BRASILIA, June 18 The Argentine province of
Mendoza has suspended a $4.6 billion potassium project of
Brazilian mining giant Vale (VALE.N)(VALE5.SA), saying it has
not complied with local regulations.
The project could convert Argentina into one of the world's
top 5 potassium producers.
The government of Mendoza, a province in the far west of
Argentina, said in a statement posted on its website on Friday
that Vale did not comply with a local labor law and failed to
provide sufficient information on its investment plan.
"As government, we need a series of data to be able to act
as watchdog and ensure the compliance of agreed requirements,
such as purchases and hiring of local workers," the Mendoza
government said in its statement.
"If the miner arrives in Mendoza without understanding this
concept, it shouldn't carry out this type of project," the
The suspension would be lifted as soon as Vale complied
with the requirements, the Mendoza government said.
Vale was not available to comment on Saturday but in a
statement on Friday denied any irregularities and said it would
provide any additional information required.
The Rio Colorado project, which is scheduled to start
operations in the second half of 2013, has an initial
production capacity of 2.4 million tonnes of potassium per year
and a total cost of around $4.6 billion.
(Reporting by Hugo Bachega; Writing by Raymond Colitt; Editing
by Bill Trott)