Back to top

Analyst Blog

Fertilizer giant The Mosaic Company (MOS - Analyst Report) has entered into a shareholders’ agreement with the Saudi Arabian Mining Company (Maaden) and Saudi Basic Industries Corporation (SABIC) to jointly develop a fully integrated, world-class phosphate production facility in the Kingdom of Saudi Arabia..

The project will be known as Wa'ad Al Shamal ("Northern Promise") Phosphate Project, and the estimated cost of the project is $7 billion. It 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 located on the east coast of Saudi Arabia. The project is expected to have an annual production capacity of 3.5 million tons of finished phosphate and is also expected to be highly cost-efficient.

Mosaic will own 25% of the joint venture, and will market about 25% of the production from the joint venture, including phosphate fertilizer and animal feed. The project will also enable the company to enhance its ability to serve the major agricultural markets.

Mosaic will also provide its expertise for the design, construction and operations of the new facilities. Mosaic is expected to invest up to $1 billion in the project that will be funded over a four-year period beginning in 2013.

The project is expected to be operational by late 2016. Ma'aden and SABIC will acquire 60% and 15% of the joint venture, respectively.

Plymouth-based Mosaic, which is among the biggest fertilizer companies on the planet along with Agrium Inc. (AGU - Analyst Report), CF Industries Holdings, Inc. (CF - Analyst Report) and Potash Corp. of Saskatchewan, Inc. (POT - Analyst Report) is a single-source provider of phosphates, potash fertilizers and feed ingredients for the global agriculture industry.

Mosaic currently holds a Zacks Rank #5 (Strong Sell).

Please login to Zacks.com or register to post a comment.