Mosaic Announces Agreement for Sale of Potash Mining Operations in Brazil to VL Mineração

Rhea-AI Summary

Mosaic Company (NYSE:MOS) has agreed to sell its Brazilian potash mining operations, Mosaic Potassio Mineração Ltda (MPM), to VL Mineração Ltda. The transaction involves the Taquari-Vassouras potash mine in Sergipe, Brazil. The deal includes up to $27 million in cash payments structured as: $12 million at closing, $10 million after one year, and $5 million over six years. VL Mineração will also assume $22 million in asset retirement obligations.

The sale is expected to close by end of 2025, pending Brazilian regulatory approval. Mosaic will record the asset as "held for sale" with an anticipated book loss of $50-$70 million. The decision comes as Taquari mine requires over $25 million in capital investments for continued viability, which Mosaic believes can be better allocated elsewhere.

Positive

• Sale proceeds of up to $27 million in cash payments
• Transfer of $22 million in asset retirement obligations to buyer
• Elimination of required $25+ million capital investment burden
• Strategic realignment to focus capital on higher-return opportunities

Negative

• Expected book loss of $50-$70 million on the sale
• Reduction in Mosaic's potash production capacity
• Loss of presence in Brazilian domestic potash market

Insights

Financial Analyst

Mosaic divests Brazilian potash mine to reallocate capital toward higher-return opportunities despite taking $50-70M book loss.

Mosaic's decision to sell its Taquari-Vassouras potash mine represents a strategic portfolio optimization with mixed financial implications. The company is divesting an asset that would require over $25 million in capital investments for continued viability, opting instead to receive up to $27 million in staggered payments ($12 million at closing, $10 million after one year, and $5 million over six years) while transferring approximately $22 million in asset retirement obligations to the buyer.

The transaction triggers an immediate financial impact with Mosaic expecting to record a substantial book loss of $50-70 million when the asset is classified as "held for sale" in Q3. This indicates the asset's carrying value significantly exceeds the sale proceeds, suggesting either accumulated investments that couldn't be recouped or a challenging operational environment affecting valuation.

CEO Bruce Bodine's statement reveals the strategic rationale: reallocating capital to higher-return opportunities where Mosaic has competitive advantages. This signals management's focus on optimizing return on invested capital rather than maintaining geographic diversification. For Mosaic, a major global fertilizer producer, the math simply didn't work—the required $25+ million investment apparently couldn't generate returns competitive with other opportunities in their portfolio.

The buyer, VL Mineração, likely sees value through a different operational model that can make the mine profitable despite the investment requirements. With potash being critical for Brazilian agriculture and domestic supply considerations potentially providing competitive advantages, the acquirer may be able to operate with different cost structures or realize synergies unavailable to Mosaic.

TAMPA, FL / ACCESS Newswire / August 13, 2025 / The Mosaic Company (NYSE:MOS) announced today that it has entered into an agreement to sell Mosaic Potassio Mineração Ltda (MPM), the entity that operates the Taquari-Vassouras potash mine located in Rosário do Catete, Sergipe, Brazil, to VL Mineração Ltda. Upon the closing of the transaction, VL Mineração will pay Mosaic up to $27 million (USD) in cash including $12 million upon closing, $10 million one year after closing and $5 million over six years, and will assume responsibility for approximately $22 million in asset retirement obligations (ARO). The transaction is subject to obtaining approval by the Brazilian Administrative Council for Economic Defense (CADE) and other customary closing conditions. Mosaic expects the transaction to close by the end of 2025. Beginning in the third quarter, Mosaic will record the asset as "held for sale" with an expected book loss of $50-$70 million.

Mosaic's operations at the Taquari mine require capital investments exceeding $25 million to ensure continued viability. Mosaic believes that the capital required to continue to own and operate Taquari has more attractive uses elsewhere within the company. VL Mineração has expressed a strong interest in making the necessary investments to extend the Taquari operations to the benefit of the local economy, employees and the community.

"One of our priorities is to elevate our core business, and one way to do that is by reallocating capital to ensure we're investing where we have the greatest capacity to succeed. This sale advances progress toward that priority - allowing us to focus capital on opportunities where we have a competitive advantage and are expected to generate higher returns," said Bruce Bodine, Mosaic's President and CEO.

"This agreement allows us to contribute to the development of Brazilian agriculture, including maintaining and expanding the domestic potash supply in the fertilizer market, as we are confident the mine will be profitable and efficient under our ownership and operating model," said Daniel Moreira, CEO of VL Holding.

About The Mosaic Company
The Mosaic Company is one of the world's leading producers and marketers of concentrated phosphate and potash crop nutrients. Through its Mosaic Biosciences platform, the company is also advancing the next generation biological solutions to help farmers improve nutrient use efficiency and crop performance sustainably. Mosaic provides a single-source supply of phosphate, potash, and biological products for the global agriculture industry. More information on the company is available at www.mosaicco.com.

About VL Mineraçãoand VL Holding

VL Mineração Ltda is a subsidiary ofVL Holding, a privately-owned Brazilian agribusiness group with 20 years of expertise in farming and genetics. Its shareholders belong to a family with more than 70 years of experience in agriculture and a diversified footprint in mining, food, banking and energy, among several other businesses.

Contacts:

Investors:
Jason Tremblay, 813-775-4282
jason.tremblay@mosaicco.com

Joan Tong, CFA, 863-640-0826
joan.tong@mosaicco.com

Media:
Ben Pratt, 813-775-4206
benjamin.pratt@mosaicco.com

This release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such statements may include, but are not limited to, statements about the anticipated sale of Mosaic Potassio Mineração Ltda, the entity that operates the Taquari-Vassouras potash plant located in Sergipe, Brazil; the expected timing and terms of the transaction; the potential financial and operational impacts of the sale; the occurrence of any event, change or other circumstances that could give rise to the termination of the applicable agreement; and expectations regarding the Company's future and strategic direction. Such statements are based upon the current beliefs and expectations of the Company's management and are subject to significant risks and uncertainties. These risks and uncertainties include, but are not limited to, the ability to complete the transaction on the expected terms and timeline; required regulatory approvals, including approval by the Brazilian Administrative Council for Economic Defense; political and economic instability and changes in government policies and regulations; changes in market conditions; and operational disruptions; as well as other risks and uncertainties reported from time to time in The Mosaic Company's reports filed with the Securities and Exchange Commission. Actual results may differ from those set forth in the forward-looking statements.

SOURCE: The Mosaic Company

View the original press release on ACCESS Newswire

FAQ

What is the total value of Mosaic's (NYSE:MOS) Brazilian potash mine sale to VL Mineração?

The total transaction value includes up to $27 million in cash payments plus the assumption of $22 million in asset retirement obligations, for a total value of approximately $49 million.

When will Mosaic (MOS) complete the sale of its Taquari-Vassouras potash mine?

The sale is expected to close by the end of 2025, subject to approval from the Brazilian Administrative Council for Economic Defense (CADE) and other closing conditions.

How much book loss will Mosaic record from the Brazilian mine sale?

Mosaic expects to record a book loss of $50-$70 million starting in the third quarter when the asset is classified as 'held for sale'.

Why is Mosaic selling its Brazilian potash mining operations?

Mosaic is selling the operations because the Taquari mine requires over $25 million in capital investments for continued viability, and the company believes it can better allocate this capital to opportunities with higher returns.

How will the sale payment be structured for Mosaic's Brazilian mine sale?

The payment will be structured as $12 million upon closing, $10 million one year after closing, and $5 million over six years.