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Yara sells Salitre phosphate mining project to EuroChem

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Global Mining Review,

Yara has signed a share purchase agreement with EuroChem to sell its Salitre phosphate mining project for a cash consideration of US$ 410 million.

According to a company statement, Yara’s ongoing transformation has a strategic focus on food solutions, premium products, and enabling the hydrogen economy. Salitre remains an attractive project, but 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.

Svein Tore Holsether, President and Chief Executive Officer of Yara, comments:

“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.”

Yara entered into the Salitre project in 2014, and its assets comprise phosphate mining operations, including tailing dam, with a production capacity of approximately 1.2 million tpy of phosphate rock and an on-going project to construct phosphate processing operations with a projected production capacity of approximately 1 million tpy 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 3Q21 and that an impairment charge of approximately US$400 million will be recognised 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.

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