Based in Brazil's southeastern Minas Gerais state, the plant is Swiss-headquartered EuroChem's first vertical project integrating mining, processing, production and fertilizer distribution outside Europe, it said in a statement.
Its inauguration ceremony was attended by Brazilian officials, including President Luiz Inacio Lula da Silva and senior members of his cabinet.
The investment is a boon to Lula's administration, whose goal is cutting Brazil's reliance on fertilizer imports, an initiative launched by his predecessor in 2022 amid a supply crisis sparked by the Russia-Ukraine war.
In a speech during the ceremony, Lula said the conflict increased Brazil's awareness that more fertilizers should be produced domestically.
"Last year we paid $25 billion to import fertilizers into Brazil," Lula said, noting that it could have been spent to create local jobs and boost the economy. "We want to stop being an importer."
Brazil currently imports about 85% of its overall crop nutrient needs. Russia, China and Canada are its three top suppliers but the list also includes Nigeria, Morocco and Qatar, among others.
Jeferson Souza, an analyst at Agrinvest, notes Brazil is "unlikely" to achieve self-sufficiency in fertilizer production.
He cited structural problems such as the price of natural gas, which is used to make nitrogen fertilizers, including urea. High raw-material costs and a heavy tax burden make the national product uncompetitive against imports, Souza noted.
According to data from fertilizer lobby Anda, national fertilizer production fell by almost 9%, reaching 6.8 million tons last year.
The biggest output drop was for urea, or 41%, according to Anda data for 2023 compiled by Agrinvest.
EuroChem's new unit consists of an open-pit phosphate mine with more than 350 million metric tons of mineral reserves and an approximately 25 year lifespan.
The plant will manufacture nutrients for soybean, corn and sugarcane.
"Even China, which is the planet's largest consumer and producer of fertilizers, imports potassium," Souza said. "Brazil does not need to be independent, it needs to be less dependent."
(Reporting by Ana Mano and additional reporting by Eduardo Simões in São Paulo; Editing by Steven Grattan, Alexander Smith, Richard Chang and Aurora Ellis)
By Ana Mano
