The government of the Argentine province of Mendoza is studying documents presented by Vale that could allow the Brazilian miner to continue with a 4.6 billion US dollars potassium project, said an official in Mendoza.
The Rio Colorado project was suspended late last week when the Mendoza government accused Vale of breaching local labour laws. Vale later said the company presented additional information that the Mendoza government had requested pertaining to compliance with local regulations.
We won't lift the suspension until we get to analyze in detail all the documents they have provided said a spokesperson for the Mendoza's government.
Mendoza's Hydrocarbons sub-secretary Walter Vazquez held meetings earlier this week with Vale executives in Buenos Aires in which the parties were due to discuss the reasons for the suspension and a timeline to analyze the documents.
Mendoza ordered the suspension of the project on grounds Vale may be breaching labour laws and because it failed to provide a timeline detailing the different stages of the investment.
The Mendoza official admitted the spat with Vale had become a sensitive issue, as provincial politicians jockey for position ahead of regional and presidential elections in October
However, the additional information requested by Mendoza was described as not complicated, and said the regional government is under pressure to promptly find a solution.
The Rio Colorado project, which is scheduled to start operations in the second half of 2013, has an initial production capacity of 2.4 million tons of potassium per year and a total cost of around 4.6 billion USD. The project could make Argentina one of the world's top five potassium producers.