All Posts from March 19, 2013

Mosaic inks deal with Ma’aden, Sabic

The Mosaic Co. 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 JV 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 facilities are expected to have a production capacity of approximately 3.5 million mt 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 JV. 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 CEO 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.

TFI applauds Florida/EPA water quality agreement

The Fertilizer Institute (TFI) on March 19 announced that the U.S. Environmental Protection Agency and the Florida Department of Environmental Protection (FDEP) have reached an agreement that will allow FDEP to implement numeric nutrient criteria (NNC) for Florida’s water.

TFI applauded the agreement, saying that allowing the state to set its own water quality standards is a win for Florida’s environment and business community. “This agreement represents a tremendous victory for the fertilizer industry as it will allow EPA to withdraw the federal NNC for Florida, which could have cost the state’s agricultural community more than $1 billion annually,” TFI said.

TFI said the agreement is precedent setting in that it confirms that states, not the federal government, are best equipped to protect their own waters. It also leaves in place an earlier U.S. District Court decision to vacate EPA’s streams standard and the downstream protective value, which TFI said are tools that could be used to set NNC elsewhere. TFI noted that environmental groups are pushing EPA to utilize similar means to address nutrients in the Mississippi River Basin.

“Nutrients occur naturally and in balanced concentrations contribute to healthy ecosystems,” said TFI Vice President of Scientific Programs Bill Herz. “We are extremely pleased with this agreement and the overall efforts of a unified industry and agriculture community. We have long argued that nutrients cannot be treated like traditional pollutants and have consistently held that strict federal NNC are not the best way to regulate them in waterways.”
The agreement is contingent on Florida’s Legislature acting to direct FDEP to move forward.