TORONTO (miningweekly.com) – Project developer MBAC Fertilizer Corp on Thursday said it had started single super phosphate (SSP) powder production at its Itafós Arraias project, in Brazil, becoming the first large-scale fertiliser producer in the agricultural Cerrado area.

MBAC said it expected to be in a position to start delivering granulated SSP product to settle existing contracts later this month.

The company would also continue to refine the processes to improve the efficiency of the operations and the product quality in the ordinary course of ramping up the operations.

The company planned for the project to reach its nominal production capacity during the autumn of 2013.

The project had received the final operating licence from the Tocantins State Environmental Agency at the end of June.

The operation was expected to bring significant benefits for local farmers by supplying quality fertiliser with reduced logistics costs, as well as benefits to the community it serves with the attendant additional jobs, social programmes and infrastructure.

MBAC expected to sell between 175 000 t and 225 000 t of SSP this year at $280/t. The company expected to reach full capacity at Itafós in 2014 to produce 330 000 t of phosphate rock concentrate grading 28% phosphate, which would be mixed with sulphuric acid and reprocessed to produce 500 000 t/y of SSP.

The company believed SSP prices would likely rise to $325/t from 2014 onwards.

The $323.1-million project, which suffered from a 17% or $47.1-million cost blowout earlier this year, after an earlier $18-million cost overrun, held compliant reserves of 64.8-million tonnes grading 5.08% phosphate.

The openpit operation has a 19-year life, a net present value of $254.2-million and a 21% internal rate of return when using a 10% discount. Payback was expected in 4.5 years.