The Mosaic Co. has entered into a heads of agreement with the Saudi Arabian Mining Co. (Ma’aden) and Sabic under which the companies intend to establish a joint venture to develop integrated phosphate production facilities in Saudi Arabia, the companies announced today. Ma’aden is expected to hold 60%, Mosaic 25%, and Sabic 15% in the jv.
The greenfield project, Wa’ad Al Shammal phosphate project, will require an investment of approximately $7 billion. It is expected to be built at the Wa'ad Al Shammal Minerals Industrial City, in the northern part of Saudi Arabia, and would include further expansion of processing plants at the Ras Al Khair Minerals Industrial City, which is located on the east coast of Saudi Arabia. The sites will be connected by rail. The jv would develop a mine and chemical complexes that would produce phosphate fertilizers, animal feed, food-grade purified phosphoric acid, and sodium tripolyphosphate (STPP) for sale to customers worldwide. It will double Ma'aden's existing phosphate production and, at the same time, expand its product range. The complex is expected to have a total production capacity of approximately 16 million m.t./year, including 3.5 million m.t./year of finished products, such as di- and monoammonium phosphate, NP and NPK fertilizers, as well as about 440,000 m.t./year of downstream products, including purified phosphoric acid, STPP, and mono- and dicalcium phosphate. The partners intend to enter into a definitive shareholders agreement in the first half of this year and begin operations at the complex in late 2016.
Mosaic, under the terms of the agreement, will contribute expertise to the design, construction, and operations of the new facilities and acquire a 25% ownership stake. Mosaic will market approximately 25% of the output. Subject to final financing terms, Mosaic's cash investment will be up to $1 billion, funded over a 4-year period beginning in 2013.
"This project represents not only an important milestone in Ma'aden's growth, but it will also be an important contributor to the development of the northern region of Saudi Arabia as it will include the first major industrial project to be constructed in the region," says Khalid Al Mudaifer, president and CEO of Ma'aden.
"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," says Jim Prokopanko, president and CEO of Mosaic. "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," he says.
(Origin: http://www.chemweek.com)