RIO DE JANEIRO—Brazilian mining firm Vale SA said Monday it will sell most of its fertilizer business to U.S.-based The Mosaic Company for around $2.5 billion, the latest step in its effort to pay down debt amid the commodity downturn.
The deal brings an end to Vale’s one-time hopes of capitalizing on global population growth by producing the fertilizers needed to cultivate crops.
For Mosaic, the acquisition represents a key foothold in one of the world’s largest fertilizer markets and should help feed existing distribution networks in Brazil, said Floris Bielders, Mosaic’s Brazil president.
“If you want to grow in agriculture and fertilizers it has to be in Brazil,” Mr. Bielders said in an interview. “It’s the fastest-growing market and with the most upside to continue to grow.”
Vale, the world’s largest producer of iron-ore and nickel, had identified fertilizer ingredients as a strategically important business several years back. But it never got off the ground, accounting for just 8% of Vale’s overall revenue in the third quarter and posting negative earnings before interest and taxes.
The biggest setback came in 2013, when Vale indefinitely suspended a $5.92 billion potash-mining project in Argentina, known as Rio Colorado, due to high costs and political difficulties.
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