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Yara sells Salitre phosphate mining project to EuroChem

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World Fertilizer,

Yara has signed a Share Purchase Agreement with EuroChem to sell its Serra do Salitre phosphate mining project in Brazil for a cash consideration of US$410 million.

The project progress has been impacted by COVID-19 and significant construction time and CAPEX remains to reach completion, according to Yara.

Serra do Salitre is an advanced-stage integrated upstream phosphates project in Minas Gerais, southeastern Brazil. It comprises an open pit phosphate mine with more than 350 million t of reserves, and a 1 million tpy manufacturing plant for MAP/NP and SSP/TSP products which is due to come on-stream in 2023.

“This transaction allows us to further sharpen our strategic focus, based on our strong competitive edges. Yara Brazil will continue to play an essential role in this growth agenda, and this transaction enables that growth to be driven with a sharper downstream focus,” said Svein Tore Holsether, President and CEO of Yara.

“This expansion will allow us to reduce dependency on third-party phosphate supplies, and also creates the potential for phosphates and complex fertilizer production in Brazil,” said EuroChem Group CEO Vladimir Rashevskiy. “It significantly improves our competitive position in Brazil, and enables us to leverage the extensive blending and distribution capabilities brought by the acquisition of Fertilizantes Tocantins, which we completed last year,” he added.

Yara entered into the Salitre project in 2014, and its assets comprise phosphate mining operations, including a tailing dam, with an annual production capacity of approximately 1200 kt of phosphate rock and an on-going project to construct phosphate processing operations with a projected production capacity of approximately 1000 kt per annum at completion. The estimated CAPEX required to reach completion is of a similar magnitude to the divestment value.

Following the decision to divest, it is expected that the impacted assets will be classified as a held-for-sale disposal group in 3Q21 and that an impairment charge of approximately US$400 million will be recognised in the same quarter.

The transaction is expected to be completed in approximately six months, and is conditional on obtaining necessary local regulatory approvals and customary closing conditions.

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