MosaicCo. to Purchase CF Phosphate Interests for $1.4 Billion

October 28, 2013 08:39 AM

CF Industries and MosaicCo. announce today they have entered a strategic agreement that will mark CF's exit from the phosphate segment to the tune of 1.4 billion dollars. Included in the phosphate transaction are the Hardee County mine, the Plant City phosphate Complex, an ammonia terminal and a Port of Tampa phosphate warehouse and dock complex.

The deal includes a long-term ammonia supply agreement under which CF will provide between 600,000 and 800,000 tons of ammonia per year for 15 years beginning in 2017. MosiacCo. will use the bulk of that ammonia supply as feedstock for phosphate production.

“This is a set of agreements with significant strategic value to both CF Industries and Mosaic,” said Stephen R. Wilson, chairman and chief executive officer, CF Industries Holdings, Inc. “The sale of our phosphate operations represents good value for our shareholders and the full set of transactions enables us to sharpen the strategic focus on our nitrogen business.”

As these two nutrient giants look to narrow the focus of their operations -- MosaicCo. on phosphate and CF on nitrogen -- this agreement is expected to help stabilize ammonia prices by providing a steady demand base via U.S. phosphate production. The impact on nitrogen pricing resulting from the new ammonia arrangements is expected to insulate phosphate production margins and landed ammonia prices, while limiting retail price volatility for both ammonia and phosphate.

“This agreement strengthens our confidence in the return we expect to generate from our Donaldsonville capacity expansion by providing a steady base demand for ammonia at a price that insulates us from movements in natural gas costs,” stated Wilson.


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