PLYMOUTH, Minn., March 19, 2013 /PRNewswire/ -- The Mosaic Company (NYSE: MOS) today announced that it has entered into a Heads of Agreement with Ma'aden and the Saudi Basic Industries Corporation (SABIC) under which the companies intend to enter a joint venture to develop integrated phosphate production facilities in the Kingdom of Saudi Arabia. The parties contemplate that Ma'aden, Mosaic and SABIC would own 60, 25 and 15 percent of the joint venture, respectively.
The approximately $7 billion greenfield project, to be known as Wa'ad Al Shammal Phosphate Project, would be built in the northern region of Saudi Arabia at Wa'ad Al Shammal Minerals Industrial City, and would 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 would develop a mine and chemical complexes that would produce phosphate fertilizers, animal feed, food grade purified phosphoric acid and sodium tripolyphosphate for sale to customers worldwide. The highly cost-efficient facilities are expected to have a production capacity of approximately 3.5 million tonnes of finished product per year. Operations are expected to 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 percent ownership stake. In connection with its equity share, Mosaic would market approximately 25 percent of the production of the joint venture. Subject to final financing terms, Mosaic's cash investment would be up to $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 fulfill Mosaic's mission, to help the world grow the food it needs, while delivering compelling shareholder value."Facts about the project:
- Phosphate production at the Ma'aden project would benefit from the availability of key raw materials which are available locally from sources within Saudi Arabia.
- The project would provide logistical benefits to Mosaic, enabling it to ship phosphates to important phosphate geographies.
- The parties expect to enter into a definitive shareholders agreement during the first half of 2013.