Rio Tinto to build Argentine mine

BUENOS AIRES - The world's No2 miner, Rio Tinto, expects to start building a US$735 million ($1.19 billion) potash mine in Argentina starting in early 2007, the company said today.

The Potasio Rio Colorado project, straddling the border between Argentina's west-central provinces of Mendoza and Neuquen, is seen producing between 1.6 million and 2.4 million tonnes of potash a year.

Construction will take two years and employ some 1600 workers, according to Argentina's Mining Secretariat, which issued a statement after government officials met with Rio Tinto officials to discuss the project.

Canada, Russia and Belarus are the world's top potash producers, followed by Germany, Israel and Jordan. But given the remote location of many reserves, Argentine potash could compete in the United States, China or India, Rio Tinto told Reuters in an interview last December.

Argentina's top buyer is likely to be neighbouring Brazil, the world's No. 3 market for potash, which is used mainly as fertilizer to replenish potassium in soils. Brazil is the world's No2 soybean producer and No. 1 sugar cane grower.

Rio Tinto plans to finish a final feasibility study on the Rio Colorado project in late 2006, according to the Anglo-Australian company's website.

- REUTERS