Yara International ASA (Oslo, Norway) has signed a Share Purchase Agreement with Eurochem Group AG (Zug, Switzerland) to sell its Salitre phosphate mining project for a cash consideration of $410 million.
Yara’s ongoing transformation has a strategic focus on food solutions, premium products and enabling the hydrogen economy. Salitre remains an attractive project, but as previously communicated the project progress has been impacted by Covid 19, and significant construction time and capital expenditure remains to reach completion. The Salitre divestment therefore supports Yara’s transformation by reallocating capital and risk appetite in the coming years towards Yara’s strategic focus areas.
“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 Chief Executive Officer of Yara.
Yara entered into the Salitre project in 2014, and its assets comprise phosphate mining operations, including tailing dam, with an annual production capacity of approximately 1,200 kt of phosphate rock and an on-going project to construct phosphate processing operations with a projected production capacity of approximately 1,000 kt per annum at completion. The estimated capital expenditure 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 the third quarter 2021 and that an impairment charge of approximately USD 400 million will be recognized 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.
By Mary Page Bailey
Source: chemengonline.com
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