Brazil Potash (GRO) Status Update summary

Project progress and strategic vision

• Construction of the Autazes potash project is underway, with major works starting soon, including archaeological and environmental activities as part of licensing requirements.

• The project aims to produce 2.4 million tons of potash annually, supplying about 17% of Brazil's demand and reducing reliance on imports.

• All key permits for construction have been secured, and the project enjoys strong support from government, local communities, and Indigenous groups.

• Recent board additions bring deep industry expertise, enhancing leadership and strategic relationships.

• The project is positioned as a transformative, low-cost, and sustainable domestic source of potash for Brazil's agricultural sector.

Commercial and financial updates

• Long-term offtake agreements have been signed, including a 15-17 year contract with Amaggi and an MoU with Keytrade, targeting 2-2.2 million tons under contract.

• Financing strategy includes $1.7 billion in debt, $200 million from power line carve-out, $150 million from royalty, and the remainder from equity.

• Discussions are ongoing with international finance institutes, export credit agencies, and potential anchor equity investors, including sovereign wealth funds.

• Carving out power line construction is expected to reduce CapEx by $200 million.

• First ore extraction is targeted for 2028, with processing in 2029 and ramp-up in early 2030.

Market and industry outlook

• Brazil imports 98% of its potash, much from geopolitically sensitive regions; domestic production will reduce exposure to global supply shocks.

• Recent geopolitical developments, including potential Russia-Belarus collusion and US tariffs, could significantly impact global potash prices.

• The project leverages a logistics advantage, reducing delivery costs by 71% compared to imports, and expects to generate $1 billion in annual EBITDA at full production.