January 25, 2013 / 7:11 PM / 5 years ago

UPDATE 1-Vale could lose potash concession in Argentina-local gov't

BUENOS AIRES, Jan 25 (Reuters) - Brazilian miner Vale SA could lose its concession on the roughly $6 billion Rio Colorado potash project if it does not comply with an order to provide a new timeline within five working days, Argentina’s Mendoza province said on Friday.

On Thursday, Vale, the world’s second-largest mining company, said it extended vacation for workers at the Mendoza-based site, which began on Dec. 22, and did not have a date for work to resume.

In a statement on Friday, Mendoza’s provincial government said it ordered Vale to present a new timeline for the project or the concession could be considered “abandoned.”

Mendoza said it was taking this action to safeguard jobs on the project and protect the province’s mineral resources.

Vale declined to comment, a press office spokeswoman in Brazil said.

The company said previously the project was not suspended but it had extended vacation time while it “analyzes variations in the project’s economic fundamentals.”

In early December, Vale cut estimated 2013 capital spending by 24 percent after a global slowdown and a drop in iron ore prices led the company to rethink expansion. Two months before, it said it planned to sell underperforming assets to control costs and boost profit.

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