The Mosaic Company is selling its Brazilian potash mining operations to VL Mineração for up to $27 million in cash and the assumption of approximately $22 million in asset retirement obligations. The transaction allows Mosaic to reallocate capital to more profitable ventures while VL Mineração plans to make the necessary investments to extend the mine’s operations.
In a significant move to streamline its portfolio and reallocate capital, The Mosaic Company announced on August 13, it has entered into an agreement to sell its Brazilian potash mining operations to VL Mineração Ltda. The deal includes the Taquari-Vassouras potash mine located in Rosário do Catete, Sergipe, Brazil.
Under the terms of the agreement, VL Mineração will pay Mosaic up to $27 million in cash, which will be disbursed in installments: an initial $12 million upon closing, $10 million one year later, and the remaining $5 million over the following six years. Additionally, VL Mineração will take on approximately $22 million in asset retirement obligations, effectively offloading a significant liability from Mosaic’s balance sheet. The transaction is contingent on approval from the Brazilian Administrative Council for Economic Defense (CADE) and is expected to close by the end of 2025.
The decision to sell the Taquari-Vassouras mine stems from Mosaic's assessment that the operation requires more than $25 million in capital investments to remain viable. According to Mosaic’s President and CEO, Bruce Bodine, the capital required for the Brazilian mine can be more effectively deployed elsewhere within the company. "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," Bodine stated. "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."
As a result of the sale, Mosaic anticipates recording the asset as "held for sale" in the third quarter, with an expected book loss of $50-$70 million. Despite this anticipated loss, the long-term strategy is centered on improving the company's overall financial health and operational efficiency. The divestment comes at a time when the broader fertilizer market is facing headwinds, including weaker demand and the impact of trade tariffs. For instance, recent U.S. tariffs on phosphate imports have made purchases more expensive, leading to reduced sales volumes for Mosaic. The sale allows Mosaic to shed an underperforming asset that requires significant reinvestment, mitigating future risks and allowing for a more agile business model.
