U.S.-based fertilizer giant Mosaic Company signed a $7 billion contract with Saudi Arabia Basic Industries (SABIC) and the Saudi Arabian Mining Company (Ma’aden) for a 3.5 million ton phosphate operation in the Kingdom, according to a press release issued today.
“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,” according to the Press Release. “The highly cost-efficient project is expected to have a production capacity of 3.5 million tons 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 percent ownership stake. In connection with its equity share, Mosaic will market approximately 25 percent 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.
“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.”
