The Mosaic Company today announced a $7 billion greenfield project, to be known as Wa'ad Al Shammal Phosphate Project as part of a Heads of Agreement with Ma'aden and the Saudi Basic Industries Corporation. The joint venture will develop integrated phosphate production facilities in northern Saudi Arabia. The Wa'ad Al Shammal Phosphate Project, is expected to be built in the northern region of Saudi Arabia at Wa'ad Al Shammal Minerals Industrial City, and would continue expansions of processing plants in Ras Al Khair Minerals Industrial City on the east coast of Saudi Arabia.
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 $8 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."
The move will encourage the spread of production technologies and strategies and should help moderate global pricing of phosphate fertilizers. The facility will have a production capacity of approximately 3.5 million tonnes of finished product per year once the plant goes operational in late 2016.