SAO PAULO - The cost to produce potash from a mine being developed in the Brazilian Amazon will be similar to Russia's and lower than in No. 1 producer Canada, said the CEO of Brazil Potash, citing a third-party assessment used in a company presentation.

The economics of the project -- which faced a protracted licensing process involving multiple government agencies and Indigenous consultations -- has drawn analysts' attention after the price of potash fell sharply from highs above $1 000 per metric ton amid the threat of sanctions against Russia and Belarus in 2022, compared to the current level just above $300.

That, and new mining projects emerging in Canada and Laos, would likely keep a lid on prices, they said.

"All in, our cost to mine, process and deliver the potash to farmers in Mato Grosso state will be $130 per ton," CEO Matt Simpson said in an interview on Monday, breaking down production cost in Brazil at $80 per ton and transportation at $50 per ton.

According to a separate price assessment, Russia's extraction cost is estimated at $50 and Canada's at $80, Simpson said.

Brazil relies on imports for nearly 100% of supplies, which come from nations like Canada and Russia.

Simpson noted freight tied to potash imports alone was higher than the total cost for the company, whose mine is significantly closer to local farmers.

In a presentation sent to Reuters, the company's potash price in Brazil was forecast to be $459 on a cost-and-freight (CFR) basis, which seemed high to analysts who spoke to Reuters.

Simpson said that projection should be understood as an average over the mine's life span, conservatively calculated at 23 years. He also cited 15 million tons of additional global demand for potash in the next eight years.

"There's going to be a six-to-seven million ton shortfall in new supply versus demand that is going to cause a structural shift up of roughly $100 a ton," he said, predicting Brazil's potash price could be $400 or $500 by 2032.

Brazil Potash aims to produce 2.4-million tons per year, a fifth of national demand, and will target Mato Grosso farmers primarily.

The company also hopes to make direct sales, eliminating blenders, which Simpson said charge $50 to $70 premiums from buyers.

Production at the Amazon mine, which has 4 of 11 required licenses to complete construction, is scheduled to start in 2029, Simpson said.