March 21, 2013
Mosaic enters phosphate joint venture with Ma'aden and SABIC in Saudi Arabia
The Mosaic Company has entered a joint venture with Ma'aden and the Saudi Basic Industries Corporation (SABIC) , to develop integrated phosphate production facilities in Saudi Arabia.
The parties contemplate that Ma'aden, Mosaic and SABIC would own 60%, 25% and 15% of the joint venture, respectively.
The approximately US$7 billion greenfield project, to be known as Wa'ad Al Shammal Phosphate Project, will be built in the northern region of Saudi Arabia at Wa'ad Al Shammal Minerals Industrial City. The project will include further expansion of processing plants in Ras Al Khair Minerals Industrial City which is located on the east coast of Saudi Arabia.
The joint venture will develop mine and chemical complexes that produce phosphate fertilisers, animal feed, food grade purified phosphoric acid and sodium tripolyphosphate. The highly cost-efficient facilities are expected to have a production capacity of approximately 3.5 million tonnes of finished product yearly. Operations should commence in late 2016.
Under the terms of the agreement, Mosaic would contribute expertise to the design, construction and operations of the new facilities and acquire a 25% ownership stake. In connection with its equity share, Mosaic would market approximately 25% of the production. Subject to final financing terms, Mosaic's cash investment will reach up to US$1 billion, funded over a four-year period beginning in 2013.
"Our joint venture with Ma'aden holds great promise for Mosaic, and we expect it to be an excellent complement to our phosphate business in Florida and Louisiana," said Mosaic president and chief executive officer, Jim Prokopanko. "This cost-effective phosphate project would enable Mosaic to further diversify our sources of phosphates and gives us improved access to key agricultural countries. Our growing global reach further enables us to fulfil Mosaic's mission, to help the world grow the food it needs, while delivering compelling shareholder value."