American Firm to own 25% of Giant Saudi Phosphate Joint Venture
US-based Mosaic, a top producer of phosphate and potash, will own 25 per cent of a new phosphate production joint venture in Saudi Arabia with Saudi Arabian Mining Company (Ma'aden) and Saudi Basic Industries Corporation (Sabic).
The companies, which signed the shareholders’ agreement recently, have been working toward the agreement since a Heads of Agreement was signed in March.
Ma'aden, Mosaic and Sabic will own 60, 25 and 15 percent of the joint venture, respectively, a statement said.
The estimated $7 billion greenfield project, to be known as Wa'ad Al Shamal, or Northern Promise, Phosphate Project, will be built in the northern region of Saudi Arabia at Wa'ad Al-Shammal Minerals Industrial City, and in Ras Al Khair Minerals Industrial City which is located on the east coast of Saudi Arabia.
The highly cost-efficient project is expected to have a production capacity of 3.5 million tonnes of finished phosphate per year. Operations are expected to commence in late 2016.
Under the terms of the agreement, Mosaic will contribute expertise to the design, construction and operations of the new facilities and acquire a 25 per cent ownership stake.
In connection with its equity share, Mosaic will market approximately 25 per cent of the joint venture's product, including phosphate fertilizer and animal feed. Subject to final financing terms, Mosaic's cash investment is expected to be up to $1 billion, funded over a four-year period beginning in 2013.
The plant will produce about 3 million tonness of fertiliser products, as well as 440,000 tonnes of downstream products including purified phosphoric acid used in food industries, sodium tripolyphosphate used in detergent manufacturing, and dicalcium phosphate & monocalcium phosphate used in producing animal feed, according to a report in Arab News.
"We are pleased with the progress on our joint venture with Ma'aden and Sabic," said Mosaic president and chief executive officer Jim Prokopanko.
"This cost-effective project will allow Mosaic to extend our ability to serve key growing agricultural markets. 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