RIYADH: Saudi Arabian Mining Co. has entered into a share purchase and subscription agreement with the Mosaic Co. with the aim of expanding its phosphate business.  

Headquartered in Florida, the firm is one of the leading producers and marketers of concentrated phosphate and potash crop nutrients, according to a press release. 

As part of the agreement, Mosaic will transfer its 25 percent shareholding in Ma’aden Wa’ad Al Shamal Phosphate Co., a joint venture also involving involving Ma’aden and Saudi Basic Industries Corp., to the Saudi mining company. 

This deal will effectively raise Ma’aden’s stake in MWSPC to 85 percent. 

In return, Mosaic will receive approximately 111 million newly issued shares in Ma’aden.

Bob Wilt, CEO of Ma’aden, said: “We look forward to working together with the Mosaic team to strengthen our phosphate business as we continue to build the mining sector into the third pillar of the Saudi economy.” 

Ma’aden Wa’ad Al Shamal Phosphate Co. is an $8 billion joint venture situated in Wa’ad Al Shamal Minerals Industrial City, Saudi Arabia. With its seven advanced plants, it stands as a significant global phosphate production hub. 

Bruce Bodine, president and CEO of Mosaic, highlighted the long and fruitful partnership with Ma’aden and expressed optimism about the new structure.  

“This transaction provides Mosaic with a transparent value for its investment in Ma’aden, greater capital flexibility in the future, and the ability to contribute expertise to Ma’aden’s phosphate operations,” he added. 

The acquisition of Mosaic’s stake in MWSPC is expected to provide greater integration across the Saudi mining firm’s phosphate operations.

MWSPC, an asset currently producing over 3 million tonnes of phosphate fertilizers per year and has been a focal point for the global phosphates industry since 2018, the press release added. 

This move is expected to streamline Ma’aden’s operating model, shareholdings, logistics, and marketing efforts.  

Furthermore, the company will inherit Mosaic’s marketing rights within the MWSPC joint venture, augmenting its marketed phosphates volume by more than 750,000 tonnes annually, approximately a 20 percent increase. 

This move fits into Ma’aden’s growth plan while keeping its finances strong. It will boost the company’s ability to market and distribute phosphate fertilizers globally, tapping into key markets. 

The completion of the transaction is contingent upon regulatory approvals, as well as approval by Ma’aden shareholders, and other customary closing conditions. It is anticipated to be finalized in the third quarter of 2024. 

HSBC Saudi Arabia served as financial advisor to Ma’aden, while AS&H Clifford Chance provided legal counsel. Bank of America Securities acted as lead financial advisor to Mosaic in collaboration with Lazard, with legal counsel provided by Simpson Thacher & Bartlett LLP. 

SINGAPORE: Oil edged down on Tuesday after Israel-Hamas ceasefire talks in Cairo helped quell market fears of an expanding conflict in the Middle East, while worries about the outlook for US interest rates dragged on the market, according to Reuters.

Brent crude futures dipped 19 cents, or 0.21 percent, to $88.21 a barrel at 9:30 a.m. Saudi time, while US West Texas Intermediate crude futures slipped 20 cents, or 0.24 percent, to $82.43 a barrel.

The front-month contract of both benchmarks lost more than 1 percent on Monday.

“The ongoing negotiation for a potential ceasefire between Israel and Hamas has led market participants to further unwind the geopolitical risk premium in oil prices, while the upcoming Fed meeting also drives some near-term reservations,” said Yeap Jun Rong, market strategist at IG.

“Rates being kept at elevated levels for longer could trigger a further rise in the US dollar, while also putting some risks to oil demand outlook.”

Hamas negotiators left Cairo late on Monday to consult with the group’s leadership after talks with Qatari and Egyptian mediators on a response to a phased truce proposal that Israel presented on the weekend.
The delegation was expected to report back within two days, two Egyptian security sources said.

While Hamas leaders visited Cairo, Israeli airstrikes killed dozens of Palestinians on Monday, with more than half the dead in the southern Gaza city of Rafah, which foreign leaders have urged Israel not to invade.

Continued attacks by Yemen’s Houthis on maritime traffic south of the key Suez Canal trading route have kept a floor under oil prices and could prompt higher risk premiums if players anticipate crude supply disruptions.

Houthis targeted two US destroyers and the vessel Cyclades in the Red Sea as well as the MSC Orion in the Indian Ocean, the Iran-aligned group’s military spokesman Yahya Sarea said in a televised speech early on Tuesday.

On the economic front, investors are on watch this week for the US Federal Reserve’s May 1 policy review, with stubborn inflation pushing out market expectations for any rate cuts, which could bolster the US dollar and hamper oil demand.

Some investors are cautiously pricing a higher probability that the Fed could hike interest rates by a quarter percentage point this year and next as inflation and the labor market remain resilient.

Additionally, concerns over demand have also weighed on sentiment, ANZ analysts said in a research note, as premiums for diesel and heating oil over crude oil have fallen to their lowest level in months.

“The four-week average consumption in the US is near the average seasonal low of the past five years,” said ANZ, citing data from the Energy Information Administration.