BUENOS AIRES, March 21 An Argentine court has
ordered Brazilian miner Vale SA to refrain from
dismantling its Rio Colorado potash project, which the company
suspended last week saying it was no longer viable, a provincial
government said on Thursday.
Vale, the world's No. 2 miner, says the estimated $6 billion
project has been hit by soaring costs it attributes to
Argentina's rampant inflation and controlled exchange rate, in a
row that is threatening to renew trade tensions between South
America's two largest economies.
The Argentine government says Vale is demanding unrealistic
tax breaks, and has barred the company from firing at least
6,500 workers and subcontractors on the fertilizer project.
The government of Mendoza province said on its website that
a provincial court had agreed to a petition filed by Argentina's
main construction trade union, and ordered Vale to "abstain from
... dismantling installations (and) removing tools, machinery
and other work implements" from Rio Colorado.
A spokesman for Vale in Argentina was not immediately
available to comment.
A source with direct knowledge of Vale's plans told Reuters
previously that the company, the top global producer of iron
ore, plans to sell the fertilizer project to recoup the $2.2
billion it has invested so far.
Vale may also try to develop potash mines in Brazil and
Canada that it had put on hold to find new sources of the
mineral, a source of potassium needed for Brazil's giant
Brazil, the largest global producer of coffee, orange juice
and beef, imports about 90 percent of its potash needs from as
far away as Canada, Jordan and Russia. The government had been
counting on new supplies from Argentina.