The Mosaic Company
) has landed an agreement with mining company Ma'aden and leading
petrochemicals maker Saudi Basic Industries Corporation (SABIC),
pursuant to which, the companies plan to form a joint venture to
develop phosphate production facilities in Saudi Arabia.
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Mosaic, which is among the biggest fertilizer companies in the
planet along with
), plans to invest up to $1 billion in the roughly $7 billion
project to be built in the northern region of Saudi Arabia at
Wa'ad Al Shammal Minerals Industrial City.
The planned "Wa'ad Al Shammal Phosphate Project" will include
further expansion of processing facilities in Ras Al Khair
Minerals Industrial City. The project will benefit from the
availability of major raw materials, which are available locally
from sources within Saudi Arabia.
Mosaic will hold a 25% interest in the joint venture with Ma'aden
and SABIC owning 60% and 15%, respectively. The companies are
expected to enter into a definitive shareholders' agreement
during first-half 2013.
The joint venture will develop a mine and chemical complexes to
be used for producing phosphate fertilizers, animal feed, food
grade purified phosphoric acid and sodium tripolyphosphate for
sale to customers globally. The facilities have been projected to
have a production capacity of around 3.5 million tons of finished
product annually. Operations are expected to begin in late 2016.
Per the agreement, Mosaic will offer its expertise for the
design, construction and operations of the new facilities. In
connection with its equity interest, the company will market
roughly 25% of the production of the joint venture.
The joint venture will usher in significant opportunity for
Mosaic, allowing it to diversify its phosphate sources and expand
access to major agricultural countries. The cost-effective
project, which complements Mosaic's phosphate business in Fla.
and La., will offer it logistical benefits and enable it to ship
phosphates to key markets.
Mosaic currently carries a short-term (1 to 3 months) Zacks Rank