Two of the world’s largest mining companies are making investments in the fertilizer business. Just one week after saying it would pump $240 million into potash mine development in Saskatchewan, Australian mining giant BHP Billiton announced it was buying Athabasca Potash Inc. (API). Earlier last week, Brazil-based mining company Vale S.A. announced agreements to buy the stakes of Yara and Bunge in the Brazilian fertilizer company Fosfertil.
BHP’s purchase of API for $320 million, makes sense from a logistical standpoint, since the API Burr Project sits next door to BHP’s Jansen Project. BHP also owns Anglo Potash Inc., which it bought in 2008. API holds one of the largest exploration permit areas in the Saskatchewan basin.
The world’s largest producer and exporter of iron ore, Vale has acquired Yara’s 15.5-percent stake of Fosfertil for $785 million, and Bunge’s 42.3-percent share for $3.8 billion. Fosfertil is the largest producer of phosphate and nitrogen fertilizers in Brazil. The company has three phosphate mines, two ammonia plants and finished fertilizer plants with an upgrading capacity of 3.4 million tons of phosphate rock and 600,000 tons of ammonia annually.
Bunge will keep its retail fertilizer business in Brazil and enter a supply agreement with Vale through 2012.
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