Rio Tinto gets 40% of JV with Acron in Canada, may raise stake to 80%
MOSCOW. April 2 (Interfax) - Mining giant Rio Tinto has acquired a 40% stake in a joint venture with Russian fertilizer producer Acron to develop potash fields in Canada, Acron chairman Alexander Popov told reporters.
"Rio Tinto owns 40%, we have 60%. Rio Tinto has the option to increase its stake to 80%," Popov said.
He said even a 20% stake in the venture would make it possible, given forecast production volumes, to cover the current raw material needs of the Acron group's two plants, OJSC Acron and OJSC Dorogobuzh (about 450,000 tonnes per year).
The productive seams at the fields in Canada lie at a depth of 1,000-1,200 meters, while in Russia's Perm Territory they are at a depth of 350-400 meters. "But the seams in Canada are richer, wider. That is, current production costs in Canada will be lower, but capital expenditures will be slightly higher," Popov said.
He also said that Acron plans to develop two projects in Canada, while the remaining projects (five licenses) have been put up for sale.
Potash production in Canada could begin in 2018, Popov said.
North Atlantic Potash Inc., OJSC Acron's subsidiary in Canaday, and Rio Tinto signed a joint venture agreement on developing potash prospects and possible mine construction. The agreement concerns North Atlantic Potash's permit holdings in the southern part of Saskatchewan's potash district.