Saudi Arabia's Ma'aden Investment Creates Cross-Border Earnings Volatility for Mosaic

The Mosaic Company’s investment in Saudi Arabia’s Ma’aden has created a new source of cross-border earnings exposure for the U.S.-based fertilizer producer. The arrangement followed Mosaic’s decision to exchange its 25% stake in the Ma’aden Wa’ad Al Shamal Phosphate Company (MWSPC) for shares in Ma’aden, transforming Mosaic from a direct joint-venture owner into a shareholder of the Saudi mining company. (Mosaic Investors)

From Phosphate Joint Venture to Ma’aden Shareholding

The transaction was completed on December 24, 2024. Mosaic received 111,012,433 Ma’aden shares, valued at approximately $1.5 billion at closing, in exchange for its 25% interest in MWSPC. Following the transaction, Ma’aden increased its ownership of MWSPC from 60% to 85%, while Mosaic became a shareholder in Ma’aden with an approximately 2.92% stake. (Mosaic Investors)

The deal changed the nature of Mosaic’s exposure to the Saudi phosphate business. Instead of directly recognizing its share of MWSPC’s operating performance, Mosaic now has an equity investment whose value is influenced by Ma’aden’s share price and broader market conditions.

Mark-to-Market Accounting Creates Earnings Volatility

One of the most important consequences of the transaction is the accounting treatment of Mosaic’s Ma’aden shares.

Mosaic carries the shares at fair value based on the quoted price on the Saudi Exchange (Tadawul). Changes in that fair value are reported through non-operating income or expense. As a result, movements in Ma’aden’s market value can affect Mosaic’s reported earnings even when there is no corresponding change in Mosaic’s underlying fertilizer production. (SEC)

This creates an additional source of earnings volatility for Mosaic because its financial results can now be influenced by movements in a foreign-listed company's share price.

Significant Gains Have Already Been Recorded

The Ma’aden investment has already generated substantial accounting gains for Mosaic.

During 2024, Mosaic recorded a gain of approximately $522.2 million, net of transaction costs, from the exchange. In 2025, Mosaic reported $317.4 million of unrealized gains on its Ma’aden shares, compared with $28.3 million in 2024. (SEC)

These gains demonstrate how significant the investment can be for Mosaic’s reported financial performance. However, the same accounting mechanism can work in the opposite direction if Ma’aden’s share price declines.

Why the Investment Is Sensitive to Market Conditions

Ma’aden operates across mining, metals and fertilizer markets, meaning its valuation can be influenced by several factors.

For Mosaic, this creates indirect exposure to:

• Global phosphate fertilizer prices

• Ma’aden's operating performance

• Saudi economic conditions

• International commodity markets

• Investor sentiment toward mining and fertilizer companies

• Movements in the Saudi equity market

• Foreign-exchange considerations

Consequently, Mosaic’s reported earnings can fluctuate even when its own North American fertilizer operations remain relatively stable.

Cross-Border Exposure Adds Complexity

The investment also illustrates the growing financial connections between major fertilizer producers across regions.

Saudi Arabia has developed a significant phosphate fertilizer industry, while Mosaic remains one of the world's major phosphate and potash producers. Through the Ma’aden transaction, Mosaic retains economic exposure to the Saudi phosphate platform without directly owning its former 25% MWSPC stake.

Ma’aden's 2025 financial statements confirm that its ownership of MWSPC increased to 85% following the acquisition of Mosaic's interest. (Saudi Exchange)

Strategic Benefits for Mosaic

Despite the potential volatility, the transaction provides strategic benefits for Mosaic.

Receiving publicly traded Ma’aden shares gave Mosaic greater financial flexibility and exposure to the broader growth of Ma’aden rather than limiting its investment to one phosphate joint venture. Mosaic also stated that the transaction provided a more transparent value for its investment and greater capital flexibility. (Mosaic Investors)

The structure therefore allows Mosaic to retain an economic connection to Ma’aden while reducing its direct ownership position in MWSPC.

Implications for the Fertilizer Industry

The Mosaic-Ma’aden arrangement highlights how fertilizer companies are increasingly using strategic investments and cross-border partnerships to manage capital, expand market exposure and strengthen their global positions.

However, these structures can also make financial results more difficult to interpret. Investors need to distinguish between:

Operating performance:
Production, sales volumes, fertilizer prices, input costs and margins.

Investment performance:
Changes in the market value of strategic shareholdings and related accounting gains or losses.

A change in the value of Mosaic's Ma’aden shares may therefore have a meaningful impact on reported earnings without directly changing the company's fertilizer production or cash-generating operations.

Outlook

Mosaic's Ma’aden investment is likely to remain an important source of financial exposure in the coming years. The shares are subject to transfer and sale restrictions that will be released over a five-year period, meaning Mosaic's exposure will continue for some time. (SEC)

Future movements in Ma’aden's share price could therefore produce additional gains or losses in Mosaic's non-operating results. At the same time, the underlying performance of Ma’aden and the global phosphate market will remain important factors influencing the investment's value.

Conclusion

Mosaic's investment in Saudi Arabia's Ma’aden has transformed its relationship with the Saudi phosphate industry while creating a new source of cross-border earnings volatility.

The exchange of Mosaic's 25% MWSPC stake for Ma’aden shares generated substantial gains after completion, but the fair-value accounting of those shares means future movements in Ma’aden's market value can also affect Mosaic's reported earnings. (Mosaic Investors)

For investors and fertilizer-market participants, the key takeaway is that Mosaic's financial performance should increasingly be evaluated from two perspectives: the underlying performance of its fertilizer operations and the changing market value of its strategic investment in Ma’aden.