(Adds detail on Mosaic and the phosphate project, includes share price.)

--Mosaic announces joint venture phosphate fertilizer project

--To spend up to $1 billion on project, own 25%

--Saudi Arabia project expected to open in 2016

 
   By Ian Berry

Fertilizer maker Mosaic Co. (MOS) said Tuesday it plans to invest up to $1 billion in a joint venture in Saudi Arabia to produce phosphate, a move that would improve its access to agricultural markets in Asia.

Mosaic plans to team up with two Saudi Arabian companies on the $7 billion project. Under terms of the agreement, mining and metals company Saudi Arabian Mining Co. (1211.SA), or Maaden, would own 60%, Mosaic would own 25% and petrochemical firm Saudi Basic Industries Corp. (2010.SA), or Sabic, would own 15%.

The project, which would be built in northern Saudi Arabia, would give Plymouth, Minn.-based Mosaic an advantage in shipping fertilizer to India and elsewhere in Asia, Mosaic Chief Executive Jim Prokopanko said.

The effort would complement Mosaic's existing phosphate operations, which are concentrated in Florida and Louisiana. Mosaic is the world's largest phosphate fertilizer producer. Farmers use phosphate fertilizer on about 80% of U.S. corn acreage, according to U.S. Department of Agriculture data.

"There's been relatively little investment in new phosphate capacity over a number of years," Mr. Prokopanko said in an interview.

Mosaic said it would help design, construct and operate the new facilities. The project would include a mine and complex that produces phosphate fertilizers, animal feeds and food-grade purified phosphoric acid. Mr. Prokopanko said the integrated nature of the project made it attractive.

The companies expect to finalize the agreement in the first half of this year. The facilities are expected to produce approximately 3.5 million metric tons of phosphate-related products starting in late 2016.

The project would be similar to an existing joint venture between Maaden and Sabic. That 3 million-metric ton facility started production in 2011. While that project fueled worries that the market would become saturated, Mr. Prokopanko said demand has kept up with growing supplies.

Mosaic Chief Financial Officer Larry Stranghoener said the cash investment of up to $1 billion, which would be paid over four years, is "manageable" financially, and "still leaves us plenty of flexibility to do other things."

Mosaic currently mines about 200,000 acres of its own land in Florida for phosphate. It is also one of the world's largest potash fertilizer producers.

Mosaic shares were recently down 0.5% to $61.65. They are up 8.9% year-to-date.

Write to Ian Berry at ian.berry@dowjones.com

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