Lead-Lag Live

Global Food Risk: How Brazil’s New Potash Supply Could Reshape Fertilizer, Commodities, and Agriculture

• Michael A. Gayed, CFA

Share episode

In this episode of Lead-Lag Live, I sit down with Matt Simpson, CEO of Brazil Potash (NYSE: GRO), to break down how the Autazes project could transform fertilizer security for Brazil and shift the balance of power in global agriculture.

From navigating permits and construction milestones to securing long-term offtake agreements for more than 90 percent of expected production, Simpson explains how domestic potash supply could reduce Brazil’s reliance on imports and strengthen global food stability at a time when commodity markets remain volatile.

In this episode:
– Why fertilizer supply is tightening as global agriculture demand accelerates
– How domestic Brazilian potash could reduce geopolitical and logistics risk
– What the Autazes project means for future pricing, imports, and food security
– How infrastructure partnerships are cutting project Capex and speeding timelines
– Why growth in fertilizer demand could reshape commodities in 2025–2027

Lead-Lag Live brings you inside conversations with the financial thinkers who shape markets. Subscribe for interviews that go deeper than the noise.

Start your adventure with TableTalk Friday: A D&D Podcast at the link below or wherever you get your podcasts!
Youtube: https://youtube.com/playlist?list=PLgB6B-mAeWlPM9KzGJ2O4cU0-m5lO0lkr&si=W_-jLsiREjyAIgEs
Spotify: https://open.spotify.com/show/75YJ921WGQqUtwxRT71UQB?si=4R6kaAYOTtO2V

Support the show

SPEAKER_00:

The the total cost to build our Ota's Posh project is estimated about$2.5 billion. So having a third party, in this case Fictor, fund our only off-site infrastructure being a 102-mile or$165 power line through this boot style contract takes a pretty decent chunk of the capital off of Brazil Posh's balance sheet and gets us that much closer to a fully funded solution. What it also does is allows our construction team to have a much more concentrated effort in a tight geographical area to focus on the shaft sinking building of the processing plant and the river barge port on time and cost.

SPEAKER_01:

Right now, fertilizer markets are tightening again. Brazil just hit one of its strongest fertilizer import months of the year, even as global tensions and supply issues push producers to secure more stable and local sources. That's what makes Brazil Podash's progress so important, especially with the company now pre-selling roughly 91% of its expected production. My guest today is Matt Simpson, CEO of Brazil Podash. Matt, welcome to the show.

SPEAKER_00:

Thank you for having me.

SPEAKER_01:

So last week you announced that roughly 91% of your expected production is already spoken for. What do you think is driving that level of buyer confidence at this stage?

SPEAKER_00:

Well, potash is one of the three key nutrients used to efficiently grow food. And Brazilian farmers are exposed because they import 98% of their need. So they have geopolitical exposure, rail strikes, port strikes, all that have occurred in the last few years when they don't need to have this exposure because potentially the second biggest basin in the world is sitting in their backyard being developed by Brazil Potash. So by domestically sourcing the potash, Brazilian farmers will mitigate these risks in a market that's growing at around four times the rest of the world on the largest import base.

SPEAKER_01:

Yeah. So just uh speaking more specifically for a moment about uh Brazil potash in particular, you brought in a leadership team with deep global fertilizer experience. How does that uh change the pace and scale of what you can achieve as you move toward construction?

SPEAKER_00:

Brazil Podash has really moved on from the engineering phase, and now we're fully permitted for construction. And for us to maximize our ability to raise the construction funding, we made significant changes to our board and management to bring on industry experts that have unique relationships. Mao Schmidt, our executive chairman, for example, is the founding chairman of Nutrion, which is the largest market cap fertilizer company in the world. I think their market cap is about 40 billion today. And along with him, there's a gentleman named Christian Jorg that helped Mayo create Vitera, which they sold to Glencore for about 7.3 billion. And then once they sold Vitera, Mayo then joined Nutrion. And Christian went to Salik, which is part of the Kingdom of Saudi Arabia. So he lived for about 10 years in Riyadh, so knows all the Middle East funds extremely well. And then rounding out, our team is uh Marcelo Lesser, who used to head the World Bank's IFC in Latin America. And then most recently, Sergio Lete joined us as our president in Brazil, having raised billions of dollars to build projects.

SPEAKER_01:

So you you mentioned it there a little bit about where you're at uh in terms of nearing construction. Uh you recently completed vegetation clearing at both the plant and port sites. How does that move the timeline forward? And what's the next major milestones that investors can be watching for?

SPEAKER_00:

Vegetation clearing is one of the key steps required at most mining sites as a prerequisite to start construction. And for us, the next steps include we are going to go binding with a Brazilian company called Fictor, who plan to fund and construct our power line, which covers about 200 million of our construction cost. We also expect Brazil's government to formally lock in an exemption on import duties for new equipment, which will take another 100 million off of our construction costs. We're speaking to several groups about potentially following a similar model to what we did with Victor, which is called a boot or a build-on operate transfer contract, where a third party completely funds things such as our steam plant, our river barge port, and the 20 megawatts that we'll need for construction power that becomes our backup power. And then later in the year, it's all going to be focused on locking the anchor equity for construction and the debt. And we already do have several groups that are covered under NDA. Some of them have even been to site. So there'll be lots of news coming this coming year.

SPEAKER_01:

So the MOU reduced close to$200 million from the project CapEx and it got a lot of attention. How does that change the project economics and your path into a faster build-out?

SPEAKER_00:

The total cost to build our Ota's Posh project is estimated about$2.5 billion. So having a third party, in this case Fictor, fund our only off-site infrastructure being a 102-mile or$165 power line through this boot style contract takes a pretty decent chunk of the capital off of Brazil Posh's balance sheet and gets us that much closer to a fully funded solution. What it also does is allows our construction team to have a much more concentrated effort in a tight geographical area to focus on the shaft sinking, building of the processing plant and the river barge port on time and cost.

SPEAKER_01:

So, Matt, just to elaborate a little bit further, can you talk a little bit about the debt and institutional interest that uh Brazil Podash is seeing?

SPEAKER_00:

So there's very strong interest from several development finance institutes, export credit agencies, and project finance banks to provide the debt needed for project construction. Some of these investors have already even been to site, and we're working towards entering mandate letters that will, once we complete the front end engineering design, be converted into binding commitments for construction funding late next year.

SPEAKER_01:

And so just for a minute, I want to go back to sort of where we started. Brazil relies heavily on imported potash. How big is the domestic opportunity if this comes online? And what role do you see Brazil potash playing in that shift?

SPEAKER_00:

So Brazil is the world's largest importer of potash. They account for about 22% of market share. And this is a market globally that's about$20 billion a year, growing at about 1.8%. Brazil is growing at four times this rate, nearly 6.8%. So by having a large-scale domestic supply of potash in Brazil, close to where the farmers are located, it's going to be tremendous our supply security for Brazil and therefore global food security.

SPEAKER_01:

Yeah, and you mentioned there a little bit about the community. You've been expanding engagement with the Mura communities and signing workforce development MOUs. How does that local participation support longer-term scalability?

SPEAKER_00:

There are two communities totaling about 40,000 people within about 12 miles or 20 kilometers of our project that have a very low skill level and pretty low relative standard of living. So for us, it's very important to create job communities locally where people are going to be most impacted by the project's construction and operation. It also benefits the company because if we're able to hire people locally that have deep roots in the community, it's going to be much more sustainable, more committed employees longer term.

SPEAKER_01:

Yeah. And so, Matt, just lastly, for anyone who wants to follow your progress or connect with you and the team, where's the best place for them to go?

SPEAKER_00:

Well, there's several places that people could look, but our main one is our website, which is simply BrazilPodash.com. And on that website, you'll find lots of information about the company, including our corporate presentation. And you'll also see as part of that presentation the outlook for 2026.

SPEAKER_01:

Fantastic. Well, Matt, thank you so much for joining me. And thanks to everyone for watching. Be sure to like, share, and subscribe for more episodes of Lead Lag Live.

Head Shot

Michael A. Gayed, CFA

Host