Agriculture is believed to be the earliest occupation of a man, it is the foundation of all other industries as it supports the entire planet, while some rightly consider that agriculture is one of the key sources of national prosperity.
Many amongst us might not agree with this due to various reasons. You can see how far we may have come with the advancements in technology and unprecedented innovation, yet nothing can replace our dependence on the agricultural produce.
Given this backdrop, we also need to understand the importance of the industries that support agricultural activities, like fertilisers, equipment, etc. Moreover, as we funnel down to understand some basic and highly crucial elements for agricultural production, we come to know that ample soil contents are a major component.
Need for Phosphate
Amongst the many soil components that are imperative to ensure quality in the agricultural produce, Phosphate content is a key element.
Other than potassium and nitrogen, phosphate is the third essential element in fertilizer production and plays a vital role in photosynthesis while being significant in growth and energy supply, especially in plants.
Over the years, we have been cultivating land, and the phosphate content in the soil has been depleting. The diminishing phosphate content has led to low yield and poor-quality crop cultivation and pastures thus requires replenishing and restoring in the soil.
The need for improving phosphate levels is not only for agricultural benefits and conservation of the soil but also for the wellbeing and economic security of the people as well as of the economy.
Opportunity for Businesses
On the country’s agricultural environment, Brazil is considered as an agricultural powerhouse across the world, as its climate, large tracts of arable land and a ready supply of freshwater offer key ingredients for an abundant food supply for its 200+ million population.
The extensive agricultural activities undertaken in Brazil are validated by the fact that Brazil is the third-largest agricultural exporter in the world with leading producer of soybeans, coffee, and sugar. In addition to this, the country’s richest agricultural assets are hosted in Southern Brazil.
In a world where food shortages are predicted specially amid COVID-19 outbreak, Brazil presents a significant opportunity for the businesses. Moreover, as the world population is rising, the demand for agricultural products is increasing simultaneously. Businesses across the globe have a lucrative opportunity of venturing into agriculture-related enterprises such as production of phosphate, especially in major farming regions of the world like Brazil.
Prospective Company in the Region
One of the companies that has secured valuable phosphate deposits and prospects covering 334km2 in the middle of prime farming land in Southern Brazil is Aguia Resources (ASX:AGR). The Company is predominantly driven by the activities related to development of its phosphate assets and advancing its portfolio of copper exploration assets. AGR has an established and highly experienced in-country team with key projects located in the State of Rio Grande do Sul, Southern Brazil which is a prime farming area 100% dependent on phosphate imports.
AGR’s deposits in the state of Rio Grande are ideally located with proximity to road, rail, and port infrastructure and showcase characteristics of high quality and low-cost productions.
While AGR has been progressing well towards advancement of its phosphate projects in Southern Brazil, the Company currently stands in the pre-production stage of a cost-effective natural phosphate fertiliser project which is expected to be operational in early 2022.
Developments at AGR’s Project
An independent Scoping Study for its 100%-owned Três Estradas Phosphate Project has revealed excellent economics, very low Capital Expenditure and fast pay?back at the project. Major results from the scoping study revealed earlier are as below:
Source: Aguia's Reports
AGR has obtained Preliminary License (LP) on 17 October 2019 for the development of the Três Estradas Phosphate Project, soon after which the Company initiated the work towards obtaining of the Installation License which authorizes the construction of the project according to detailed plans and specifications, including the programs and control measures detailed in the Preliminary License.
While progressing towards project advancement, the Company concluded a detailed evaluation of all properties covering the project and then carried out a valuation of the same in the project area.
The Company has chalked out its milestones for future advancement of the project and looks forward for approval from government agencies such as ANM and/or FEPAM. The company believes that these approvals are crucial for the advancement and could influence the timing of key milestones.
Aguia has been making excellent progress, and with encouraging support from the local community and relevant local authorities, Aguia looks forward to emerging as a strong, domestic phosphate producer making a contribution towards the growth and development of Brazil’s agribusiness sector.
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