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The Globe and Mail

Vale scraps plan to sell fertilizer unit stock

Brazilian miner Vale SA said Wednesday it had scrapped plans to sell stock in its fertilizer division and would take the unit private, buying shares in the company it does not already own.

Vale plans to pay up to 2.2 billion reais ($1.4-billion U.S.) to buy out minority investors of Vale Fertilizantes, whose main asset is a stake in Fosfertil.

Vale Fertilizantes is one of Brazil's leading makers of phosphate-based food nutrients.

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"The next step will be to take Vale Fertilizantes private. Therefore, Vale is not considering an eventual listing of a subsidiary holding its fertilizer assets," the company said in a statement.

In 2010, Vale said it was paying $3.8-billion to acquire U.S.-based Bunge's fertilizer assets in Brazil, which included a stake in Fosfertil.

Vale has vastly expanded its role in potassium and phosphates, two of the three main fertilizer groups, as global demand soared.

Reducing heavy dependence on imported fertilizers is part of Brazil's effort to challenge the United States for the role of the world's largest food exporter.

Brazil is already the world's largest producer of beef, coffee, sugar and orange juice, the second-largest producer of soybeans and chicken and a major producer of cotton and pork.

The government has partial control over Vale through stock owned by a state bank and the pension funds of state-led companies in Valepar, the holding company that has a majority of Vale's voting stock.

Last year, Vale inaugurated the Boyavar mine in Peru, one of the largest phosphate deposits in South America.

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