Disclaimer: This article has been paid for by Brazil Potash. See disclosures at the bottom of the page.
The world is in turmoil. Decades old trade deals are out the window. Agreements you could bank on, that you could set your retirement money to, risk being shattered into pieces on political whims.
Love him or hate him, US President Donald Trump has entire sectors on edge due to his tariff chaos. Automobiles. Aluminum. Food. Fertilizer. Nobody knows where it will lead – or end.
Here’s one thing we do know – when trade wars loom, there’s security in not crossing borders with your products. Make it at home. Grow it at home. Dig it up and process it at home.
Before this new era descended upon us, a collection of big banks, mining companies, and financiers made a bet on a potash company with operations in Brazil, at US$15 a share. That bet wasn’t a small one. In that financing they committed to spending millions on an operation to mine underground potash in Brazil, for Brazilian agriculture operations.
Why would they bother?
Because Brazil is one of the world’s largest exporters of agricultural goods – one in ten plates of food comes from Brazil – but it is highly exposed as the country imports over 95% of its potash, half of which is supplied from countries sanctioned or at war, including Russia, Belarus and Israel.
Potash is one of the three main nutrients used to grow food with no known substitute; it strengthens the stem of plants to make them more resilient to stress caused by several factors such as fluctuating temperatures, rain and insect bites.
Brazil Potash (NYSE-A:GRO), a NYSE-American-listed company advancing the Autazes Project in the Amazonas Basin, is taking aim at a long-standing vulnerability in the world’s food supply chain. Brazil is one of the only major countries increasing the amount of land it uses to grow food, has the highest amount of fresh water and year round warm climate supportive to grow three crops per annum whereas several other countries are limited to growing only one crop per year due to a cold winter season.
“Brazil is currently the world’s fourth-largest food exporter with highest growth rate, and yet the country imports nearly all of a critical fertilizer essential for high crop yields,” said Matt Simpson, CEO of Brazil Potash. “This is a strategic weakness Brazil’s Government and Brazil Potash are determined to solve.”
Potash Power and Political Risk
Potash, primarily potassium chloride (KCl), is a key fertilizer component used to enhance crop productivity all over the world. As the global population rises and food security becomes more urgent, the demand for potash has only grown. But the supply side of the equation is becoming more precarious, especially recently.
Global exports are dominated by a handful of countries: Canada, Russia, and Belarus collectively control over 80 percent of global potash exports. The Russian invasion of Ukraine and ensuing Western sanctions have significantly curtailed the reliability of supply from Russia and Belarus. Belarusian output, largely shipped through Baltic ports, has also been disrupted by EU sanctions and logistical bottlenecks.
These are not ideal trading partners in a time of global instability. It’s not just a commercial issue — it’s a sovereign risk for Brazil as a nation.
A Homegrown Alternative
Brazil Potash’s solution is the Autazes Project, a planned large-scale underground mine just 120 kilometers from Manaus in the state of Amazonas. The project boasts a 23-year mine life, with significant room for expansion as only ~5% of the potential ore body has been drilled, and is located near Brazil’s largest farming regions, offering a built-in logistical advantage.
Company materials describe the mine as being in the “early construction stage”. Over $250 million has already been invested in drilling, permitting, public hearings and technical studies, though the current market cap is half of that. Once in production, the company is anticipated to generate up to ~$1 billion per year in EBITDA with peer market capitalizations historically being ~8.9x EBITDA.
If successful, the Autazes Project could supply up to 17 percent of Brazil’s entire national potash needs, reducing the country’s reliance on imports and shortening the supply chain dramatically.
“This would be a game changer for Brazilian farmers,” Simpson said. “They would gain not only cost advantages but also a more reliable and secure supply of fertilizer.”
Economic Advantage in Fertile Ground
One of the project’s key selling points is its projected operating cost. According to company estimates, Brazil Potash will be the lowest delivered-cost potash supplier in-country, owing largely to proximity and a simplified logistics chain.
Shipping potash from Canada or Eastern Europe involves ocean freight, port handling, and cross-country transport to Brazil’s interior, which is pretty much a non-starter. By contrast, potash from Autazes will be initially transported using low-cost river barges with final leg by truck a fraction of the distance to the nation’s major farms primarily located in Mato Grosso State, Brazil.
Independent analysis suggests this cost differential could be significant — enough to make the Autazes potash consistently more competitive, regardless of price fluctuations in the global market.
Brazil Potash could, in fact, have two options with its entire potential output; sell it locally with precious few local competitors, or export it to countries that, right now, are unsure where they’re going to get potash going forward.
If America applies tariffs on potash during a trade war with Mexico and Canada, suddenly Brazilian potash becomes even more in play. Alternately, if Brazilian food exports pick up as the US reduces imports of highly tariffed Mexican and Canadian grain and food, the demand for local fertilizer will skyrocket.
A Seasoned Team and Strong Backers
Investors might be interested in Brazil Potash’s international potential during a trade war, but they may also be attracted by the company’s management and shareholder base. The executive chairman is the former CEO and chairman of Nutrien Ltd., the world’s largest fertilizer producer. That connection offers credibility, as does the involvement of royalty and streaming giant Franco-Nevada.
Franco-Nevada participated in the Brazil Potash IPO, buying $10 million worth of shares at $15 in November 2024. It also signed a separate royalty agreement on future production.
Having a name like Franco-Nevada involved is a confidence booster for the capital markets, as it shows institutional belief in the asset, and those folks do far deeper due diligence than you or I could ever think to do.
The company raised $30 million in its November IPO, and its stock (GRO) has since traded in a wide range from $15.00 down to $2.25 in a handful of months.
As of late March 2025, the stock was re-priced at $3.00, suggesting a potentially attractive entry point for long-term investors willing to wait out the development timeline, at just 25% of the cost that Franco Nevada thought was a good buy-in price.
Brazil Potash itself currently has a market cap of $115 million with no debt on its balance sheet — an uncommon feature in the capital-intensive world of mine development.
Timing the Cycle
Potash is a highly geopolitically sensitive commodity. During the last full potash cycle — potash prices moved from their typical range of $300 to $400 per tonne to nearly $1200 per tonne in the span of just one year due to USA sanctions on Belarus followed by Putin’s invasion of Ukraine. Prices are currently sitting mid cycle at ~$340 per tonne but if the USA follows through with Canadian sanctions on potash, all bets are off as to how high prices could spike again.
Fortunately for Brazil Potash, even at the price floor of ~$280 per tonne, where roughly 70% of world producers are losing money selling to Brazil, the project is still anticipated to be profitable compared to their production cost estimate of $79 per tonne. Its all about location, location, location! Based on long term price estimates from market intelligence groups, Brazil Potash is forecasting a potential run-rate EBITDA of $1 billion annually once ethe mine is fully operational.
If they can deliver on those numbers, it could be one of the most profitable potash assets globally, but getting a mine to full production takes time, resources, and money.
The Autazes Project is expected to enter commercial production four years after construction begins. In the meantime, full funding for project construction will need to be navigated carefully.
Threading the needle on the environmental side will also be important. In fact, the reasoning for the big stock fall-off since IPO comes down to a misconception on that front.
If I’m honest, three misconceptions.
Local Concerns, Global Ambitions
One challenge facing the project is its location in the Amazon basin, a region known for its environmental sensitivity and Indigenous rights issues. The company has stated its commitment to sustainable development and local engagement, but critics have argued that a mine is a mine is a mine.
Projects in the Amazon must meet the highest environmental and social standards, and some NGOs, having experienced other companies having ignored indigenous communities’ needs, have the default belief that all companies will behave in the same way.
They worry that tailings dams have been known to collapse at other mines in Brazil, though GRO has no plans for tailings damn, instead utilizing dry stacked salt piles with these tailings ultimately returned underground.
They worry the local indigenous community wont be sufficiently consulted, though the company has already completed free, prior and informed consultations following United Nations protocols resulting in over 90% approval.
And, most spuriously, they assume that the project, being in the Amazonas state, will require the cutting of Amazon rainforest to exist, though the project is actually on land that has been long ago cleared for cattle farming use.
Brazil Potash says it is working closely with federal and state regulators and has committed to not touch any primary rainforest growth and maximizing economic benefits for local communities.
“We are not just digging a hole in the ground,” Simpson said. “We are building long-term infrastructure and jobs for the region, and allowing local industry to thrive.”
For Investors: Risks and Rewards
The upside here is potentially enormous. If they succeed, you’ve got a high-margin, long-life asset in a country that desperately needs it. Local communities and government are aboard, the executive team is truly epic in experience and knowledge, there’s plenty of potash in the project even before the company looks to step out on the resource, and the macroeconomic side provides a massive potential local market – at worst – with an export market right there to fuel things on the top end.
Investors may also find the current share price appealing, especially compared to the IPO level. The potential for significant re-rating exists as the project hits construction and financing milestones, and the institutional investors who went in at $15 are seemingly not blinking despite being down 80% early on.
With so much of the world’s potash supply concentrated in geopolitically risky areas, Brazil Potash is positioning itself as a “made in Brazil” solution — less vulnerable to sanctions, shipping delays, or foreign political risk.
For institutions looking to hedge against global instability in the fertilizer market or gain leverage to Brazil’s booming agribusiness sector, the appeal is clear.
Recent trading in the stock shows upward moves afoot
After hitting lows around $2.25 recently, the stock has quickly corrected to above $3 in just a month, most recently hitting a high of $3.59.
The company believes it is undervalued, which isn’t a rare thing for any mining company, but if you believe the people at Franco Nevada knew what they were doing when they bought in, you’d have to at least add NYSE.GRO to your watchlist for the coming months.
ISSUER-PAID ADVERTISEMENT. BRAZIL POTASH CORP., or the “Company,” has paid a third party marketing company, Solidaire Investments, and this third party marketing company paid Parry Research DBA Equity.Guru Media (“Publisher”) in cash $4000 for marketing services, including advertis
ements. This advertisement is part of those issuer-paid marketing services. This compensation should be viewed as a major conflict with Publisher’s ability to be unbiased.
FORWARD LOOKING STATEMENTS. This publication contains forward-looking statements, including statements regarding expected continual growth of the featured company and/or industry. The Publisher notes that statements contained herein that look forward in time, which include everything other than historical information, involve risks and uncertainties that may affect the companies’ actual results of operations. Factors that could cause actual results to differ include, but are not limited to, government regulations concerning potash production, the size and growth of the market for potash, the companies’ ability to fund its capital requirements in the near term and long term, pricing pressures, etc.
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