Aguia Resources has executed a pivotal agreement that will significantly alter the landscape of Brazil's phosphate industry. In an exclusive development, Aguia has secured a binding 10-year lease for the strategically located Dagoberto Barcelos (DB) processing facility near Caçapava do Sul, Rio Grande do Sul, a move that positions the company to challenge the dominance of imported phosphates in Brazil. This deal represents a major milestone for Aguia, marking a decisive step towards establishing itself as a leading domestic phosphate supplier.

The lease agreement, valued at around BRL$162,000 per month with a one-off payment of BRL$5 million, grants Aguia immediate access to an operational fertilizer processing plant. This strategic acquisition bypasses the substantial time and capital expenditure associated with constructing a new facility, enabling the company to accelerate its production timeline. Processing is slated to commence in Q3 of this year, with an initial capacity of 100,000 tonnes per annum (tpa).

This move is particularly significant given Aguia’s recent legal victory, which has cleared the path for its Três Estradas phosphate project. After overcoming three years of legal challenges, Aguia can now leverage its Pampafos rock phosphate resources to supply the DB plant. Furthermore, the company is rapidly advancing the evaluation of its nearby Mato Grande and Passo Feio deposits, which hold the potential to drastically reduce transportation costs and enhance profit margins by up to $10 per tonne. This proximity is a critical advantage for the chemical industry, minimizing logistical hurdles and ensuring efficient resource utilization.

The DB plant, with its established operational history, offers substantial expansion potential. Aguia plans to implement strategic upgrades, including a hammer mill and a second drying unit, to triple the plant’s capacity to over 300,000 tpa. This expansion initiative represents a cost-effective alternative to constructing a new facility, saving the company millions in capital expenditure. Aguia is also actively pursuing additional processing facility leases within the region, indicating a clear strategy for aggressive growth.

Aguia’s Pampafos organic phosphate offers a distinct advantage over imported chemical alternatives. Its natural composition enhances crop performance while mitigating soil degradation, aligning with the growing demand for sustainable agricultural practices. Executive chairman Warwick Grigor emphasizes the company’s confidence in capturing a significant market share, capitalizing on Brazil's heavy reliance on phosphate imports, primarily from North Africa. By providing a locally sourced, high-performance product at a competitive price, Aguia is poised to disrupt the existing market dynamics.

This strategic processing deal, coupled with the resolution of legal challenges and the development of new phosphate deposits, solidifies Aguia Resources’ position as a key player in Brazil's phosphate industry. The company’s focus on sustainable, high-quality phosphate production positions it to capitalize on the nation’s drive for agricultural self-sufficiency and long-term food security.