Copebrás in Chinese hands

On the 28th April 2016 China Molybdenum Co. Ltd. (CMOC) reached an agreement to purchase Anglo American's Brazilian niobium and phosphates assets, Anglo Fosfatos, in a transaction worth US$1.5 billion. While it was ultimately the niobium assets that were the draw card, leading to CMOC paying a premium of around US$500 million, many of the bidders, including EuroChem, Mosaic, Vale and the various private equity firms involved, had shown a keen interest in the phosphate assets. These are seen to be profit-making operations with easy access to a market with promising long-term demand growth. The unexpected conclusion has prompted a number of questions, including: 

• Who is CMOC and why is it interested in phosphates?
• Why did Anglo American sell its phosphate assets?
• Why did CMOC pay a premium over other bidders?
• Will CMOC continue to operate the fertilizer unit or will it spin it off?
• Are there any structural changes that could be made to the business once the transaction is completed? 
• Does the breadth of bidders point to a renewed interest in phosphate assets? 
• How can potential bidders understand the core businesses better in other diversification or spin off opportunities? 

CRU's cross-commodities coverage of metals, mining and fertilizers, in addition to our detailed and robust cost modelling work, can help to answer some of these questions.

Vale Fertilizantes or Vale Fertilizers: ascention

At that time Lula was Brazilian President.
They told Bradesco´s Agnelli, then Vale´s CEO, to buy fertilizers.
Vale bought Bunge Fertilizantes, Fosfértil and Ultrafertil and Mosaic Cubatão plus the stakes of both Yara and Mosaic in Fosfértil.
US$ 6 billion (3.7 in Bunge, the rest mostly to Fosfértil and afiliates).
With Vale´s peruvian and mozambican phosphates and potash in Brazil, Canada and Argentina (projects) it would be one of big five.
But there will be history.
Dilma is ousted and rumours say eventually Vale will change direction.
The fact is that the conglomerate have Uberaba´s impressive complex, plus Cajati and Cubatão´s phosphoric and phosphates plants. Plus Araxá and former Petrobrás and Ultrafértil nitrogenate plants in Cubatão.
And now all news agencies say they are on sale.
Mosaic is not the sole bidder.
The fact is that there will phosphate plants in Brazil.
Eventually plants will be done from scratch again.
Now is time to buy cheap old plants.
And put money and be profitable soon.
Ciclycal business in cyclical environment.
I hope I will be there for a while, speak about Bayóvar, Catalão and Morocan rocks.
Phosphate, in fact, is more in fault than water and energy.
It is the salt of the Earth.