| RIO DE JANEIRO
RIO DE JANEIRO Oct 5 Vale SA's plan to dispose
of fertilizer assets remains on track despite a request last
week by Brazil's state development bank, BNDES, to
analyze the transaction more carefully, according to two people
with direct knowledge of the situation.
Terms of the deal, which involves the sale of certain assets
to U.S.-based Mosaic Co, are unlikely to change
significantly, one of the sources said on Wednesday, requesting
anonymity to speak freely about the issue.
BNDES pushed back the vote on the fertilizer deal at a Vale
board meeting last Thursday, the first person familiar with the
situation said. O Globo columnist Lauro Jardim, without saying
how the newspaper obtained the information, reported that day
that BNDES had delayed the voting on the transaction to Oct. 20.
One of the people said Mosaic could pay about $3.6 billion
for some of Vale's fertilizer assets. The sale of other
unspecified operations within Vale's fertilizer unit is being
negotiated with Norway's Yara International ASA, the
first person said, without elaborating.
Both Vale and BNDES, which are based in Rio de
Janeiro, declined to comment, as did Mosaic. Yara said it did
not comment on market speculation.
Vale, the world's largest iron ore producer, is disposing of
assets to help meet a $10 billion debt-reduction target by next
year. The strategy was devised by Chief Executive Officer Murilo
Ferreira to help insulate the mining company against declining
iron ore and nickel prices, after losing a record $12.1 billion
Reuters first reported on June 17 that Mosaic was eyeing
Vale's fertilizer assets.
The transaction underscores how Brazil, the world's
fifth-largest fertilizer consumer, remains a key growth spot for
fertilizer and phosphate producers. Vale estimates that demand
for the products in Latin America's largest economy is expected
to grow twice as fast as global demand over the next decade.
Vale has fertilizer assets in Canada, Brazil, Peru,
Argentina and Mozambique. Mosaic bought distribution assets from
Archer Daniels Midland Co in Brazil and Paraguay last
(Additional reporting by Rod Nickel in Winnipeg, Manitoba;
Editing by Peter Cooney)