Mosaic to sell Brazil potash mine for $27M cash

Mosaic (NYSE: MOS) agreed to sell its Taquari-Vassouras potash mine in Brazil to VL Mineração for up to $27 million in cash, with the buyer also assuming about $22 million in asset retirement obligations.

The deal, subject to approval by Brazil’s Administrative Council for Economic Defense (CADE), will be paid in installments, Mosaic said Wednesday in a statement. Some $12 million will be paid at closing, $10 million one year later and the remaining $5 million over six years.

Operations at the Taquari mine require more than $25 million in new capital to remain viable, Mosaic said. The company believes the funds could generate better returns if deployed elsewhere in its portfolio.

VL Mineração has indicated it is prepared to make the investments necessary to extend the life of the Taquari operations, Mosaic says.

Mosaic shares rose 3.3% to $32.21 Wednesday in New York, giving the company a market capitalization of $10.2 billion.

Market and tariff headwinds

The sale comes as Mosaic grapples with weaker fertilizer demand across key markets. Shares of the world’s leading producer of phosphate and potash fertilizers dropped 13% on Aug. 6, their steepest fall since May 2022, after the Tampa-based company reporter weaker-than-expected quarterly profit.

Mosaic’s latest results highlighted the impact of U.S. tariffs on phosphate imports. The levies have made phosphate purchases costlier, reducing sales volumes in the second quarter. U.S. imports of phosphate and potash are down about 20% so far this year, a trend Mosaic expects to continue.

Farmers’ nutrient budgets have also tightened as corn and soybean prices fall amid “global trade uncertainty” and expectations for large harvests, said Jenny Wang, Mosaic’s executive vice president of commercial.

Mosaic posted an $8 million loss in its phosphate segment for the quarter, as planned maintenance projects to boost production took longer than expected, further squeezing sales volumes.