Mosaic has joined in – as a buyer –with the fertilizer market's consolidation wave by paying Brazilian mining giant Vale $385m for a stake in a Peruvian potash project.

US-based Mosaic, which is controlled by agribusiness giant Cargill, will gain an economic interest of 35% in the open-pit Bayovar phosphate mine.

It will also get the right to buy 35% of the phosphate rock produced from Bayovar, which will have annual capacity of about 3.9m tonnes when it is completed later this year.

However, Vale, which also sold a 25% interest to Japan's Mitsui for $275m, will retain control of the project, with 51% of the voting shares.

Deal wave 

The deal follows a series of deals in the fertilizer sector, including CF Industries' takeover of Terra Industries in the US, and BHP Billiton's acquisition of Canada's Athabasca Potash.

Mosaic, however, which has an aim of increasing its "alignment of its global distribution network with its North American production assets" in potash and phosphate, has of late been more of a seller.

The group in 2008, with Investment Saskatchewan, sold Canadian nitrogen nitrogen group Saskferco Products to Norway's Yara International for Can$1.6bn, and last year disposed of its Thai distribution business.

In February, Vale bought Mosaic's interests in Brazilian phosphate group Fosfertil for $1.03bn, and an option on fertilizer production and bagging business Cubatao, in a deal in which some analysts claimed to see the hand of Brazil's government.

"We believe that the Brazilian government strongly preferred to see Vale control these assets," US broker Sterne, Agee & Leach said at the time, terming the deal "not ideal, but probably the best option" for Mosaic.

Foreign quest

Mosaic said that the Bayovar deal would spur the group on its quest to build up phosphate rock assets outside the US, where its Florida reserves are sufficient to cover 35 years' supplies.

"This transaction advances our strategic objective to secure additional phosphate rock outside of North America," Jim Prokopanko Mosaic chief executive

Analysts at National Bank Financial said that the deal would allow Mosaic to purchase phosphate rock at a "competitive price to its own Florida supply", which costs an estimated $50 a tonne to produce, on an ongoing basis.

"Presently, Mosaic purchases as much as about 1m tonnes of phosphate rock each year," the bank added.

Vale said the stake sales would "facilitate the offtake of product" from Bayovar.