ASX-listed Aguia Resources has secured an operating licence for the Tres Estradas phosphate project in Rio Grande do Sul, Brazil, allowing the company to mine and process phosphate for sale into the local market.

Securing the operating licence is Aguia’s most significant and material milestone to date, the company says, adding that it establishes the operation as one of few domestic sources of supply that can replace imported product.  

Brazil is heavily dependent on phosphate imports, importing about 85% of its yearly requirement, or about 45-million tonnes. The phosphate market is, however, currently experiencing severe supply disruptions and higher pricing. As such, Aguia’s status as a domestic phosphate producer is significant.

Aguia has already mobilised mining equipment on site, with operations now focused on removing topsoil and extracting high-grade blocks in the north-eastern areas of the pit. The company expects first material in the processing plant by the first week of June.

Aguia has about 70% of its anticipated output for the year committed to non-binding offtake agreements, including 44 000 t of product for major commercial farms and cooperatives in Brazil and Uruguay.

“With all environmental approvals now secured, we are ready to begin operations, build stockpiles, and start processing through our plant at Caçapava do Sul.

“Over the past two years, our strategy has been consistent: advance the project based on a low capital and operational expenditure model that enhances project returns and therefore delivers shareholder value,” MD and CEO Timothy Hosking says.

He mentions that the company has delivered on that approach by securing an existing processing plant, which has been refurbished extensively, and contracting respected and capable mining and logistics services groups.

Having focused on efficient, scalable development, Aguia is poised to enter production with minimal capital requirements.

“We will keep shareholders updated on the progress of mining operations and the processing and bagging of the first quantities of our Pampafos phosphate in early June,” Hosking concludes.