Vale and Bunge Ltd. announced on January 27, 2010, that Vale will acquire Bunge’s fertilizer nutrients assets in Brazil, including its phosphate mines and fertilizer production facilities and its 42.3% interest in Fertilizantes Fosfatados S.A. (Fosfertil), for $3.8 billion in cash. Of the total transaction value, $1.65 billion is attributed to Bunge’s phosphate rock and fertilizer production assets. The remaining $2.15 billion is for Bunge’s Fosfertil shares. The transaction is subject to customary closing conditions and receipt of Brazilian governmental approvals relating to mining concessions. It is expected to close in the second quarter of 2010.

Bunge, a leading global agribusiness and food company headquartered in White Plains, New York, USA, will retain its retail fertilizer operations in Brazil and will enter into a supply agreement with Vale through 2012, with an option to extend it for one additional year. Bunge will also retain its fertilizer operations in Argentina and the United States, and its 50% stake in its joint venture with Office Cherifien des Phosphates in Morocco.

Combined phosphate rock production capacity of Bunge’s wholly owned assets in Brazil and its share of Fosfertil is approximately 3 million mt/y. Two wholly-owned mines—Araxá, in the state of Minas Gerais, and Cajati, in the state of São Paulo—produced 1.6 million mt of phosphate rock in 2008. Proven and probable reserves at these mines are estimated at 339 million mt grading 8.4% P2O5. Associated with these mines are four phosphate fertilizer production plants, located at Araxá and Cajati and at Cubatão and Guará in the state of São Paulo.

Fosfertil also mines phosphate rock and is Brazil’s largest producer of phosphorus and nitrogen fertilizers, accounting for 22% and 23.4% of the country’s consumption of phosphorus and nitrogen crop nutrients, respectively. The company operates three phosphate rock mines: Catalão, in the state of Goiás, and Tapira and Patos de Minas, both in the state of Minas Gerais. Total production capacity of the three mines is about 3.4 million mt/y. Combined proven and probable reserves at the mines are estimated at 1.19 billion mt grading 8.4% P2O5.

Currently, Fosfertil is developing Salitre, a greenfield project in Patrocínio, state of Minas Gerais, with preliminary production capacity targeted at 2 million mt/y of phosphate rock.

Fosfertil produces phosphate fertilizer products that include monoammonium phosphate (MAP), diammonnium phosphate (DAP), triple superphosphate (TSP), and single superphosphate (SSP) at plants in Uberaba, state of Minas Gerais, Catalão, state of Goiás, and Cubatão, state of São Paulo. Fosfertil also produces urea in Araucária, state of Paraná, and ammonium nitrate in Cubatão.

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