ASX-listed Aguia Resources is dusting off a massive phosphate project in Brazil, with a new government initiative aimed at weaning the agricultural powerhouse off imported fertiliser providing the perfect tailwind to revisit the asset.
The company has announced it will re-assess its Lucena phosphate project, which already hosts a whopping JORC-inferred mineral resource of 55 million tonnes grading 6.42 per cent phosphorus pentoxide.
Aguia hold 16 licences in Paraíba, a state in the country's northeast. Twelve are awaiting approval to progress to feasibility while the other four are expected to enter a second exploration phase. The company intends to restart the administrative process with the National Mining Agency to secure licence extensions for the project.
In addition to the significant phosphate endowment, exploration has also outlined a stand-alone limestone resource of 41.4 million tonnes, adding another string to Lucena’s bow.
The move comes just days after Brazil’s federal senate approved the Fertiliser Industry Development Program (Profert), a major policy push designed to support domestic fertiliser production and reduce the nation’s heavy reliance on imports. While the bill still requires presidential assent, it signals a significant policy shift that could breathe new life into local projects such as Lucena.
Brazil is one of the world’s agricultural giants. However, it's heavily dependent on imported fertilisers, sourcing more than 80 per cent of its requirements from offshore, creating a strategic vulnerability the Profert program aims to address. The five-year initiative, backed by a R$10 (A$2.69) billion budget, is expected to offer tax credits and introduce local-content requirements for fertiliser blends. The new rules would mandate a minimum domestic content starting at two per cent and rising to 10 per cent by 2037, creating powerful incentives for local producers.
Aguia’s project sits 40 kilometres south of the state capital, João Pessoa. The existing resource was defined by 49 diamond drill holes completed back in 2011-12 and covers only a fraction of a broader project area first identified by the Brazilian Geological Survey in the 1970's.
Aguia Resources managing director and chief executive officer Timothy Hosking said: “Lucena provides a complementary growth opportunity in north-east Brazil at a time when the country is seeking to expand domestic fertiliser production and reduce reliance on imports. We believe Aguia’s domestic project portfolio may be well positioned to support potential strategic interest from fertiliser importers.”
The decision to revisit Lucena is set to complement Aguia's existing in-country operations. The company is already an active producer in Brazil’s fertiliser market, having recently commissioned its Três Estradas phosphate project in the southern state of Rio Grande do Sul. The project is underpinned by a massive JORC-compliant measured and indicated resource of 83.21 million tonnes grading 4.11 per cent phosphorus pentoxide.
The Três Estradas plant is already running ahead of expectations, with the company recently locking in a whopping A$2.3 million in sales of its “Pampafos” organic phosphate product within just six weeks of commissioning. The plant features a capacity of more than 200,000 tonnes per annum.
The early sales success suggests a clear local appetite for domestically produced fertilisers, particularly products such as Pampafos, which are well-suited to the region’s acidic soils. In addition to its growing fertiliser business, Aguia is advancing its Santa Barbara gold operations in Colombia, with the June quarter showing grade and recoveries tracking up and mine development progressing well.
The company’s forward plans for Lucena include technical and agronomic test work to assess its potential for various product applications, including direct application as a natural phosphate. Aguia has also flagged the potential for additional infill and extensional drilling to better define the mineralisation and upgrade the resource to the higher-confidence measured and indicated categories.
With one phosphate operation already ringing the till in southern Brazil, Aguia now appears to be doubling down on its domestic fertiliser strategy. As Brazil rolls out the red carpet for local producers, the move to dust off the massive Lucena project seems to be a case of shrewd timing. All eyes will now be on the progress of its licence extensions, which could be the key to unlocking a significant second phosphate production hub in north-east Brazil.
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By Murray Ward
