Alckmin to discuss, among other issues, the issue of fertilizers.

“We need a big national effort in this matter. An important part comes to offer fertilizers to our society”, highlighted Rinaldo Mancin from Ibram.

During a visit to Manaus, the Minister of the Environment, Marina Silva, was questioned about the reason for potassium exploration “being blocked by incongruities in environmental issues”.

“We have to think that it [project] has to have economic, social, and environmental viability.”

“When you try to make all these issues viable, it’s not that it is blocked; it’s that you have to solve the problem,” justified Marina.

AUTAZES POTASH PROJECT

The Autazes Potash Project foresees the exploration of a location close to indigenous lands and, therefore, needs to go through a pre-consultation process with the indigenous people, which is part of the environmental licensing.

According to the company Potash do Brasil, it can elevate the state of Amazonas to the level of the largest potash producer in Brazil.

Executives from the company have already met with Alckmin to present the project.

The undertaking, currently in the environmental licensing phase, has an estimated life span of approximately 23 years.

Also, according to the company, “When it reaches an average annual production of 2.2 million tons of Potassium Chloride, the supply of this input will correspond to about 20% of the volume consumed in Brazil.”

Preliminary studies indicate, however, a potential for increasing production capacity, which could reach up to 45% of the Brazilian needs.

However, the Federal Court has questioned the project for allegedly violating this stage.

In 2016, the MPF had already asked the Federal Court to suspend the Amazonas Environmental Protection Institute (Ipaam) license to the company Potássio do Brasil for research and exploration activities in the Soares/Urucurituba territory.

With information from Gazeta do Povo