TORONTO (miningweekly.com) – Brazil-focused fertiliser development firm Verde Potash on Tuesday said the Brazilian government would help fund construction of its flagship Cerrado Verde project, located within the country’s largest agriculture market.

The company announced that the project was selected to receive financing from a special financing programme of the government.

“Inova Agro's decision is immensely important not only for Brazil, but for the world's population, ever so reliant on Brazil's food production. Thanks to a ground-breaking funding programme in the agriculture sector, Brazil takes a step towards reducing its economy's debilitating dependency on imported potash," president and CEO Cristiano Veloso said.

Inova Agro is a Brazilian government programme intended to fund innovative projects in the agriculture sector, including those focused on fertilisers. Selected projects would be considered for subsidised interest rates, equity investment and non-reimbursable project investment grants from the Brazilian Development Bank and/or the Financing Agency for Studies and Projects, both of which are arms of the Brazilian government with a mandate to support domestic projects.

The total funds to be distributed by Inova Agro were budgeted at R$1-billion (about C$450-million). Verde expects to receive about 90% of the funding required for the construction of a ThermoPotash plant.

The proposed 1 000 t/d first-phase plant would produce the company’s new ThermoPotash product and would also seek performance guarantees for a large-scale potassium chloride (KCl) kiln.

Verde last year announced that IBD Certifications, the largest certifier in Latin America and the only Brazilian certifier of organic products with global credentials, had approved its ThermoPotash product for use on organic crops.

Traditional potash, or KCl, is not certified for use on organic crops and is, therefore, not an option for organic farmers.

Verde’s ThermoPotash is a controlled release, non-chloride multi-nutrient potash fertiliser that had been developed by Verde, and which the company aimed to produce in the first phase of its Cerrado Verde potash project, in Minas Gerais, Brazil.

The company said it aimed to sell ThermoPotash to the local Brazilian organic crops market, which was selling its produce at a premium price. This spurred organic farmers to devote significant resources to accredited crop inputs that drive higher yields.

The market for Brazilian organic products in 2012 was valued at about $385-million, according to Instituto de Promocao do Desenvolvimento (IPD). IPD predicted sales growth for this market of 20% to 25% a year over the next five years, with 2014 sales of $440-million. Brazil’s main organic crops included sugar, palm oil, fruits and juices.

The midday news sent the company’s TSX-listed stock soaring C$0.36 a share to an intraday high of C$0.92.