Vale Says Speculation It May Buy Fertilizer Producer `Totally Unfounded'

Vale SA, Latin America’s largest mining company, said it’s not in talks to buy a fertilizer company amid speculation that the Brazilian miner may seek to acquire Potash Corp. of Saskatchewan Inc.

“Rumors about a bid to acquire a fertilizer company or about negotiations with the purpose of making a bid to acquire such company are totally unfounded,” Rio de Janeiro-based Vale said today in a regulatory filing.

Potash Corp., seeking to fend off a $39 billion hostile takeover bid from BHP Billiton Ltd., said today in a statement it began talks with other companies. China’s Sinochem Group and Vale made initial inquiries with the board last week about the possibility of holding talks, a person with knowledge of the matter said, declining to be identified because the information isn’t public.

Major mining companies have sought a bigger stake of global fertilizer output as Chinese-led demand for agricultural commodities boosts the use of crop additives. Vale this year acquired a controlling stake in Fertilizantes Fosfatados SA, or Fosfertil, from Bunge Ltd. and other companies, as well as other Bunge fertilizer assets in Brazil.

Vale fell 1.05 reais, or 2.4 percent, to 42.30 reais as of 5:07 p.m. of Sao Paulo trading, the lowest since July 27. Potash Corp. gained 0.4 percent to close at $150.20 in New York Stock Exchange composite trading. The stock has rallied 34 percent in the past week.

To contact the reporter on this story: Jessica Brice in Sao Paulo at jbrice1@bloomberg.net

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