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1
Chemicals for the Non-Chemist
Plant Nutrients and Plant Nutrient Markets
Citi Basic Materials Conference
New York, NY
December 2, 2019
Andy J. Jung
VP, Market and Strategic Analysis
Safe Habor
2
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements
about the anticipated benefits and synergies of our acquisition of the global phosphate and potash operations of Vale S.A. conducted through Vale Fertilizantes S.A. (now known as Mosaic
Fertilizantes P&K Ltda) (the “Transaction”), other proposed or pending future transactions or strategic plans and other statements about future financial and operating results, fall fertilizer
application estimates and the benefits of the curtailment of potash and phosphates production. Such statements are based upon the current beliefs and expectations of The Mosaic
Company’s management and are subject to significant risks and uncertainties. These risks and uncertainties include, but are not limited to: difficulties with realization of the benefits and
synergies of the Transaction, including the risks that the acquired business may not be integrated successfully or that the anticipated synergies or cost or capital expenditure savings from
the Transaction may not be fully realized or may take longer to realize than expected, including because of political and economic instability in Brazil or changes in government policy in
Brazil, such as higher costs associated with the new mining rules and remediation efforts, or the implementation of new freight tables; the predictability and volatility of, and customer
expectations about, agriculture, fertilizer, raw material, energy and transportation markets that are subject to competitive and other pressures and economic and credit market conditions;
the level of inventories in the distribution channels for crop nutrients; the effect of future product innovations or development of new technologies on demand for our products; changes in
foreign currency and exchange rates; international trade risks and other risks associated with Mosaic’s international operations and those of joint ventures in which Mosaic participates,
including the performance of the Ma’aden Wa’ad Al Shamal Phosphate Company (also known as MWSPC), the ability of MWSPC to obtain additional planned funding in acceptable
amounts and upon acceptable terms, the timely development and commencement of operations of production facilities in the Kingdom of Saudi Arabia, and the future success of current
plans for MWSPC and any future changes in those plans; the risk that protests against natural resource companies in Peru extend to or impact the Miski Mayo mine, which is operated by
an entity in which we are the majority owner; difficulties with realization of the benefits of our long term natural gas based pricing ammonia supply agreement with CF Industries, Inc.,
including the risk that the cost savings initially anticipated from the agreement may not be fully realized over its term or that the price of natural gas or ammonia during the term are at levels
at which the pricing is disadvantageous to Mosaic; customer defaults; the effects of Mosaic’s decisions to exit business operations or locations; changes in government policy; changes in
environmental and other governmental regulation, including expansion of the types and extent of water resources regulated under federal law, carbon taxes or other greenhouse gas
regulation, implementation of numeric water quality standards for the discharge of nutrients into Florida waterways or efforts to reduce the flow of excess nutrients into the Mississippi River
basin, the Gulf of Mexico or elsewhere; further developments in judicial or administrative proceedings, or complaints that Mosaic’s operations are adversely impacting nearby farms,
business operations or properties; difficulties or delays in receiving, increased costs of or challenges to necessary governmental permits or approvals or increased financial assurance
requirements; resolution of global tax audit activity; the effectiveness of Mosaic’s processes for managing its strategic priorities; adverse weather conditions affecting operations in Central
Florida, the Mississippi River basin, the Gulf Coast of the United States, Canada or Brazil, and including potential hurricanes, excess heat, cold, snow, rainfall or drought; actual costs of
various items differing from management’s current estimates, including, among others, asset retirement, environmental remediation, reclamation or other environmental regulation,
Canadian resources taxes and royalties, or the costs of the MWSPC, its existing or future funding and Mosaic’s commitments in support of such funding; reduction of Mosaic’s available
cash and liquidity, and increased leverage, due to its use of cash and/or available debt capacity to fund financial assurance requirements and strategic investments; brine inflows at
Mosaic’s Esterhazy, Saskatchewan, potash mine or other potash shaft mines; other accidents and disruptions involving Mosaic’s operations, including potential mine fires, floods,
explosions, seismic events, sinkholes or releases of hazardous or volatile chemicals; and risks associated with cyber security, including reputational loss; as well as other risks and
uncertainties reported from time to time in The Mosaic Company’s reports filed with the Securities and Exchange Commission. Actual results may differ from those set forth in the forward-
looking statements.
The Mosaic Company
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High Quality Asset Portfolio
4
Phosphate Production
Potash Production
Distribution Facilities
Joint Ventures
Largest global finished phosphate and potash producer
#2 Phosphate capacity of 16 million tonnes
#4 Potash capacity of 11 million tonnes
#1 Premium fertilizer producer
Distribution assets in key markets
Global potash sales through Canpotex
Focused on The Americas
5
Leading position in Brazil:
Solidified through 2018 acquisition of Vale Fertilizantes
2018 sales of 9.1 million tonnes in a ~35 million tonne market
Largest in-country producer
Logistically advantaged production
Port ownership and access
Home base in North America:
73% of 2018 NA phosphate production
In 2018 in a ~10 million tonne phosphate market:
MicroEssentials sales of 1.4 million tonnes
Total phosphate fertilizer sales of 4.2 million tonnes
37% of 2018 NA MOP production
Plant Nutrients and
Plant Nutrient Products
6
Plant Nutrients
▪ Plant nutrients are plant food (and common chemical elements)
▪ 17 chemical elements are required for plant growth
▪ N-P-K: the carbohydrates-protein-fat in a plant’s diet
▪ Growing importance of secondary nutrients and
micronutrients, especially in high yield systems
▪ Each plant nutrient product is identified by three numbers,
referred to as its “analysis” – the percentage of each primary
nutrient contained in a unit of the product
7
Plant Nutrient Analysis
## - ## - ##
N P K
lbs Acre N P2O5 K2O S
Corn - 200 Bu Acre Yield
Grain 180 76 54 16
Stalks 90 32 220 14
Total 270 108 274 30
Soybeans - 70 Bu Acre Yield
Grain 266 59 91 13
Stover 77 17 70 12
Total 343 76 161 25
Wheat - 80 Bu Acre Yield
Grain 120 48 27 8
Straw 56 13 96 11
Total 176 61 123 19
Source: IPNI
Nutrient Removal by Crop
The Nutrient Challenge: Maintaining Soil
Fertility AND Safeguarding the Environment
▪ Soil fertility is maintained by
replenishing the nutrients
removed by crops each year
by following best practices
and the 4-Rs
8
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
70 80 90 00 10
lbs
K2
O p
er
Bu
U.S. Potash Use Efficiency on Corn
Source: USDA
Increasing Efficacy of Plant Nutrient Use (nearing maximum efficiency in the U.S.)
9
▪ U.S. farmers today are harvesting more than 2x corn per acre with the same
amount of commercial plant nutrients applied per acre in 1970!
0.8
0.9
1.0
1.1
1.2
1.3
1.4
1.5
70 80 90 00 10
lbs
N p
er
Bu
U.S. Nitrogen Use Efficiency on Corn
Source: USDA
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
70 80 90 00 10
lbs
P2
O5
pe
r B
u
U.S. Phosphate Use Efficiency on Corn
Source: USDA
Positive Demand Driver: Continued Ag Growth
▪ Strong and steady demand growth
▪ Stocks as a percentage of use
projected to drop to less than 17% by
the end of 2019/20
▪ The Food Story remains intact – the
world will continue to need to plant
more area and increase yields to meet
grain and oilseed demand.
10
12%
13%
14%
15%
16%
17%
18%
19%
20%
21%
22%
200
225
250
275
300
325
350
375
400
425
450
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19F
Percent
Crop Year Beginning in
Mil Tonnes World Less China Grain and Oilseed Stocks
Stocks S:U Percent Low 16% High 19%
Source: USDA November 8, 2019
Positive Demand Driver: Affordable Nutrients
▪ Agronomic necessity to
replenish NPK removed
by big consecutive
harvests worldwide
▪ ‘OK’ agricultural
commodity prices
prevailing today − Very affordable NPK prices
relative to ag commodity
prices
11
Less Affordable
More Affordable0.40
0.50
0.60
0.70
0.80
0.90
1.00
1.10
10 11 12 13 14 15 16 17 18 19
Plant Nutrient AffordabilityPlant Nutrient Price Index / Crop Price Index
Affordability Metric Average 2010-17
Source: Weekly Price Publications, CME, USDA, AAPFCO, Mosaic
Reminder: Commodity Markets are Cyclical
12
0
200
400
600
800
06 07 08 09 10 11 12 13 14 15 16 17 18 19
Commodity Price Comparison
DAP Corn
Oil Copper
Index 2000 = 100
Source: Fertecon, Fertilizer Week, The Market, FMB, CME, NYMEX
Nitrogen
13
Primary Nutrient Overview: Nitrogen (N)
▪ Production process: Energy
intensive Haber-Bosch process to
synthesize ammonia (NH3) from:
− Inert atmospheric N + H that is
typically sourced from hydrocarbon
feedstock (~3/4 is natural gas)
▪ 2019 global use estimates (Fertecon)
− About 181 million tonnes ammonia
produced, with ~75% used for
fertilizers
14Source: Fertecon
Source: Fertecon
0 20 40 60 80
China
Russia
USA
India
Indonesia
Mil Tonnes NH3
Ammonia Production 2019
Nitrogen Factors to Watch
▪ Chinese urea production and
exports, with the latter expected to
more than double in 2019
− Coal prices
− Decontrol of natural gas prices
− Environmental regulations
15
▪ Demand drivers
− Agricultural commodity prices
− Nitrogen use efficiency gains in China / India
− New substitute technology for HB process
▪ Indian policies
− Nitrogen subsidy
− Make-in-India initiatives (the restart idled plants)
0
2
4
6
8
10
12
14
10 11 12 13 14 15 16 17 18 19F
Mil Tonnes China Urea Exports
Source: China Customs; Mosaic
20
22
24
26
28
30
32
34
36
10 11 12 13 14 15 16 17 18 19F
Mil Tonnes
Source: CRU
Indian Urea Imports
Nitrogen Factors to Watch
▪ Absorption of new capacity
− USA – a new normal at ~16mmt
− Ramp ups in FSU, Africa and India
16
▪ Feedstock Costs
− European gas costs sharply higher in ‘18
− Convergence towards other benchmarks in ‘19
− Some analysts forecast divergence in ‘20
(supporting higher ammonia pricing)
0
2
4
6
8
10
12
14
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 1819F20F
$ MM Btu
Source: Fertecon
Natural Gas Costs in Key N-Producing RegionsEstimated Annual Average Price
Mideast (Low) Russia UkraineUnited States Europe (Formula) Europe (Spot Hub)
6
8
10
12
14
16
18
95 97 99 01 03 05 07 09 11 13 15 17 19F
Mil Tonnes
Source: Fertecon
U.S. Gross Ammonia Production
Nitrogen Factors to Watch: Trinidad Supply
17
▪ Production has been
rangebound for a decade
▪ Yara announces closure
of small 270ktpa plant
▪ Could a similar fate befall
others?
− Even if so (which we
deem unlikely), there are
also potential supply
offsets elsewhere0
1
2
3
4
5
6
7
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019F
mill
ion
to
nn
es
Trinidad & Tobago Ammonia Statistics
Production Exports Capacity
Source: Fertecon
Nitrogen Factors to Watch: Product switching
18
0
2
4
6
8
10
12
Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19
$ per ton N
Source: CRU
Fob Midwest Nitrogen Prices
Urea UAN Ammonia
0
2
4
6
8
10
12
Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19
$ per ton N
Source: CRU
Fob NOLA Nitrogen Prices
Urea UAN Ammonia
Phosphate
19
Primary Nutrient Overview: Phosphorus (P)▪ Production process – making
phosphorus water soluble
▪ Key inputs: phosphate rock mineral
ore, sulphur and ammonia
▪ Intermediate product: phosphoric acid
(for most products)
▪ 2019 global use estimates (CRU; Mosaic)
− Ag: ~45 mmt P2O5 or ~87% of total
− Feed/Industrial: ~7 mmt P2O5 or ~13%
of total
200 20 40 60 80 100
China
Morocco
USA
Russia
Jordan
Mil Tonnes
Phosphate Rock Production
2019
Source: CRU
Phosphate Fertilizer Producers Top 10
21
0.0 3.0 6.0 9.0 12.0
OCP
Mosaic
Guizhou Phos.
PhosAgro
Yuntianhua
Nutrien
Eurochem
Ma'aden (MPC)
JPMC
Yihua
Million Tonnes DAP-Equivalent
Based on 2018 production
P 2O 5 production based on PACID and SSP production
Source: Company reports, IFA, CRU, and Mosaic
22
Key 2019 Phosphate Trade Flows (DAP/MAP/TSP)
0
1
2
3
4
5
6
mill
ion
to
nn
es D
AP
-eq
uiv
ale
nt
World DAP/MAP/TSP Imports
Source: CRU
0
2
4
6
8
10
12
mill
ion
to
nn
es D
AP
-eq
uiv
ale
nt
World DAP/MAP/TSP Exports
Source: CRU
▪Top 8 countries represent 63% of imports ▪Top 8 countries represent 92% of exports
23
Phosphate Margins At Unsustainable Level
We calculate a DAP benchmark stripping margin from published spot prices for DAP, sulphur and ammonia.
It is a gauge that registers fundamental changes in the phosphate market over time and is not intended to
approximate Mosaic’s realized margins.
▪The benchmark DAP margin has
dipped below the $200/t threshold
▪This is well below the $225-250/t
channel that we have noted
previously as unsustainable long-
term
▪In the past decade, there have been
3 instances where sub-$200/t has
occurred, but note that the time spent
below $200/t was short-lived and the
rebound sharp
150
175
200
225
250
275
300
325
350
375
400
425
450
Jan-09 Jan-11 Jan-13 Jan-15 Jan-17 Jan-19
$ TonneBenchmark DAP Stripping MarginCalculated from Published Weekly Spot Prices
Source: Argus, Mosaic
24
Projecting a moderate demand recovery in 2020
60.3
64.3 64.664.0
66.8 66.6
68.5
70.1 70.4
68.5
68.0-71.0
55.0
57.5
60.0
62.5
65.0
67.5
70.0
72.5
10 11 12 13 14 15 16 17 18 19F 20F
Global Phosphate ShipmentsMMT DAP/MAP/NPS/TSP
Source: IFA; CRU; Mosaic
Phosphate Factors to Watch
▪ Chinese production and exports
− Market- and regulation-driven restructuring
− Pace of DAP/MAP/TSP exports slowing – 8.5mmt
Jan-Oct is down 8% y-o-y (~750,000 MT)
25
▪ U.S. imports
− Is ~3.25mmt the new normal?
− Just one good season of demand to clear the
channel and allow price recovery
+209
+297
+193+72+140
+153
+278
+129
+37
+28
-
500
1,000
1,500
2,000
2,500
3,000
3,500
1 2 3 4 5 6 7 8 9 10 11 12
Cu
mu
lati
ve
Im
po
rts
Month
U.S. Imports: Cumulative('000 tonnes DAP/MAP/NPS/TSP)
2014
2015
2016
2017
2018
2019
Source: Genscape; Mosaic
0
2,000
4,000
6,000
8,000
10,000
12,000
Ja
n
Fe
b
Mar
Ap
r
May
Ju
n
Ju
l
Au
g
Se
p
Oct
No
v
De
c
'00
0 t
on
ne
s
China DAP/MAP/TSP Exports
2016
2017
2018
2019
Phosphate Factors to Watch
▪ Capacity ramp ups
− Little new capacity for the next couple of years
▪ Raw materials costs
− Channel-bound ammonia
− Sulphur looks to stay weak
26
▪ Demand trends / drivers
− Brazil keeps growing plus gains elsewhere
− Balanced nutrient use initiatives
− Agricultural commodity prices (U.S. ag
economy remains healthy)
25
50
75
100
125
150
175
100
200
300
400
500
600
700
Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19
Sulphur$ LT
Ammonia$ Tonne
Weekly Raw Materials Pricesc&f Tampa
Ammonia Sulphur
Source: Argus
0%
4%
8%
12%
16%
20%
24%
28%
0
20
40
60
80
100
120
140
85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15 17 19F
Debt:AssetRatio
Bil $ U.S. Farm Sector Net Cash Income
Government Payments Market Debt:Asset Ratio
Source: USDA
Potash
27
Primary Nutrient Overview: Potassium (K)
▪ Production process: separation
processes with no chemical reaction
− For sylvinite ore, KCl typically is separated
from NaCl using flotation
▪ Key input: potash mineral ore− Shaft mines (~70% production)
− Solution mines (~4% of production)
− Surface brines (~26% or production)
▪ 2019 global use estimates (IFA; CRU; Mosaic)
− Ag: ~34mmt K2O (~83% of demand)
− Industrial: ~7mmt K2O (~17% of demand)
280 10 20 30
Canada
Russia
Belarus
China
Israel
Mil Tonnes KCl
MOP Production 2019
Source: CRU
Key 2019 Potash Trade Flows (MOP)
29
0
2
4
6
8
10
12
mill
ion
to
nn
es M
OP
World MOP Imports
Source: CRU*includes Canada to U.S. trade
0
5
10
15
20
25
mill
ion
to
nn
es M
OP
World MOP Exports
Source: CRU*includes Canada to U.S. trade
▪Top 8 countries represent 73% of imports ▪Top 8 countries represent 99% of exports
Prices trend lower in 2019 on weak demand;
stabilizing on producer cutbacks
30
175
200
225
250
275
300
325
350
375
400
425
450
475
Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19
$ Tonne KCl
Source: Argus
Potash Prices
fob NOLA c&f Brazil c&f SE Asia
31
Forecasting a return to trend growth in 2020
53.1
55.7
50.9
54.1
63.461.7 60.9
66.067.0
65.2
66.0-69.0
45.0
47.5
50.0
52.5
55.0
57.5
60.0
62.5
65.0
67.5
70.0
10 11 12 13 14 15 16 17 18 19F 20F
Global Potash ShipmentsMil Tonnes KCl
Source: IFA, CRU and Mosaic
Potash Factors to Watch
▪ Industry curtailments
and/or restructuring
− Closures due to depleted
resources, inflows or
economics
− Curtailments due to market
conditions
32
Announced 2019 MOP Production Curtailments (tonnes)
Low Case High Case
Mosaic6-Aug-19;
10-Oct-19Temporary idling 600,000 600,000
Belaruskali 5-Sep-19Up to 30% production
cut Sep-Dec400,000 1,200,000
Nutrien11-Sep-19;
4-Nov-198 week idling in Q4 1,000,000 1,000,000
Uralkali 20-Sep-19 Production cut in Q4 350,000 500,000
K+S23-Sep-19;
14-Nov-19
Up to 500kt
production cut in 2019400,000 500,000
ICL 24-Sep-19 Production cut in Q4 75,000 180,000
Total 2,825,000 3,980,000
Source: Company reports; Mosaic estimates
Production CutCompany
Announce-
ment DateAction
* Excludes Nutrien recent Rocanville idling
Potash Factors to Watch
33
▪ Ramp-up of new greenfield
capacity
− Canada (K+S Bethune)
− Russia (EuroChem Usolskiy and Volgakaliy)
− Others
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
17 18 19F 20F 21F 22F 23F
Mil TonnesKCl
Th
ou
sa
nd
s Source: IFA; CRU; Company Reports; Mosaic
Actual & Forecast Production From Greenfield Projects
K+S Bethune EuroChem Usolskiy+Volgakaliy
Turkmenistan Garlyk Belarus Slavkaliy + Petrikovsky
Potash Factors to Watch
▪ Demand trends / drivers
− Brazil keeps growing plus recovery/gains
elsewhere
− Agricultural commodity prices
− Balanced nutrient use initiatives
▪ Exchange rates
34
40
50
60
70
80
90
100
110
Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19
Index
Source: CRB
Key Potash Exporter Exchange Rates2014 Q1=100
Russian/Belarusian Ruble Canadian Dollar Euro
▪ Palm oil prices and rebound in SE Asia
shipments
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
15 16 17 18 19F
MMT KCl
Malaysia+Indonesia MOP Shipments
Indonesia Malaysia
Source: IFA and Mosaic
1,700
1,800
1,900
2,000
2,100
2,200
2,300
2,400
2,500
2,600
2,700
Jan-18 Jul-18 Jan-19 Jul-19
Rngts Tonne
Source: CRB
Malaysian Palm Oil PricesDaily Close of Nearby Option
35
Chemicals for the Non-Chemist
Plant Nutrients and Plant Nutrient Markets
Citi Basic Materials Conference
New York, NY
December 2, 2019
Andy J. Jung
VP, Market and Strategic Analysis
Questions?
Thank You!