My name is Jason Tremblay, and I lead the Mosaic Investor Relations function. We just like to thank everybody for joining us in person or online today. Before we get started, I do need to read our Safe Harbor Statement. We will be making forward-looking statements during the presentations and Q&A sessions. The statements include, but are not limited to, statements about future financial and operating results. They are based on management's beliefs and expectations as of today's date and are subject to significant risks and uncertainties. Actual results may differ materially from projected results. Factors that could cause actual results to differ materially from those in the forward-looking statements are included in our presentation published earlier today and in our reports filed with the Securities and Exchange Commission. We will also be presenting certain non-GAAP financial measures.
With that, we're excited to have you here with us today so that the executive team can share insights into our business, the changes in our business, and our strategy. It's been about six years since the last time we held an in-person Analyst Day, and there have been significant shifts in that time. Our agenda is packed today with details about how we are planning to redefine growth as a company and just excited for our leadership team to share that with you today. Now I'd like to welcome Bruce Bodine to the stage, our Mosaic President and Chief Executive Officer.
Thanks, Jason. Really, welcome everyone to Mosaic's 2025 Analyst Day. As Jason said, it's been, what, since 2019, so six years since we've had an in-person Analyst Day for various reasons that I think many of us understand. It is great to have you here today and the opportunity for us to offer more insight into our 2025 strategy and looking forward. A lot of changes have happened since that last time we were together six years ago on Analyst Day. One of the biggest changes is in our executive leadership team. My whole team is here today at different tables, mostly sitting up here. Please, I encourage you to interact with them today and ask questions, as I know you will.
Our executive team, for me, is one that I'm particularly proud of, given the diversity of backgrounds, the expertise that they bring to this business. Together, during my first year as CEO, because it's just been 15 months now, we took a hard look at our business model and the path to thriving over the long term. We asked ourselves, we asked our teams, we asked outside experts a lot of questions around what was working well and what wasn't, more importantly, probably working so well, and how should that guide our thinking on our capital allocation strategy moving forward. We came to some tough but important decisions to address the challenges that we were facing, not only now, but in the very near term. The good news is we don't see any of these challenges as insurmountable.
We're confident, as hopefully you see throughout the day, in our plan and path. We're excited to pursue the many opportunities that lie ahead for us. Let's start, and this is kind of a different way of presenting the way we're thinking about our business. There are three buckets on this slide. Go from left to right. On the left-hand side is commodity production. There's market access in the middle here. On the right-hand side is ag technology. I'm going to take a minute and just talk briefly about each of these, put a little more context around them. We'll start with commodity production, which many of you know and understand well from Mosaic of the past. This has been a core engine and driver for us for a good many years.
We have, and many know, competitive assets in Saskatchewan and potash with excess capacity. Our Esterhazy mine is one of the largest, most competitive, and innovative operations anywhere in the world. Through our autonomous mining technology that we have pioneered and brought to bear, we are able to operate inexpensively without needing a lot of labor and without requiring significant downtime. You look at the other big part of our portfolio, which is our phosphate production assets, both in the United States and in Brazil. We are able to provide millions of tons annually to the market across the globe. You will hear more from my colleagues throughout the day about our extensive work to optimize our overall production assets. In the middle, our market access.
It's really unrivaled and something that we've grown to appreciate more and more over time, and I think is maybe something that could be underappreciated out in the investor space. We view this today as a really unique competitive advantage. Our definition of market access is pretty broad, and it's kind of hard to have one singular definition around it. For us, market access means that we have a leading presence in the top agriculture markets in the world. We have an expansive product distribution network, and we have earned customer trust, which is incredibly important in today's market. It differs by geography.
As an example, in North America, the proximity of our operations to the major infrastructure for rail and ports on the Gulf of Mexico and the Mississippi River allow us to move product effectively and efficiently into the Midwest, where the major corn, soybean, row crops are grown. We also have there an abundant customer warehouse space and their retailer facilities conveniently accessible to the end grower. In Brazil, our direct-to-farmer and large-scale grower distribution model, supported by online buying capabilities, makes the distribution there reliable and within our customer's control, which is very important for the customers there. The real story here is the trust and relationships that we forge with our customers all around the globe. We have been building these customer relationships now for over 20 years.
That is something that I do not think many commodity companies, particularly in this space, do as effectively as I believe Mosaic has. It has served us well for all of these years. Now we are preparing to ramp up the benefits to our business. You are going to hear a lot more about that later in the presentation from Jenny Wang. That last bucket on the right is AG Technology. We built, in our opinion, the foundation to be a leader in this space by developing grower trust in our performance products like Microessentials and like Aspire. We have been doing this for many, many years. In fact, Microessentials is now over 15 years in the marketplace and is a really recognized brand on performance products.
What we hear from growers now is that they want Mosaic to provide their AG Technology solutions because they trust that the quality of the products that we bring will improve their profitability by increasing yields. They are saying, "Hey, Mosaic, we trust you to deliver value for our farms." That is why we are uniquely positioned to fill, in our opinion, the growing demand for biologicals as well. Customers know that our agronomic expertise and our R&D investments will guarantee that only proven products leave the laboratory and enter the marketplace. We are demonstrating this again today by devoting the same level of rigor and scrutiny to the effectiveness of Mosaic Biosciences' products.
There is another meaningful synergy here that I want to make sure we point out, is that these biologic products pair and complement very well with our commodity production, making their application kind of easy and intuitive and convenient for the end growers. To us, this is a big differentiator. With our existing access that we have, our brand reputation, and our distribution channels, you think about it, we already have the customers that these biologic products can go to and the customers that need it. Over a decade ago, we would have described our business model and our growth strategies probably a lot differently than what you might hear today. For example, in 2013, for those who were still covering Mosaic and maybe with us, we were not looking to necessarily increase our Brazil customer base.
Now, given our strong brand, given our trusted expertise, and commitment to digital tools, we've reached a level of kind of customer stickiness that primes us just for that growth. Our three business pillars, as you see on this slide, together create a highly connected framework. What we're focused on is right-sizing our investment strategy to maximize returns, capitalize on growth opportunities, and divest or scrutinize now with precision. This thing is sometimes sensitive, so it might okay. On this slide, you're going to hear a lot more about the initiatives and key decisions that are driving our current strategy and Mosaic's value growth engine. You can see that depicted on this slide. We're going to walk through the actions that are already in motion and the value and opportunities that these actions are creating, and then how we will ultimately capitalize on them.
The key areas for us on this slide, starting from the left, are normalizing our production and costs. That is first and foremost a priority of us in the short term. The second is reallocating capital for higher returns. The third is leveraging our market access, as I just discussed. Then the third is redefining growth. All of these are underpinned by very constructive macro trends that we will talk about more later as well. We are energized to execute this strategy, and our outlook is strongly optimistic. As I said, we are going to spend most of the morning talking and focusing on the factors within our control.
We will spend some time highlighting the megatrends in agriculture and related areas, as well as some of the fertilizer supply constraints, which I know many of you in this room is probably top of mind and something you really want to hear a lot more discussion around. At the end of the day, to put it simply, and I'll summarize for those who are going to talk more about it, we expect very constructive market conditions in the foreseeable future. In just a few minutes, Jenny Wang and Andy J ung will talk about these in more detail and outline how they see these tailwinds impacting our business. We're then going to move on and have Karen Swager come up and talk about the short-term actions that we're taking to normalize our production and costs by improving our reliability.
I know, again, that's probably if market backdrop and macro trends aren't top of mind, it's definitely how are you getting back to normalizing your production. Karen's got a lot to talk about in that arena, and we're excited to have her do that. Hopefully what you'll see is that we have a very well-defined plan to deliver better production volumes, which obviously, in turn, through that volume is going to bring down our costs. Better operating efficiency will unlock value that enables us to grow high-margin areas of the business and invest less in the areas that aren't generating those types of returns. As part of this discussion, our new CFO, Luciano Siani Pires, will also come up and talk about the value capture process from our digital transformation and the possibilities that this offers for us in the future.
It is important for you to understand the dependency between reallocating capital and the work we are doing to normalize production and cost. This interdependency enables us to address our portfolio imbalance, to build a resilient business and generate strong through-cycle returns while positioning us for growth at the same time. Luciano will again come on stage and join us near the end of today's session to explain not only our portfolio review, which is leading to the ability to reallocate capital. I know many of you who have heard Luciano talk over the last, say, few months since he has joined Mosaic are very intrigued. You can tell he is very passionate about this topic. He is going to come up and talk a lot about that. He is also going to bring it all together and summarize our overall financial strategy.
On the long-term value front, I think you'll find the information that we will be sharing by Jenny Wang and Floris Bielders very compelling. As I've said, one of our most significant competitive advantages is our unparalleled market access. Now, Jenny and our commercial team, props to them, have made and invested significantly with regional precision in a masterfully executed approach to delivering for our customers, building trusted relationships, and using our strong brand to solidify our position as an ag expert that provides innovative products. Those innovative products, as we talked about a few slides ago in those three kind of buckets of our business, where AG Technology sat. We are going to leverage our market access going forward to redefine what growth looks like at Mosaic. Growth doesn't necessarily mean growing our footprint or growing more assets.
It means generating earnings in cash by growing in new markets with new products and new sources by maximizing on the access we have earned and by building on the complementary nature of our overall product portfolio. That is why we see tremendous value potential in getting this right and in boosting our own value, our own cash flow, and our own stock price rather than exploring inorganic activity. Many of you in the room will definitely appreciate this and online. The best resource extraction companies create competitive advantage when they are well-positioned on all dimensions. Everything begins with access to good ore reserves and resources, a balanced portfolio, and a low-cost position to safely and responsibly deliver products to customers.
Over the last 20 years, we believe Mosaic has done a better job than most of our competitors of adapting quickly to operational technology and specifically using product technology to create a science-backed, trusted, and differentiated product portfolio, which has helped us offset profit issues during years of volatile commodity supply and demand and pricing. The business we've built has supported our ability to grow free cash flow per share, considering all of the factors that are facing us. Our go-forward strategy does as well. To reiterate again on this slide, which is where we started on this Mosaic value creation engine, we're focused on first and foremost in the short term normalizing our production and costs. Second is reallocating capital to maximize returns, higher returns. Third is leveraging our market access. Last is redefining growth, again, all in a compelling macro business environment.
We believe our strategy will have an outsized and significant impact on Mosaic's financial position through the highs and lows of the cycle. We are excited about the years ahead. Here is the lineup for today, kind of our agenda. We are going to give you time to ask plenty of questions. Rest assured, we have two built-in Q&A sessions, one built-in break, and then one kind of wrap-up Q&A for the entire group at the end of all the presentations. I encourage you in these built-in Q&A sessions, they are going to be built after certain subject matter. The panelists, if you can direct your questions to kind of the topics that were covered. At the end, if there are other more macro or bigger questions that you have, we can address the whole team.
I really want to thank you for joining us in our 2025 Analyst Day here in New York. Exciting for me to see each and every one of you be here. I'd like next to introduce Jenny Wang, our Executive Vice President of Commercial, and Andy Jung, our VP of Market and Strategic Analysis, to come on stage. They're going to talk about the constructive macro tailwinds. Thank you.
Thank you, Bruce. Good morning. Thank you for joining us today, either in person or online. Over the next 20 minutes, Andy and I will be talking about some of the macro trends. They are very constructive and provide a very favorable backdrop for Mosaic. There are a number of very important factors that are driving the growth of the demand to phosphate and potash. Mosaic's very well-positioned in this very constructive backdrop.
Population growth and also the concerns on food security have always been there, even if they are not really in the headlines. Along with the growth of biofuel, that is driving the demand to the global grain and oilseeds growth. The arable land per capita continues to decline, which requires the farmers to grow more oilseeds and grain and oilseeds on the same land, meaning they need to have a higher yield. That, in turn, translates to the demand to higher demand to phosphate and potash fertilizer. I also want to call out not only fertilizer growth that is supported by grain and oilseeds demand growth, but also there are competing demands for some of the nutrients, which is not for agriculture use, namely phosphate. Over the last couple of years, we are seeing a significant shift of phosphate molecules being moved away from fertilizers to industrial use.
We will talk about that. All this has set the stage for a very constructive phosphate market. It is going to be tighter for longer. In potash, the market is much more constructive than many of us or many of you have probably projected. We will get into that as well. With that, I want to invite Andy to get into some of the discussions that I mentioned earlier, especially on the demand side. Over to you.
Thanks, Jenny. I am going to dig mostly into the demand side of the ledger, what really drives demand for the products that Mosaic produces. First and foremost is very simple. It is population. Population worldwide, the growth is slowing. It has been slowing for a number of decades. It is still expected to add about 400 million people to the planet by the end of the decade. Those people will need to eat. They will need to be clothed. They will need to get around. Along with that population growth, we know that income growth, global economic growth will likely continue. There is a very linear relationship between population, income, and grain and oilseed consumption. Just taking those things together, we see an 8%-10% uplift in global grain and oilseed demand by the end of the decade.
As Jenny mentioned, at the same time, we're seeing arable land pulling lower or arable land per capita to the tune of about 6 percentage points by the end of this decade. That is a long-term trend that has been happening with urbanization, land degradation, and even climate change in the more recent decades. Those are highly probable to occur. What we think about in terms of yield, though, is probably the most important piece of this. If we go back the last 25 years, from 2000 to 2016, we saw global yields grow at a rate of about 1.7% per year. If we fast forward from 2016 to 2024, that rate of growth in terms of global yields slowed dramatically to just 0.4% per annum.
What the world is going to have to see is that yield reverting back to at least somewhat closer to that 1.7% historical rate, depending on what assumptions one uses in their demand forecast and feed and fuel usage forecast will depend on where you fall out with a final answer. At least 1.2 percentage points of annual growth in yield is what needs to be achieved. That will drive demand for fertilizer products or biological products that are in Mosaic's portfolio. We think about biofuels. Biofuels does not get as much attention these days as I think it really, truly deserves. One of the reasons is people, especially North American-centric people like those of us in the room, tend to be. This is not a North America story any longer. It is not the RFS that transpired roughly two decades ago.
This is going to be driven outside of North America. In fact, about two-thirds of our growth forecast is predicated in Brazil and the European Union. If you look at the chart over on the right-hand side, you can see a range of potential outcomes. That will depend on which assumptions one utilizes. In this chart, we've utilized the IEA forecasts, their main and their accelerated cases. That tends to bookend what most third-party forecasts look like. The yellow line down the middle is Mosaic's baseline forecast, so roughly right in the middle of those two bookends that the IEA provides for us. When we look around the world, though, again, I mentioned Brazil, the EU are the real drivers of this story. In Brazil, they passed their Combustivel de Do Futuro law last year.
That stipulates that biodiesel blend rates are going to rise to 20% by the end of the decade, so from 14% today or a percentage point per year. At the same time, ethanol blend rate stands at 22%. That is set to rise to 25%. They are actually looking at extending that to a 35% blend rate. If you think about the EU, again, this is codified in law. They have got a 32% renewable energy program mandate, of which 14% mandate in the transportation sector. I think one of the more important things, especially if we think about the next decade, is they do have a 5% biojet blend rate mandate for 2030. It accelerates as we move beyond 2030. In India, this has been a really, I think, undertold story. They were at an E10 blend rate, so 10% ethanol in their gasoline, just two years ago.
In 2022, they made E15 last year. E20 is the expectation for this year, 2025. They are studying extending that even further. E25 is the next target they are studying right now. They have also got a biodiesel blend mandate of 5% by the end of the decade. Indonesia, I think this story is relatively well understood. Just a couple of years ago, in 2020, they were at a B30 or a 30% biodiesel blend rate. That is now at 35% as of last year. They are moving to a 40% mandate this year. In 2028, the expectation is they will be at a 50% biodiesel blend rate. Lastly, North America, which again, not the biggest driver, but there is still some uplift potential in North America with an E15 year-round program, which may or may not be mandated in the not terribly distant future.
There is a lot of state-level initiatives, including in sustainable aviation fuel as well as renewable diesel, that will continue to provide some of that uplift in biofuel demand worldwide. Our expectation, there is about 15 billion gallons of additional biofuel demand by the end of the decade. To summarize the three main stools of ag commodity demand growth, you got the feed use, we got the fuel use, as well as the food use. What we box there is things that are really highly probable to transpire. The feed and the food use, that is highly correlated to population and global income. Those are very, very highly probable. Biofuels, our base case, that is just existing policies that are in place today. Again, very highly probable to occur.
Layered on top of that is if there are further supportive policies somewhere in the world that will provide for more biofuel growth by the end of the decade. Sum it up, there's about an 8%-10% growth in ag commodity demand. If you think about the midpoint, 9% growth, that's the equivalent of producing everything that Brazil produces today in terms of grains and oilseeds. The world needs, by the end of this decade, essentially the equivalent of another Brazil. We've already talked about that's not coming from new land. It's going to have to come from yield. Part of the way to get that yield is to adequately feed the plants. We showed demand here for both phosphate and potash fertilizers. We expect both of them to exceed 80 million tons of global demand by the end of the decade.
For phosphate, we think that's probably an uplift of about 7 million tons. It would be higher, but there simply isn't adequate supply that we see available in the world. Jenny's going to touch on that here momentarily. On potash, we'd expect roughly 9 million tons of new demand by the end of the decade. That puts demand at about 82 million tons, which is roughly in line with most third-party as well as other producer forecasts. We do see a very compelling demand story in order to allow the world to grow those additional grains and oilseeds that it's going to need. I will pass back to Jenny to discuss supply.
Thank you, Andy. As Andy mentioned, supply is really limiting the demand growth, especially on phosphate. All right. We're good. As I mentioned earlier, there has been a trend in the demand to phosphate over the last couple of years. That trend basically is the growth of some of the non-fertilizer use or industrial use of phosphate, and especially lithium iron phosphate as the battery that initially takes place in China. We anticipate this is going to spread over to other geographies due to some of the geopolitical reasons. Recently, some of the analysts probably have tempered down the growth of EVs, especially in the U.S., in North America. We believe, and it is expected, longer-term growth of EV and also ESS, energy stationary storage batteries, are going to continue to grow. The growth is going to be very robust.
Having that in the backdrop, LFP in the battery mix, adoption is going up as well. With this kind of a change of the EV ESS growth and also more adoption to LFP production, that has basically driven a growth of the demand of phosphate into batteries. Remember, one ton of LFP equals to almost equals to one ton of DAP fertilizers. I want to draw your attention to the right-hand side of the chart. If you look at 2020, LFP production almost did not exist. From 2020 to 2024, there were 2.5 million tons of LFP produced in China only. The growth of LFP in China in 2023 and 2024 was 50% every year. This year, the first two months, that growth rate was 70%. We believe this trend is going to continue.
My next slide on the supply side of the story is about Chinese phosphate export or availability. As many of you probably know, the Chinese export of phosphate was probably the single biggest driver, which is causing the tight supply situation for phosphate over the last couple of years. We often get questions from analysts or investors on whether the Chinese government is going to open the door, let the export flow. Our answer is probably not. I want to give you a very quick review on what happened in the phosphate industry in China. In 2015 to 2020, average Chinese phosphate export was over 10 million tons. In the meantime, there were a lot happened during that period of time. There was a very clear overcapacity, oversupply.
During that period of time, there was a big government measurement taken in place in order to deal with the environmental issue. Over 20% of total P2O5 capacities were basically shut down. This is a structure change. That capacities are gone, not there. As we get into 2020, like I mentioned earlier, we see the startup of LFP production. Over the last three, four years, we see Chinese export has taken a step down from over 10 million tons to around 7-8 million tons. The question now is going forward, what's likely going to be the export? I want to mention the current capacity in the country is already running at a very high operating rate. Even if they are able to squeeze out more tons, they will firstly need to meet their domestic demand growth.
Chinese domestic phosphate shipment has been growing over the last four years, almost 10% local consumption growth of phosphate in China. That is taking a higher priority in terms of the phosphate production from China. The Chinese government has been restricting export of phosphate over the last couple of years for a very simple reason. They want to make sure their own farmers in the country have affordable and available phosphate to use. Beyond that, they want to have the industrial use to be met. The remaining one is basically for export. Mosaic's expectation for the next five years, the export out of China will take another step down. We are talking about 2 million tons. Probably this is going to happen sooner than what we currently baked in our forecast. I know many of you are watching NDRC's news these days.
If I get a question later, happy to answer. Today's really focusing on long-term that we believe this is going to provide very strong support to the market. Last slide, I want to close the loop to say what is really the S&D for phosphate and potash over the next five years. It is a very busy slide. I try to explain you what we try to communicate. I want you to pay attention to both charts for the demand growth from 2020 to 2021. During that period of time, the trend growth for potash was 2.5% per annum. Trend growth for phosphate was 2%. That is the trend line for the growth. That growth did not continue in 2022, 2023, and probably in 2024. Those very simple reasons there was not supply out there.
Going forward from 2025 towards 2030, we projected two different scenarios on the demand growth. One higher scenario is basically tracking the same trend line for 2% for phosphate, 2.5% for potash. We also took a different scenario on the demand growth, basically simply take half a percent, half of the trend line growth as the lower end of the demand growth scenario. That is the lower line for P and K. Okay, let's look at the future. It is very clear. Given this demand growth projection, supply is really going to be struggled to really keep up to meet the demand growth. It is particularly true in phosphate. If you look at the phosphate going forward on the supply side of the picture, we included all the operating rate improvement for the producers like ourselves.
We included all the new projects as announced on phosphate from North Africa and Middle East. We also included all the speculative new projects for phosphate. Everything added up together, phosphate supply are not able to keep up to meet the demand even at a lower scenario. It is a very similar picture for potash. Although at the end of this decade, with much-needed new capacities coming online, we may see the supply of potash are able to meet the demand at the lower scenario. However, for potash, over the near term, there's no new greenfield project. Even for some of the projects being in the ramp-up stage, for example, Asia Potash in Laos, they're ramping. The ramping process is not as going smooth as they expected. Let alone a lot of other things happening in the supply side.
I would say it is always easy to forecast potash supply in spreadsheet than reality. Just look at what happened over the last couple of months. There are announcements from Belarus, Russia, China, recently Chile. The production reduction on potash has basically swapped out 2 million tons for this year's supply. That 2 million tons supply is gone for this year, supported a very constructive market. In long term for potash, 9 million tons demand growth is much needed, the new capacities to come in online to meet the demand. In short term, this is a very constructive market. I want to end the market update on phosphate. This tight phosphate market is going to be tighter and for longer, which supports a very constructive price and margin. With that, I'm handing this over to Karen.
Good morning. Let's talk about operations for a few minutes. Fully acknowledge we've disappointed you with our volume results over the last few years. We're on a path. We're on our way to recovering that volume. I'll go deeper, particularly in the phosphate side, but also talk about our potash and our Brazil operations. To start with, in order for me to help make sure you understand the improvements that we're making, I do want to spend just a minute to outline our production process. Won't take long. Promise I won't turn you into operators. I'll try. We have unit operations of phosphoric acid, sulfuric acid, and granulation in our plants. The sulfuric acid plants have three main products. The first, of course, is sulfuric acid. We need to make that in order to feed the process further down. We also produce steam.
Some of that steam goes to phosphate and granulation to further enhance those processes. The rest of it goes to power generation at our plants, which not only put electricity within our plants we consume, but we are able to send some of that electricity down to our mining operations and reduce our costs. The phosphoric acid plants, three main functions. The first is the reactor, where we take the rock, digest the rock with sulfuric acid to make two products, believe it or not, phosphoric acid and gypsum. We must filter that acid to remove the gypsum. We must concentrate that acid in evaporation in order to get the acid high enough strength to make our final product. Finally, granulation, where we combine the acid with the ammonia, perhaps some of our Microessentials ingredients, and we make our final granular product.
We're making improvements in each one of those areas. As we refer to them, I thought it'd be helpful for you to understand where in the process we are. Let's start here by looking back. If you think about five years ago, what were we doing? Where were we five years ago? The world was shutting down due to COVID. We had significant supply chain disruptions. We had significant employee illnesses. Factories shut down that made our repair parts. It was difficult for us to get the specialty alloys that we need in order to repair our plants. As a result, we had to delay turnarounds. Most of this impacted our sulfuric acid plants, but we also wound up delaying some of the phosphoric and granular plants that would go down at the same time.
As a result of these delays, and you can see clearly in 2020, we did fewer turnarounds than any year. Our asset health was reduced in these plants. It took us an effort to get those back. You see from this graph here, we accelerated our turnarounds in 2023 and 2024. As a result, we have much improved asset health in these sulfuric acid plants. As a matter of fact, we finally, last week, put sulfur on in the last sulfuric plant that we had to do catch-up repairs on, catch-up turnarounds on. Our sulfuric acid plant fleet is currently at capability to make 8 million tons. We are working through some of the challenges that we found in phosphoric acid as we pressed that accelerator and those sulfuric acid plants were back up and running.
We are working towards an 85-90% asset health standard. We will walk through some of the projects that we are working on to get there. I have already talked about the sulfuric acid turnarounds. We did repair some major components in those plants. I would argue the asset health there is very strong. Right now, actually at this very minute, we are in a turnaround at our New Wales plant, where we are doing some pretty extensive repairs on our west train phosphoric acid unit. We have a bit more work to do on the east and the third train. That will be completed by July. We are also working on some of our process infrastructure within that plant, our waste transport systems, our water transport systems to even further up that reliability. That work will be done before the end of the third quarter.
Our granulation units are operating well. We've got those turnarounds in place. I'm sure you're all aware that we converted our number five plant in Riverview to be able to make our Microessentials line, adding our capacity there. Back one more. A couple of other things that we're working on on our infrastructure is our electrical infrastructure. To give you an example of this particular work, in Louisiana, we had a catastrophic storm that came through last January and knocked the power out because a tornado took out power poles in that plant. We weren't able to do what's called load shed. We're putting load shed capability in our Louisiana plant so that we are further buffered from interruptions to utility power, and we get to keep our own power going. Finally, we're also investing in our employees. We had a lot of retirements during COVID.
We lost a lot of senior operations employees and process engineers. We have invigorated our training programs. We have simulations installed that are working towards training these employees even faster. We have also developed some AI tools that are helping us with troubleshooting our processes so we can find the problems when they're much smaller and fix them before they become much bigger. The circles that you see here represent where we believe we are at asset health at the end of 2024 and where we'll be at the end of quarter two in 2025. You'll see those circles have closed up considerably, particularly with the turnaround activity that we're conducting in the first half of this year. If you look at Bartow, they have just come out of turnaround, and they are probably our strongest performing assets right now.
Their reliability should be solid through the rest of this year and beyond. New Wales, we're doing the work I just talked to you about in the phosphoric circuits. That work should be done mostly by the end of quarter two, with a little bit left to do in early quarter three. That circle closes up quite a bit. We get much closer to that asset health standard. Riverview, a little more open because we do have a turnaround in October this year. By the time we get to the end of the year, that circle should look a lot like Bartow's. Louisiana, the same. We have our ammonia plant going into turnaround in October. With those reliability improvements, we will be there.
Our assets will solidly perform at the 2 million per ton quarterly rate at the end of quarter two in 2025. We expect them to stay there for the long term. To talk a little bit about how far we've come, because we didn't just start this process in the latter part of 2024. You saw the accelerated turnaround schedule that we had in 2023. I want to talk to you a little bit about 2024, an unprecedented year. We had four hurricanes hit our operations, three in Florida and one in Louisiana. All of those disrupted our production in some way. The latest took our entire production down. Why so many tons? It takes a while for us to reheat and get these plants back started when they do shut down.
It is quite a process, and it does involve several days of us ramping those plants back up. We had a fire at Riverview. We also had flooding at Riverview. I mentioned the tornado that we had in Louisiana. I'm really hoping for no more 2024s as far as significant events. All told, we lost 700,000 tons of production through these one-off events. Unpredictable and certainly uncontrollable. If we added those 700,000 tons due to those events back in, you would see progress that we've made in our asset reliability. We would be much better off for our production rate from 2024 over 2023. You'll also see on here that on 2025, we expect to again gain some production. By 2026, don't be misled by the slide saying 2027 estimate. We're going to get there in 2026.
We will be at 8 million tons of production. The good news with the volume, and Bruce mentioned this as well, is as we ramp our production up, we will lower our unit costs because a lot of our costs are fixed. By the end of 2025, I expect that conversion cost to be in the $95-$100 a ton range. We will continue to work on efficiencies and refinement in our costs and hopefully take another $5-$10 a ton off. Let's switch to potash. You're familiar with our potash, but just to review, Esterhazy is an absolute world-class mine. Great production, low cost, a lot of automation, very efficient. Our Belle Plaine site, a solution mine, delivers every day. We have the ability to push the accelerator with Colonsay when the demand needs some more supply.
We're installing some new technology in these mines. We are installing a hydrofloat circuit at our Esterhazy plant. This hydrofloat circuit will add 400,000 tons of capacity to our production at Esterhazy. This will be in the granular potash form, which has the higher margins. That project will be complete mid-year, and we will be ramping and commissioning it in quarter three. Once that project is implemented, we will be at a 9 million ton per year capacity rate consistently in potash. I also want to talk about our compaction circuit that we put in Esterhazy. This project was completed last summer and was commissioned last year as well. This compaction circuit adds 500,000 tons of compacted product to our portfolio at Esterhazy. There is a $20-$30 a ton margin above the standard product that we would make prior.
Another really positive project for us. The project that the product that both Brazil and North America prefer. Last but not least, I want to talk about what we're doing with our operations in Brazil, highly related to our cost reduction initiatives that we've started. We'll start with the fact that we are limiting, if not eliminating, our imported rock into our mines in Brazil or into our plants in Brazil. This is significant savings for us. We started this last year, and we are at run rate this year. We are doing mine planning optimization really across the board, but a big focus on our Patrocinio mine, where we are seeing great improvements in our cost structure due to that mine plan and great optimization.
We kicked off a labor efficiency project in Brazil in 2024 and captured 10% savings there in 2024 and expect another 5% savings through the first half of this year. We've also worked on process improvements, raw material efficiencies, and maintenance process improvements. We're using online analyzing tools for our equipment, again, to enhance our reliability and make sure we can identify small problems before they become big problems we have to solve. All combined, we expect to save $100 million-$120 million in costs in our Brazil operations. In closing, we have a solid plan to deliver our historical volumes, and we are making great progress on that plan. We expect to stay on this plan and continue to drive our costs down in the future. Now I'd like to hand it over to Luciano to talk about our digital transformation.
Thank you.
Let me stay here before you go to that very dense slide just to speak a little bit. We have talked so far about normalization of production and costs, right, which is by definition becoming back to normal. We do not want to be just a normal company. We want to go beyond normal. Mosaic is a heavy user of technology in that direction. So far, many companies talk about technology, right, about digital transformation, about digital acceleration. Consider this, and that was mind-blowing to me when I arrived. Mosaic has just finished a $300 million investment to revamp its entire enterprise business software platform over the past three years. That goal line happened last year.
Yes, we're going through some of the glitches, but we're going to be ready by the end of Q2 with state-of-the-art business enterprise platforms in order to employ technology to reduce our costs. We're expecting already by the end of this year about $70 million in run rate from technology applications. This is going to be just the beginning because these tools, they really open up the horizon for a lot of things. That business slide now, I'll try to explain what this is because I was trying to grasp it as well by coming into Mosaic, what we have done. On the left-hand side, we have this enterprise process and data reengineering. If you talk to the consultants, they will tell you that any large transformation in technology requires this, right?
It's basically you go and you look at all the hundreds of databases that the company has and you revamp all of them to make the applications be able to talk amongst themselves seamlessly. That was the basis to implement three different tools. First, the new version of SAP S/4HANA. I bet you that the companies that are in your coverage and the companies that you invest in, 90% of them are still in the older version of SAP. This is the SAP, again, state-of-the-art with artificial intelligence embedded enterprise software. Mosaic also implemented the O9 supply chain platform. O9 is a fast-growing tech company based out of Dallas, which is now becoming the de facto standard for supply chain management in industries where supply chain is very complex, such as Mosaic, for example.
Over 2,000 customers in Brazil, all that you're going to hear a lot about the complexities of our distribution network. We have implemented Salesforce in order to manage all the interactions with those customers through many different channels. The reason I put another bucket there, artificial intelligence, which is not an application per se, but it's the recognition. If you talk to consultants, they will tell you, look, it's easy to do a proof of concept of artificial intelligence, but the difficulty is in scaling up AI applications and embedding it in your processes. Because we have all of this and all of those tools already have AI capabilities, we believe now that we're open to floodgates to use AI very extensively in the organization. We have a number of very concrete value capture opportunities.
I'm not going to go into those, but just call your attention. Most of the gains come from the ability now to do real-time stuff, to get real-time data and to optimize everything real-time. For example, in the supply chain, you see there O9 supply chain, our sales and operations planning today is a monthly cycle as it used to be. It used to be in every company and with weekly adjustments. We're going to be able to do sales and operations planning by the minute, right? We're going to know exactly where our inventory sits in the supply chain. Because today, for example, what is available to sell or available to promise our customers is usually underestimated. We lose the opportunity to make some sales because we don't have real-time data.
The pricing, for example, prices in the market, they change by the minute, whereas our price lists are only updated maybe on a weekly basis. When prices go up, like you lose the opportunity to charge more for your customers. When prices go down, they back off and you lose sales. All those things are going to be corrected. By the way, the margin optimization exercise is going to be made real-time. We're super excited to go after that starting in the second half of this year. Now I'm moving to the closing of the first block. This is just a summary table of all the opportunities and the ABDOP lift that we talked about. The midpoint, if you add the midpoints of all of these numbers, you get to the $650 million ABDOP lift that you see on the header, right?
What is most exciting, if you look at the right-hand side, most of the timeline for capture is starting in 2025 and going into 2026. We believe there is a very interesting story here. We would like to stop now and start a Q&A session, especially to cover Bruce's opening remarks and all that story about the market backdrop and the normalization of production and costs. I invite my colleagues to come here on stage, right, so we can address your questions. We have John Tong as a microphone and Bruce Robinson from our IR team also has a microphone.
I would like you to announce your name and your firm before you ask your question.
We have about 10 minutes during this session. Okay.
Thanks. Thanks, Lucas Beaumont, UBS.
I just want to go back to the medium-term demand trend forecast you had on slide 21. You are kind of projecting out the 2% on the phosphate side and 2.5% on the potash side. Depending what year we choose there as the baseline, you know, if it is like 2018 versus 2020 and you run that through, you can kind of get a pretty different kind of outlook there. Also, just the long-term kind of fundamental underpinnings of that population growth, those sort of things are kind of maybe slowing down a bit in the medium term. I just wanted to understand how you are kind of squaring those couple of factors to give you confidence in that long-term demand growth trend. Thanks.
No, Lucas, I think we got the essence. I will definitely turn over to Andy and Jenny to answer the details.
Yeah, sure thing.
I think the best slide to kind of think it through is using the slide that Jenny presented at the end, showing both the supply and the demand trends. You're right that depending on what year you use as a base, your growth rate will look different. Generally speaking, we know that historically potash grew at 2-2.5%, phosphate grew at kind of around 2%. Maybe those are slowing down a bit as you move forward. Certainly we put that scenario out there. We took those historical growth rates and cut them in half. I think that that's probably more aggressive than one should cut those growth rates simply because of that yield enhancement that we need to see going forward.
Even some of the conversations Jenny and I have had with people on the grain origination side of things, they believe that those reductions in fertilizer use or that slowdown in fertilizer use growth rates over the last, call it 10 years, is one of the large drivers or most important drivers of that big slowdown we saw in yield growth from normally 1.7% a year down to under half a percent per year. To reiterate, I think those growth rates, even at that half, cutting it in half in the forecast that Jenny showed is probably too aggressive given what we think is very well underpinned grain and oilseed demand growth.
Okay, next question.
Chris Parkinson from Wolfe Research. You have been on this operational improvement journey for about two years now.
It seems, at least to many of us, that you're basically in the final stages with New Wales and Riverview and everything. Can we just take a step back for a second and just say, through everything this company's faced and four hurricanes, I thought it was three, but it's been a lot. What's the current assessment of saying how confident are you in the second half run rates that you put out? And probably just as important, how confident are you as once you hit those numbers that we're going to stay there for the foreseeable future? Thank you.
Yeah, Chris, I think let me start and then turn it over to Karen because this is right in everything she's been talking about.
There is definitely some, as we push the accelerator down, you know, we got the sulfuric plants back to where we feel we needed to be with that last turnaround today and we are on, or this quarter on that three-year cycle. The importance of sulfuric is, you know, as Karen described, it has multiple purposes. As we have talked about over several quarters, you know, trying to thread nine to ten turnarounds in these last two years and still make production because you still have to have steam and heat to evaporate has been really quite a challenge. Now that that is reliable, we put the pedal down, run into some little obstacles and bottlenecks that we are addressing in phosphoric acid that Karen talked about. If you see coming out of quarter two, our asset health is in a place that is exactly where we want to be.
That's where we were prior to COVID. That's where our history shows us that we can run at those ratable rates. I feel really good about that opportunity. In addition, we're doing some enhancements and some improvements that go above and beyond what we even had in place back prior to COVID. I do not want to get too optimistic on the upside. I think we're pretty happy because rock quality has had some offsets in this period of time. To stay within that range, I feel pretty good about that. Karen, see if you got anything to add.
The only thing that I would add to that is we've done a really extensive review and have developed asset strategies for our major assets and our major units. They look good.
I mean, we're in a scenario where we're going to be maintaining as opposed to accelerating those repairs. Also, to be on the right turnaround sequence helps us from a labor perspective and availability of parts perspective. As Bruce mentioned, those two years where we did that extensive repair, I mean, people would go from one turnaround to the next turnaround to the next turnaround, and it was quite a process. I am highly confident that it stays there when we achieve it, the production rate.
Okay, next question.
Yeah, I have one, Andy and Jenny, just to follow up on that supply and demand outlook that you have for P&K. Andy, you highlighted there was the potential for demand growth to slow. Can you comment on three other potential variants? One being, could there be any acceleration in supply?
You had modeled what you think is coming over the next five years. Is there any potential for an acceleration of that new supply? That is one. Another one being, the last couple of years has been a significant level of under-application. Is there any need for some replenishment in the world? Maybe comment on that one. The third one would be, do you see any potential risk in phosphate demand from your product and biosciences that could solubilize that phosphate that is already there?
Yeah, Steve, I will turn these again over to Andy and Jenny because I think they are well prepared for that. Thanks for your question.
Let me take the first one, the last one, and I would let you address the second one.
On the supply side of the assumption, Steve, it is highly unlikely on the phosphate side to see the acceleration of the supply addition. As I mentioned, in our forecast, we included the operating rate improvement. The stuff that we are just talking about, Karen was talking about, the improvement like Mosaic itself, we included in full. Second part, we included the announcement by OCP and Southeast for their new projects. We included all of them. We also included some of the speculative projects in the Middle East. We added up all the capacities. It does not look like there are new stuff out there. The last thing I would say, as many of you are the expert, to have acceleration of phosphate production, it probably takes years, not months. Potash, very well projected. Even many have projected significant new capacities coming online.
The ramp-ups always take time. It is proven on what is going on in the near term, right? To your question on the acceleration of the supply, especially on phosphate, it is highly unlikely. I would let you go for the yield. Yes, the second one. I will do the last one.
Steve, one of the best things to look at is that yield growth curve. We talked about it in one of the early slides presented. You could see that global yield slowing down even before the last several years where we saw supply constraints really pulling back on the ability of growers around the world to fertilize. It already looks as though there was under-application of nutrients in certain parts of the world. We understand that even with our distribution businesses.
I think that's almost a foregone conclusion that the world had under-applied both P&K nutrients. That was one of the reasons that drove lower yield potential globally. Going forward, it's one of the reasons we think using even that 50% or giving the historical demand growth rate a 50% haircut seems entirely too aggressive if the world is going to grow what we think it needs.
To your third question on the phosphate use efficiency, we will talk about this in the next session. Very low percentage of the phosphate applied on the crops is being absorbed by the crop in the first year. What we do with our biological products, especially Powercoat currently in the market, and also PSB in the pipeline, are basically help to make the phosphate tied to the soil more available for the crops to absorb at the beginning.
Basically, it is a game of improved efficiency of the utilization of phosphate in the soil. That worked, especially over the last couple of years when the under-application occurred. Some of the biologicals really helped to basically unleash some of the phosphate tied to the soil to make them available so that crops can uptake in order to realize the yield. In short, Steve, we do not believe the biologicals are going to reduce the demand for phosphate for that factor on potash as well. It is a very different story on nitrogen.
We are going to take one more quick question, if that is okay.
Ben Isaacson from Scotiabank. Thank you for my question. You have talked about, in phosphate, you have talked about the improvement plan. You have talked about the process.
If we ignore the 700,000 tons due to weather, can you confirm or can you talk about, because I think this is very important for investors, there's a lot of confusion. Can you talk about whether all the issues have been controllable and whether they've been due to a lack of maintenance, or are there structural issues with ore quality or grades, mine design, mine plant, skilled labor potentially turning over? I just want to really parse out what is within your control or has been and what is not. Thank you.
Yeah, Ben, great question. If we're not being clear, I think you could give us an opportunity to be clear. This is great. It's highly within our control.
I mean, yes, the weather stuff, putting that aside, as you said, and just assume we would have been at seven, a little over seven million tons last year, we would have seen a lot of progress. The labor issue is even within our control. Yes, we had kind of a higher turnover than maybe, and I think other companies around the globe experienced that post-COVID, put a lot of pressure on our recruiting and upskilling and training programs. As Karen talked about, we've got a hyper focus on that and doing a lot of good things. I think there's nothing on ore quality, nothing on mine planning, and any of the technology that exists at the facilities or in the mining areas in Central Florida and Louisiana that are significant barriers to achieving that run rate.
As I said, ore quality has dropped a little bit in Central Florida. We're getting more production out of our Peruvian operation, which is a little bit better, a little less silica content. Those things neutralize themselves in some ways, but there is more than enough kind of historical buffer capacity. If you even look back to, I think, 2019 and 2020, we were well over 8 million tons with the same footprint that we have today. We just got to get truly the reliability and get it where we've proven it from sulfuric acid all the way through granulation on a consistent basis. That is within our control. Karen, if you have anything to add.
No, the only thing I might add is that we've done a lot of work around the rock impurities and the mine plan.
I'm very comfortable that we can process the rock that we need to make the quality products that we make.
Just two observations. Karen, you mentioned a fire. Just to make clear, that fire was not created by any electrical problems or the like. It was also uncontrollable.
Not electrical. It was not unelectrical.
It was a brush fire. It was a brush fire. Yeah, exactly. Waste area. And just a testimony. I come from other companies in the mining industry, and backlogs take lots of years to recover because once you are behind in your maintenance schedules, things start to break, and it actually prevents you from doing the work that is necessary to recover the backlog. It is not uncommon that when things go sour, you take three, four, eventually five years to recover backlogs. That's what's happening here.
I think to Luciano's point, I mean, you saw in that graph it was 2023 turnarounds that we only got to execute. That year was scheduled for heavy turnaround, six, seven turnarounds. All of that disrupted. How do you then thread back in without taking even a higher production hit? That was the dilemma. I mean, that was the kind of losing sleep at night type moments for many of us, is how do you do what you know you have to do and still be able to deliver some type of product to the market? Yes, unfortunately, hurricane activity was high last year. What do you do about that? We are just pressing through and continue to stay committed to the things that are, like you said, Ben, within our control. That is what we are doing.
I feel pretty good about where we'll be at the end of Q2.
Thank you. Okay. Thanks, everybody. We're going to take about a 10-minute break now. If we can get you back in about that amount of time, we'll start back up with our next session. Thank you.
Thank you. Good job. Very good job. Good sessions.
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Excuse me. Take everybody back into the positions we're going to get going in just a minute. Thank you.
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Okay, everybody. We're going to get started again. Just like that, you're welcome back. Second part of our session today. After that great overview of the markets and kind of our operations and where those are at, we're now going to switch over and move over into kind of what is driving our future growth. To do that, I'm going to welcome Jenny Wang to the stage, our Senior Vice President of Commercial.
Once she has given her first presentation, she is also going to be joined by Floris Bielders, Vice President of Biosciences. For the Q&A, we are going to ask Jeff Wheeler, our Vice President of Biosciences Commercial, to join as well. With that, please welcome Jenny to the stage to get us kicked off.
All right. Let's talk about market access. I think this is probably the first time Mosaic talks about market access. As Bruce mentioned earlier, market access in the past for Mosaic was just a means of post-through our production, either product produced in the U.S. or in Canada. Today, I am very happy to share with you our new strategy on market access. Market access has always been one of the strategic advantages Mosaic has. Today, we are positioned to take an even greater advantage from the market access.
Bruce mentioned earlier as well, to give a definition of market access, probably 100 people have 100 different answers. For Mosaic, market access is more than the access to the ports or to the rail. We have a very unique differentiated advantage on market access. What differentiates Mosaic from other commodity producers? Number one, we have earned and built a long-time relationship with the customers, the customers who trust us in the four largest ag markets: U.S., Canada. We group them together as North America, Brazil, China, and India. We are there. The second differentiation differentiates Mosaic from other commodity producers is we have a legacy on product innovation. Microessentials, this is a value-adding performance product, phosphate product. We've launched this product 15 years ago. This is the single biggest brand in the crop nutrition industry. It covers 75 million acres last year.
The sales net revenue of Microessentials last year was $1.8 billion. That was the single biggest brand in the industry. Today, we are building on the market access and launching and fast-growing our bioscience product. Only after two years in the market, we have reached 9 million acres for our bioscience product in the market. It is a super exciting opportunity for Mosaic to grow our value and grow our margins for our shareholders and also for our customers. Mosaic's market access is very tailored in different geographies. In North America, this is where our major productions are at. We have a very expansive network logistically. We have direct access and control of over 500 warehouses in the market. As many of you probably know, we produce phosphate and potash 365 days a year.
For the farmers who use phosphate and potash in specific regions, it's only four to six weeks. How do we proactively and strategically place position our producer tons in the market close to the customers and get the best network net back? That is the strength that Mosaic has. With that, we are the clear leader in North America for phosphate and potash. We've been growing performance products, including Microessentials, including Aspire over the last years. Today, with this market access, we are going to continue to grow our bioscience product. From today, we will start to make a price tag to every single piece of the strategy that we're talking about on market access. We see the value that can be created through our market access and with a higher margin and higher earnings. In North America, the growth of our business, it's not commodities.
The growth in North America by leveraging our market access is really on performance product. We had 24% of our sales last year sold in North America, 24% of them, they are performance product. And this performance product gives us $30-$40 per ton premium over commodities. Going forward, we're going to continue to grow Microessentials. Like many of you know, Microessentials' sales was limited by our capacities to produce. Now, with the completion of our Riverview conversion capacity last year, we are in the position to further grow Microessentials in North America and also in Brazil. Apart from Microessentials and Aspire, we've been investing in R&D, in researching and developing next generation of performance product, which does include biologicals on phosphate and biologicals on potash. We will talk about this in the next session.
In North America, we're looking at $100 million EBITDA uplift in the next five years. Let's shift into Brazil. Brazil is the single biggest growth engine of our agriculture in the world. We've been in that market for over two decades. We have developed a very sticky, close, long-term relationship with the customers, those customers including mega farmers who are end users, but also we work with co-ops, work with the grain traders, and also with the distributors. We are the largest local producer for phosphate and potash in Brazil. We also have 20 blending facilities located in the most important ag regions in Brazil. Lastly, as many of you probably heard from us, we are investing in a brand new blending facility in Paramonte, which is in the northern part of the country. That is the fastest growing region in Brazil.
That Paramonte project is going to be up and running in the second half of the year. Apart from these blending facilities giving us the advantage of serving the local market, we do have ownership or long-term agreement with the port in Santos. This ownership and long-term agreement gives us the opportunity to avoid paying a huge demerit bill, which many have to pay. We do not have to pay it. Our blending facilities located in the market give us a huge freight-saving opportunity to serve the local market. Now, I want to acknowledge the last couple of years have been tough in Brazil. You have seen many reports on the business losses, asset write-offs, credit issues, and some of the companies went bankruptcy. Mosaic has really outperformed in the industry. I do not need to tell you more. Just look at our financial performance from our fertilizers segment.
What made Mosaic different than others? Our customer relationship, very long-time sticky customer relation, and they trust us. The second part is our footprint, as I mentioned earlier. Third, we have a very structured, disciplined risk management practice. We manage risk not only on the credit, but also commodity positions. Lastly, I would say we have the best-in-class local team that really made Mosaic different in Brazil. Going forward, probably there's no disagreement that Brazil is going to grow. In terms of the fertilizer shipment growth, the trend line is about 3% year over year. If anyone has suspicion, think about last year. Last year was a year full of dramas, a lot of issues. The market reached, repeated the record shipment in 2024, which achieved in 2021. It is a very strong market.
Mosaic's unique business model, the platform that we've built over two decades in Brazil, will give us the opportunity to outperform this market growth. We're looking at 11% of the annual growth rate over the next five years. This growth, where the growth is from in Brazil, you may see our ambition of growth market share from 16% to 24% by the end of the decade. The growth is coming from new territory, new regions, northern part of the country, new customers, new crops. It is also from the existing customers that we grow our volatile share. How we grow the business in Brazil, it is including the distribution growth, but also including performance product growth. With all the growth that we projected, we're looking at $100 million-$150 million EBITDA uplift by the end of the decade. Now, let's move over to China and India.
We rarely talk about these two markets, our two distribution businesses in the past. China and India have one-third of the global population. They all need to eat. We are there. We are there to meet our mission and also deliver for our shareholders. India was and is still the outlet for phosphate produced in the past in North America and also produced in Saudi with our joint venture partner. India is a growth market for potash as well. China, on the other hand, is a massive, very diversified potash market. It is growing. For people outside of China, they always think, "Oh, it is an annual contract. So what?" Potash sold in China is into a very different end user segment.
Mosaic is there to capture the downstream value by selling potash into different end users, which include our white potash produced in BioPlant, which sells into a very diversified industrial use market, even crystal granular potash produced in Esterhazy. Mosaic China sells this potash in China as a premium product because of the water solubility. The growth in China is not only the volume, but also value. Lastly, I want to say our growth in China and India is very targeted, very selective. We're not growing everywhere. We're not going for everything. We really target at the growth of performance product, potash. Very important, the market access, the products that we're selling in these two countries provide a real estate for our biological product. We will talk about this in the next session as well.
Overall, in these two distribution businesses, we expect to deliver $60-$80 million EBITDA uplift by the end of the decade. To get everything together, sum this up, we see market access as a source of value, a source of earning going forward. Combining the business that we have in the full market today, we are expecting to deliver $300 million EBITDA uplift by the end of the decade. We expect market access to become a major growth engine for Mosaic going forward. With that, I'm moving over to the next session, which is redefine growth. I want to invite Floris to the stage. This is probably the very first time we are talking about Mosaic's biosciences with our investors. Please. I want to show a small video.
The biological sector of the fertilizer industry is important because it is the biology that moves the fertilizer to the plants. When I see a company like Mosaic wanting to get into biologicals, they're enhancing what their primary products are. I think it's commendable that they have adapted into the biological side of things, realizing that it's enhancing what they've been doing for years. What made us want to try BioPath again this year was, for one, the results from last year. We really liked how it performed. We liked the philosophy behind it. It makes a lot of sense to us, especially in our niche area. Quite frankly, Mosaic as a company has a really good reputation. I mean, the biggest thing also with biologicals too is we've seen where some of these biologicals have actually helped our soil levels and our tissue samples.
Our end goal was our yield came up as well. Pretty cool. Then, related to yield, I think we ended up on a bell curve. It was three and a half to four bushels of corn with no additional nutrients added. That is promising.
This short video, in a nutshell, explains why it makes sense for Mosaic to be in bioscience. Over the next 20 minutes between me and Floris, we will be talking about bioscience. We will be covering why this is the market attractive to Mosaic, why Mosaic, what we have been doing over the last two years, and what we are focusing on now, what are the brands in the market, what are the new products in the pipeline. We will conclude a long-term vision. With that, I will start from the first slide. Floris, please come on in.
The very first slide is a busy slide. I was coached to talk about on the slide. I will try to answer two questions. Number one question, why this is an attractive market? The second question is, why Mosaic? Let me try to articulate the first question. Why is it attractive? It is a fast-growing market segment. It was estimated like $10 billion in 2023. It is forecasted to grow over $25-$30 billion by the end of the decade, that including biocontrol as well. There is a significant upside to grow in this market segment. Over 80% of the farmers today, they have not used biologicals. Also, biologicals really help to address the major issues the farmers who have. You heard from Andy and I earlier talking about the need to improve yield.
In order to improve yield, crop nutrition contributes to 60% of the yield. However, a surprisingly low percentage of the nutrients applied on the plant or crop only get absorbed in the first year. Floris is going to address it later. This is a real place that biologicals can really help growers to solve the problem. Also, from Mosaic's point of view, in comparison with commodities, the margin for biological products is stable and relatively high. We're talking about 30-60% of the gross margin. It requires much lower CapEx in comparison with commodity products. Lastly, why is it attractive? Because it is a fragmented market. There's no clear market leader. Mosaic is very well positioned to take this leadership. Why do we believe we can win, we can succeed in this market?
Number one, our knowledge, our expertise in the fertilizer industry gives us a very unique opportunity to redefine crop nutrition, which is not only NPK. It is beyond fertilizers. It is adding biologicals to improve the use efficiencies so that the farmers can improve yield and their profitability can be uplifted. Why Mosaic? Also, we talked about market access. We have the market access in the major ag market. In fact, before we got into the bioscience space, we were approached by some of the companies who have good technologies, good products, that they do not have a clear path to the market. We were asked whether we want to be the marketeer for their technology. That gives us confidence as well. We do have the legacy on product innovation. We have the track record.
As I mentioned earlier, we have the single biggest brand in the crop nutrition industry for value-adding products, Microessentials. Lastly, I want to say Mosaic has, we do have waste streams from our production in phosphate. The waste streams include wastewater, include gypsum, include some of the low-quality rock. Biologicals give us a huge opportunity to tap into this waste stream to turn the waste to potentially monetary value-adding products. With that, I'm going to hand this over to Floris.
Thank you, Jenny. Good morning. Thank you for giving me the opportunity to talk about bioscience. Absolutely my favorite topic. Jenny talked about what and why. I'm going to talk a little about the how, how we're doing it. The last two years, we've been quietly working on building the foundation for the future growth of our platform. We were already active in North America.
We have launched in Brazil, in India, and China. We have added resources on the sales side, on R&D, on product registration. Equally important, we have harnessed the benefit of the teams that we already have on the ground on the fertilizer side. Let me give you an example. In Brazil, we have over 200 people in the field, sales managers, agronomists that know the customer, that are trusted by the customer. We have done extensive training. Now these 200 people are employed as well, deployed as well in bringing our biosciences product to market. If you look at some of the numbers, we reached in 2024, 9 million acres on a global basis. We expect to very significantly grow that number this year. To put it in perspective, I think one of the speakers said it before, Microessentials alone were covering 75 million acres globally.
That is exactly the kind of customer base that will also buy these biological products, advanced customer base that will try new technologies because they know it is the future. We put a lot of emphasis on research and development. Bioscience needs new products, new technologies. We are doing this both internally. We have a strong team with greenhouses, with labs, particularly in the U.S. We are also having cooperation with external research companies to come up with new products. We have also focused on the customer experience platform that we set up. I would like to give you three examples of this. First of all is Frontier Fields. If there is one thing we have learned, if you want to explain to farmers why your product is so good, there is no better way than to have a farmer explain it. You saw the short video at the beginning.
We do this on a monthly basis. We have four farms in the Midwest that try our product. Then once a month, they make a podcast totally unscripted to share how it has worked. We have had in the first year one and a half million hits, all farmers that are interested and that are hopefully also going to try the product. We are going to expand this to more regions and overseas. The second example is True Response. One of the challenges with bioscience is that in the past, there have been products in the market that were sold with a good story, but that frankly did not work all that well. You sometimes hear farmers say, "Well, it is just snake oil." Part of our duty, our task, is to explain and educate and to make it clear that the products we have, Bruce mentioned it, very extensively tested.
We do not go to the market until we're absolutely sure that they work. We're using this True Response platform where all the trials that we make and that customers make and that they share, as all those results are online, on maps, and publicly available. If you're a farmer somewhere in Illinois, you can click on that area and you can see how the product works. We include all the good results. Once in a while, a product doesn't work on a particular type of soil. We put that in there as well. Total transparency to build trust. The final example of this customer experience platform is AgCollege Online. AgCollege Online is really an educational tool where our customers can go online, learn about the products, and learn about bioscience in general.
Now, all of these investments in resources will take a little bit of time for us to dilute them enough so that we could become profitable. We are very confident that that moment will come in Q4 of this year. The growth path, as you will see on the latest slide, is going to be very significant. When you talk about biosciences, bioscience encompasses a lot of different areas. I mean, it is almost dangerous to just use one word. If you look at it, this goes all the way from biocontrol on one end to biotech on the other end. Mosaic is very, very focused on three areas in this very wide pool, if you will. Three swim lanes: biocrop nutrition, biocrop stimulants, and bioremediation. Let me briefly touch on all of those three.
Biocrop nutrition is the biological technologies that increase the availability of nutrients for the plant. This includes things like nutrient use efficiency, phosphate and potash solubility, and nitrogen fixation. It makes sure that the plant has access to the ingredients that are in the soil but are perhaps not used yet. The second area, biocrop stimulants. These are technologies that can do two things. One, they can enhance the crop quality. For instance, they can improve the sugar content. Secondly, they can help to make the plant more resilient to stresses, to heat, to drought, to too much rain. That is the second category. The third category is a different one. The first two are really related to products that get applied by farmers in the field. Bioremediation is different.
Bioremediation is the use of biological on our fertilizer byproducts that we get from our mining industry, particularly on the phosphate side. For instance, on gypsum, for instance, on pond water. There are two angles that we come at this. One is a cost-saving issue angle. As you are aware, Mosaic has significant expenses in asset retirement obligations. One of our hopes is that longer term, as these biologicals that we have improve the quality of these byproducts, of these waste products, we can over time reduce the burden of this ARO. This is a cost saving. The second one is an even bigger, more interesting opportunity. This is basically to monetize these waste streams. We call it waste streams, which is really the wrong word because there is a lot of potential value that we have not unlocked. Let me give you an example.
We are having more than a billion tons of gypsum in North America. We are producing about 20 million tons more. We have cost of stacking it. We have cost of maintaining these gyps stacks. In Brazil, we are selling 6 million tons of gypsum per year, which is almost everything we produce. One of our thoughts was, why not try to see if we can do the same in North America? If we can further improve the quality of the gypsum, we may be able to sell it and reduce our cost and have an income stream. Other example is one of my favorites. 15% of the gypsum of that billion tons and of that 20 million tons fresh product per year is actually sulfur. We are, I think, the largest sulfur purchaser in the world.
If we can extract that sulfur from the gypsum, very significant value. We have been able, in the trials we've been doing, we've been working on this for quite some time. This is the first time we talk about it because we wanted to first make sure that we had something to show for. We're able to get 90% of the sulfur out of this gypsum. Potentially very significant money. I want to be clear, this is not ready to bring to the bank yet. We know that the technology works. We're now working on what the exact cost is, but very big potential. Let me, the next few slides are giving you an idea of the products we have, some of the products we have already in the market and some of the products in the pipeline.
This first slide shows you our two flagship products, Biopath and Powercoat. These are bacillus-based live microbials. They basically do the same thing. They make the plant more efficient using the nutrients that are in the soil. They have a slightly different route to the same goal. Biopath is a liquid, whereas Powercoat is applied as a coating on fertilizer. Powercoat is an excellent example of what Bruce mentioned, is of the synergy between our core business of fertilizer production and the biologicals that we have just started. They end up with the same customers. They get sold through the same teams. They do a better job for the same crops. These products that you see here have a long shelf life, 24 months in concentrate and 18 months once they're on a granule of fertilizer.
It's not easy to stay alive on a granule of fertilizer for 18 months. That's quite exceptional. This is one of the strengths of the product. We can apply a product like Powercoat on our MOP, our MAP, and very interesting on our Microessentials. Now you're bringing a premium product with a very strong loyal customer base to the next level. The next type of product, this is one that's in our pipeline I'd like to talk is nitrogen fixation. Most of you probably have heard about nitrogen fixation. You can, to some extent, say that nitrogen fixation has become the poster child of the opportunity that bioscience brings in agriculture. The concept is very simple. Some plants, like soybeans, are able to get much of the nitrogen they need from the air, whereas other plants, take wheat or corn, have to get it applied.
If you look at it on a global basis, give or take, farmers spend $100 billion on nitrogen products per year. There is a huge potential there if you can replace part of that, not all, but part of that with a nitrogen fixation product. As you're probably aware, we have a close cooperation with Biokonsortium, one of the leading research companies in this field of nitrogen fixation. We are at the point where we have a gene-edited product that has proven nitrogen fixation ability. It is compatible as a C treatment, which is by far the most economical and fastest route to market. It has low production cost and a long shelf life.
While I know there are others in the market that are trying to be in this field, the combination of these four attributes sets us apart, in our opinion, quite well from the rest of the pack. It is not surprising that we're working very closely with a large number of seed companies that are trying this product, that are very excited about it. Some of them are in their second year. We have started negotiations with some of them about licensing these products. This is very attractive for Mosaic. It's a good thing for the world as well, frankly, if we can make this work. Let me talk about the last technology that we have in the pipeline. This is phosphate solubility bacteria. This is yet another example of how closely related bioscience can be with our core business of phosphate and potash.
Jenny mentioned it a little bit. Of the phosphate that gets applied by a farmer, only 30% gets used in the first year. It takes, depending on the soil, of course, up to five years before most of it is used. Not very efficient. The phosphate solubility bacteria that we are working with allow the plant to use more of that phosphate earlier. The question was asked, is this going to replace phosphate use? No. Very clearly, I'll reiterate what Jenny said. The plant needs the same amount of phosphate. It is simply a much more efficient way for the plant to get to the phosphate. The idea for this is that we apply the product with our own fertilizer, sometimes on the fertilizer. We have had the first year of testing, 2% yield increase. That is just the first generation.
We're now testing the second generation. We have expectations for it to become bigger. Our launch target date is 2027, 2028. The only thing I don't like about this bioscience business, it takes time. You need to make sure that the product works. We take our time. We don't try to rush it. We have high expectations of this product. There is an interesting second leg to this technology. We have over 100 million tons of lower-grade rock in Brazil that is not economical to run through the normal process with sulfuric acid. The P2O5 is too low for that. We are testing the same technology through bio-leaching on this lower quality rock. So far, in the first trials that we have done, we get 50% of the P2O5 out in 24 hours. Very encouraging. Our goal is to get 90% out.
We're pretty confident we can do that. We still need to prove what the exact cost picture of it is. I don't want to make false promises that this will hit us tomorrow. We're very confident of all the different opportunities that are going to come from this bioscience. We have a lot of irons in the fire. Not all of them will play out, but sufficient will play out that I think this is really going to change how Mosaic is successful. Back to you.
All right. Thanks, Bruce and Joe.
Super exciting new product in the pipeline. Let me conclude this session to share with you the vision of bioscience for Mosaic. We reached 9 million acres last year, as I said earlier, after two years of product in the market.
We are going to reach 70 million cells by the end of this year. We are looking at $200 million EBITDA in 2030 with significant potential upside in the long term. We have done this before. We have done this before with the success of commercializing Microessentials. With the market access, with the brand, with the technology, we can hit another home run. With that, I am going to invite Jeff Wheeler to the stage. Jeff Wheeler is our leader for bioscience, both for commercial and production. Jeff has a long-term success career in the bioscience space. We were lucky to get him to join us. This is one of the examples of how we have the talents who are the real experts in this space.
Okay. We have about 10 minutes for this session. Same as before, please raise your hands. Mike will come to you.
Just a couple of points. If we can keep it to one question each just to give other people a chance and keep it to the topics relevant to these speakers. Thank you.
Works. Yeah. Ben Theurer from Barclays. Thank you very much for the presentation. I just wanted to go back on the market access targets and the different regions. If you could maybe help us understand a little bit what the steps are to get to the $300 million target in between the different regions from here until 2030, how should we think about the delivery here, which regions are first and what levels to expect in the coming years?
Sure. Let me quickly summarize. The $300 million EBITDA uplift is basically coming from the four regions: North America, Brazil, China, India. In different regions, the growth drivers are slightly different.
In North America, it is basically the growth of performance product. So the performance product we have today in the market, Microessentials and Aspire, and also we have a million tons of new performance product, which is most likely biologicals plus phosphate and biologicals plus potash. That was rebuilt into the North America bucket. Shift over to Brazil. Brazil is the $100 million-$150 million EBITDA uplift is coming from two areas. One is really the market share gain. That's basically we're looking at to grow market share from 16%- 24%, especially with our investment of Paramonte coming to the market. And that gives us the chance to get into the new market, new customers, and new crops. The second growth driver in Brazil, similarly to North America, that is the growth of performance product.
When I say performance product growth, both in North America and also in Brazil, that means the uplift of gross margin. Assuming in both cases, assuming P and K prices flat. Meaning there is no inclusion of price appreciation for commodities. Lastly, in China and India, that is mainly the performance product, especially biological plus product in these two markets. In China, also including potash. Thanks.
Okay. Our next question back over here.
Hi. Thank you. It is Andrew Wong from RBC Capital Markets. In Brazil, the NPK projection I think you have is up about 8 million tons by 2030. You talk about the market share gains for Verdeslantes. I think you have about 5-6 million tons growth. What is your confidence level that you have that much market share gain that you really win most of that Brazilian growth?
Maybe just talk about what competitors might be doing as well and how Mosaic's different.
Good question. The market growth itself, I guess it's probably not a question. The question is how confident we gain market share in Brazil. Let me put it this way. Last year, we actually constrained ourselves in grow market share. We could have grown bigger with our current capacity on blending facilities, with our current market access, with our current customer base. We chose not to grow that market share last year because of the credit issue. We decided not to pursue the sales in a channel which has higher credit risk. That is basically the base. Going forward, we are looking at the growth, A, like I mentioned earlier, in the northern region where we have if I think about last year, give you a reference, 16% of the market share.
In northern part of the region, our market share was 3-4%. Reason was we are not there with the Paramonte investment that we made. We will be there. Not only will we be there, our customers are going along with us. That gave us the confidence to really capture the growth in the northern part of the region, which is fastest growing. The growing is not only the acreage growth, but also the northern part of the farmers are investing in irrigation. They are growing their crops from one crop to two crops a year. That gives us the confidence also to grow in the same acre with the same customers, but double the volume. Lastly, it is really on the performance product and biologicals plus. We are very confident. We had that work. We had that success. We were constrained on supply.
Hi.
Kristen Owen from Oppenheimer. Thank you for taking the question. Sort of a follow-up to this last one and then an addition to the pipeline that you outlined. Follow-up on the last one is just how important Brazil is to your expectation of hitting profitability for the business in Q4 2025. And then how important what you just outlined in the R&D pipeline, how important these products are to achieving the $200 million EBITDA uplift.
Okay. I will take the first question. I will leave that to Floris and Jeff, Jeff on the pipeline question about science. For Brazil, I think if your question is really on 2025, it is very important for us. It is very important for us not only on the confidence whether we can deliver the growth in a new region, new crops, and new customers in the north after our Paramonte project up and running.
It is also very important to really, it's confidence. Also, it's really the proving part. I can give you an example. Paramonte currently is scheduled to inaugurate in July. We have sold the product going to be produced from that site, 60% as of last Friday. We sold 60% of the product which are going to be produced in that site. That gives you a bit of confidence as well.
In the second part of your question, in terms of the overall $200 million EBITDA by 2030, how important is the pipeline of the products in delivering that? What I'd say is it's important, but it's not the number one driver to make that happen. The reason why is we've got current products that are proven in the marketplace that we're working on expanding registrations globally in all the markets that Mosaic has a leadership position in.
That's going to provide a major uplift for us in terms of our overall platform. The reason why I say the pipeline has a little less that's important, but less is the fact that one of the products that you saw today is not even in our projections at this point in time because we're still working through that proof of concept. Another product is, but is in lower projected range until we receive regulatory approval. We really start to put those numbers more in terms of what our plan and our projections look like. We are in that process right now of achieving those regulatory approvals.
We feel pretty good about where our current plan is with our current products being a core driver of delivering those growth expectations, but really excited about some of the uplift that we have with our new pipeline of projects that we have in there and other ones that we did not even mention this morning.
Okay. Hi. Richard Trotta , Wells Fargo. Just wanted to ask in terms of to deliver these growth targets, $300 million for market access, $200 million Mosaic Biosciences, what kind of CapEx do you need to get to those levels? Also just taking a step back, the production levels that you gave for phosphate and potash to 2027, any incremental CapEx required to get to those levels?
Let me try to answer your question on the market access part of the CapEx requirement.
The market access growth, especially on the geographical growth, is really in Brazil. At this moment, after the investment in Paramonte is completed, our current capacity, we do not need new investment in the capacity in order to deliver the targeted growth in Brazil. Meaning the requirement to CapEx will be really minimal. In North America, China, India, the growth is really the product sales growth. Back to your questions earlier on phosphate and potash, the distribution of market access growth of phosphate and potash, especially in Brazil, it does not count on incremental sales from our current production base. The new sales of NPK in Brazil most likely is from third party. If we were to make a decision to say to allocate the phosphate in North America, for example, for a much higher net back, that is likely going to be the scenario to be played out.
To long story short, we do not expect major CapEx investment in order to support the growth in market access. On biosciences, as I mentioned earlier, the trick on biosciences, A, is R&D. You need to have scientifically backed product to make it work. Second part is really on sales and marketing in market and the market access. Production, CapEx requirement for production in comparison with commodities are really minimal.
Okay. With that, that's time for this Q&A session. Thanks, Jenny, Jeff, and Floris for the great session. We are now moving on to kind of our final section of the day. We are going to start that off with Luciano returning to the stage to talk about capital allocation and financial strategy.
Okay. You heard about the short-term engine of growth for Mosaic coming from the normalization of production and cost.
You heard about the long-term engine of growth for Mosaic coming from market access and biosciences. The capital reallocation program, which I will address, sits in the middle. It's an agenda that will develop over the next 12, 24, 36 months. It has a great potential to bridge the story from the short-term improvements to the long-term. I'm going to talk about the capital allocation in the broader context of the Mosaic financial strategy. I'll start by laying out this slide, which pretty much every company has a slide like this one, which outlines the philosophy and the approach towards balance sheet, capital allocation, returns to shareholders. This is Mosaic's with an assessment in the column in the middle of where we are and what we need to improve. Starting by the balance sheet, we're very happy with the investment grade rating that we have.
We do the math. We track what would be the right level of debt in order to optimize cost of capital. We pretty much are where we need to be. There should not be any expected changes in this arena. Obviously, we want to service debt at a trough of market cycles. Not only that, we expect to pay our minimum dividend. It was specifically designed to be paid in the trough of market cycles. Another feature that is maybe unique to fertilizer companies is the flexing of short-term debt on a seasonal basis, quarter to quarter. Precisely, Jenny mentioned, right? You produce product during the entire year. Therefore, you build up those inventories as you advance them. You need that working capital. We fund it through short-term debt.
Once the application season starts, the working capital comes down and the cash comes in. You will see quarter to quarter debt fluctuating. Where we're not happy is with the return on capital employed. Mosaic is trading below its book value. The market is clearly saying that, look, overall, Mosaic's not returning the cost of capital on its capital allocated. The goal is to reallocate away from low-returning assets. We're going to address that. The two other topics, CapEx, you saw that Mosaic in 2024 delivered a reduction in CapEx levels from the prior years, which we had promised. We're kind of halting that reduction for this year. We're actually investing an additional $100 million in reliability projects to ensure the 8 million tons run rate for phosphates. Over the long term, the expectation is for that to decline.
Sustaining capital is a major portion of it. We are targeting $850 million of sustaining in 2030. We would like to target a number which is lower than that, but this is the one we are more confident that we can achieve while maintaining the health of the assets. Necessarily, you pointed out a few times, we need to improve EBITDA to cash conversion. The good news is that most of what we talked about, as it is low CapEx, the cash conversion tends to increase over time just by the uplift in EBITDA. Not only that, by the reduction in capital expenditures. The philosophy of capital allocation and shareholder returns, when we have discretion, you should not expect meaningful opportunistic use of CapEx. The target is to have the high return capital-like growth between $100 million-$200 million a year.
That will depend on the pipeline of projects. Typical projects, for example, in the past that would fall in this category would be the ones we mentioned, like Esterhazy Compaction, Hydrofloat, Microessentials in Riverview, the Paramonte Blending Facility. Typically, each of these projects would be like $50 million, $60 million, $70 million, $100 million, developed over two years. You can see the picture that there is nothing, we do not aim to bring in like hundreds of millions of dollars of CapEx in specific projects. That is what we are targeting. No significant M&A in sight. I already mentioned the desire to maintain a healthy minimum through-sight dividend. That minimum dividend will evolve as the share count reduces eventually with buybacks.
If we have an EBITDA uplift and we feel more confident in our ability to pay a minimum dividend in the throughout of the cycle, the idea is also to grow that minimum dividend in proportion. The only reason why we're giving here four stars instead of five is on the shareholder return portion is because we acknowledge that in the past, we have bought back shares at the peak of the cycle. That was a learning. Going forward, we intend to be more mindful of what is the normalized level of the cycle of our share price and weigh in these factors when doing the trade-off between buybacks and special dividends going forward. Now I'm going to jump into the capital allocation part. Oh, I'm sorry. No, there's just a 30,000 ft overview on the balance sheet. This is just a few numbers for you.
The right-hand side indebtedness metrics are well comfortably within investment grade rating. I think we can check this one and move to the part of capital allocation where the interest is. That scale, a few months ago, I made a reference to that, that 55% of our capital employed generates 95% of the cash flows and of the NPV. Here we're giving a little more detail because it seems striking that the other 45% only generate 5%. There's a breakdown here. First, the part which is performing great in yellow is where we want to invest more, right? What is in that bucket, right? We have our tier one potash assets that we talked about. We have the performance products.
That means when you look at one specific facility, be it Riverview or Bartow, we actually split the capital, which is allocated in the production lines that produce, for example, Microessentials, and the capital which is allocated in the other production lines, which are produced, for example, commodity products. We are putting in here on the yellow bucket the part which is dedicated to the performance products that have a higher margin. The assets which are associated with market access and in the future, for example, the assets associated with biosciences, everything which has a healthy return above the cost of capital is on the left-hand side. On the right-hand side, on the top bucket, we have pretty much the target for our capital reallocation. It is mostly the commodity phosphate products. Mines, be it in North America or in Brazil, or specific production assets that produce commodity products.
These assets, they mostly and some non-core assets. There were some smaller non-core assets. Some of those we're going to talk about in the part of capital reallocation. On aggregate, you have about 33% of the total capital being allocated to those. It's about 11% is phosphate industrial assets in Brazil. There's another 18%, which is commodity phosphate assets in North America, and 4% of other non-core assets. They do generate returns. They have value. The 20% of the net present value of Mosaic comes from those assets. It's not commensurate with the amount of capital employed. It's not enough to justify the capital investment. Finally, you have the lower bucket, corporate and other, which has 12% of the capital employed. This is approximately $2.5 billion.
The most important part of this is the Ma'aden shares, like the $1.4 billion in shares, which are today sitting idle, not generating any returns, but likely so it's a true candidate for reallocation. We have, for example, our cash in hand, which is sitting at the bank. We have other assets, for example, land holdings, which are sitting idle. The reason why they generate minus 15% of our total NPV is that the corporate overhead is allocated here, right? Let's say the SG&A, which is not associated with the business themselves. Obviously, as for every company, we're very much leaning into also reducing that burden of that corporate SG&A. As I mentioned before, the technology piece is going to be very important on that.
On the next slide, I'm going to outline our capital reallocation program as it sits today, as we see it today. Please take this as a first draft and as an evolving one. As we dig more and look more into opportunities, you will see more of this being announced to you. We're talking about $2 billion-$3 billion of reallocation opportunities divided into three buckets. Really, the $2 billion-$3 billion, they come from the blue and the green buckets. I'm going to single out and talk a little bit about what is meant by the two last lines, the black ones, because they do not involve proceeds per se.
I'll start by addressing the transaction we've already delivered or are in the process of delivering because that program, although it's more structured right now, actually started back in 2023 with the sale of Streamsong. The Maaden shares, the transaction closed in December. We're already holders of about 3% of the capital of Maaden. We have a lockup. We cannot sell the shares in three years. There's a schedule, but there's a path towards monetization. Yes, there are some difficulties with the liquidity of the shares that will need to be addressed. There's a path towards that reallocation. Our best example, poster child, we all like that transaction, Patos de Minas, where we signed a deal. That was a mine that was idle since 2015, if I recall.
The expectation is for a closing in 2025, $125 million proceeds that will be certainly dedicated to reallocation and for the benefit of shareholders. Now, here's what we're mostly working in as we speak. Cars Bet, we've been talking about it. Good news is that we have received indications of value. We're pretty confident that we're going to have something for you in the second quarter. We're hopeful that we will have a transaction by then. Araxá and Patrocínio, let me detain a little more on these two. Patrocínio is a mine that sends ore to the process plant in Araxá, which is 70 km away. The rock gets railed over 70 km.
That is the reason why these two assets as a combination, they are not as competitive because the logistics cost of feeding the Araxá process plant with that Patrocínio ore makes it uncompetitive. This is an asset which was having negative cash flows in the past. Today, it is in positive territory. I do not know if you will recall, but Karen mentioned in her presentation that there was a review of the mine plan, a refocus on some grades. The mass recovery improved. Everything now. Still, even with positive cash flows, it is definitely not enough to recover the capital employed. The first thing that came to our mind is, okay, let us put this up for sale. Is that the case? Would anyone pay for those assets more than they are worth to us? If we were talking only about phosphates, probably no.
The interesting thing is that we started receiving unsolicited approaches because the Patrocínio mine actually is a multi-ore. It's a multi-metallic type of mine. It contains not only phosphate, but it does contain niobium, very high grade, contains titanium, contains rare earths. With all this talk about the critical mineral strategy from several governments, and in Brazil, with the success, I don't know if you know about it, that Sigma Lithium achieved, like a company that came out of nowhere and became a multi-billion at the peak of the lithium cycle, was worth like $5 billion. Today it's like $1.5-$2 billion. Like called the attention of a lot of foreign funds and investors in order to come into Brazil and to look for critical minerals. For example, there are seven graphite companies in Brazil today, junior companies traded in the Australian Stock Exchange.
There are rare earth companies that are starting production. There are financial investors coming to us and saying, "Look, you have all this niobium here." I think yesterday, the U.K. classified niobium as the most critical of all the critical minerals in the list. Would you like to do something with that asset together with us? Brazil is the largest niobium producer in the world. The niobium companies that produce also approached us. We actually decided to launch a process in two dimensions. The first one is, yes, the assets are for sale. If you want to make a bid, if you want to develop the niobium here, please put an offer on the table. Interestingly, you do not need to build everything from scratch. In order to extract the niobium, after you extract the phosphates, you do some adaptations on the second line.
You take out the niobium. If you want, you take the niobium concentrate, you can do the downstream in order to get to the final niobium product. You actually are going to use the existing assets. We started that process for an outright sale. We also started another parallel process to ask for intentions. Do you want to invest the capital which is required by diluting Mosaic? We're not going to put the capital to take the niobium and to create that JV and that other junior company to produce the niobium. This is very exciting. This is coming. The process will be launched next week. We're very excited. The talks have started way before. Taquari is our small potash mine in Brazil. It's the only mine that produces potash in Brazil. It is a high-cost mine.
It does not have adequate cash flows for the capital invested. It does not have the same scale of our other potash mines. It does not have a strategic importance by its location to actually feed our market distribution platform in Brazil. Interestingly, because Brazilians were so scared about the potential lack of fertilizer following the onset of the Russia and Ukraine war, there are a few, I would say, groups associated with the agribusiness in Brazil that, again, on an unsolicited basis, came to us starting to talk about doing something with that mine. That dialogue is ongoing as well. The excess land holdings, this is actually a large one because we have a lot of land in Florida, 350,000 acres. Not all of it is actually necessary for us to develop our business in the foreseeable future.
We're in the process of finalizing a diagnostic and see what we can come up with the market for sale and for reallocation. In all of that, we expect that's $2 billion-$3 billion of reallocation opportunities. Now I go into the black portion, which is a little different. It's about repurposing instead of selling an asset. It's about repurposing capital, which is already employed towards a different use. The first one, which is obvious, is an upgrade on the product mix. We do have a pipeline of potential projects to do with those commodity products. You can read this. For example, one example is MicroEssentials in Uberaba. If eventually the Brazilian market takes on more acceleratedly, more MicroEssentials than what we're seeing there, perhaps there is an opportunity to add local MicroEssentials production, add a marginal type of opportunity capital that I mentioned.
We will be looking into all of this with all of the facilities that today produce commodity products. Have no doubt about it. If you look 10, 15 years into the future, we'll see Mosaic more as a specialty performance products producer on the production side than as a producer of more low-end commodity products. Finally, what do we mean by value over volume? If we come to the conclusion that the assets cannot be repurposed, the commodity, if maybe the stripping margins, the great backdrop that we see coming does not materialize, if we're not able to extract the cost that we expect to extract, our toolkit will have all the tools to deal with the capital. That may eventually lead to, for example, we deciding that a specific production line or specific train should not be continuing anymore.
That is also in our toolkit in order to assess the situation. Something to expect more if it is the case more down the road, maybe within two years, for example. Wanting you to be aware that we are looking with all the tools available for what is going on with the capital employed at Mosaic. Finally, I am going to wrap up and just look at the financials that we talked about. Lots of opportunities that we double lift here, we double lift there. How do they add together? That slide shows you the aggregate combination of all that you have seen through all the presentation in each of the sessions. Our observations here are that naturally, the first bucket is the biggest just because that is the one we are more familiar with. The leverage market acts and redefined growth. These are the opportunities already identified.
Because Mosaic is pivoting in that direction, I have the confidence that we have the confidence that we will develop more and more opportunities in these two buckets going forward. That is what we see today. We have already talked that no major investments are required to achieve these. Finally, these improvements are largely independent of fertilizer prices because market access is about buying and selling, so it is agnostic on prices. Biologicals, agnostic on prices. Finally, the normalization of production and costs. Yes, there is a component of prices on the production increase, but there is also a big component on the cost reductions that is independent of prices. That picture assumed flat 2024 prices. If you may want to be sensitive to different prices for MOP or for stripping margins, we give you here some guidance of how we are seeing the five-year EBITDA for different combinations.
Let's focus on the shaded diagonal here of what we call the low, medium, and high-end scenarios. Finally, see how that translates into available cash flow to shareholders on the next slide. Here we are. On the left-hand side, we're taking the same EBITDA scenarios. Now we're translating it into free cash flow according to our expectations about how cash flow conversion will evolve, how CapEx will decline, and how things will behave over time for that period of five years. If you add the capital reallocation potential proceeds that we mentioned before, you get to the numbers on the right-hand column, which are, I would say, pretty sizable compared to Mosaic's current market cap. That is what basically leads us to the conviction that there's a very compelling investment case for our shares at the current valuation. With that, final remarks.
Thanks, Luciano. I really just want to say thanks to all my leadership team for sharing the insights today. Investors, those in the room and those online, thank you for the great—those in the room, thank you for the great questions and participation throughout today's session. It's really been valuable for us to spend time with each and every one of you today. We'd like to reduce the time, as we kind of talked about in the opening, between these analyst days going forward. I don't think it'll be every year, it may depend on what's going on in some of our growth strategies. I would expect probably more in a two-year cycle. In many ways, the Mosaic story is unique.
Having this dedicated time with each of you to kind of be a sounding board, get your feedback, and interact with you to ensure that, A, you understand, but B, that we get that feedback as well and know where you may have concerns or additional guidance for us to clarify. Now we have given you a lot of context throughout the day and to our path forward. While there are definitely macro trends, as we have talked about, working in our favor, we will continue to be met as always for those who have been long in this business, for me over 30 years. We will see obstacles that come up that pose some type of risk to our business.
The meaningful actions that we're taking within our commodity production business are enabling the capital reallocation that you just heard Luciano talk about, which in turn is fueling our ability to leverage our premium earned market access to redefine growth. That was kind of the major stories that you heard from Jenny, Floris, and Jeff. These moves make possible that financial strategy that Luciano just overviewed at the highest level, which ensures that regardless of what happens, we're elevating in the lows of the cycle and remain resilient and generating good shareholder returns. Helping the world grow the food it needs is something that is important to us. We are working hard to ensure that our business is thriving for the next 20 years, next 100 years. These moves will serve as a means to make that happen.
We are both challenged and inspired by the journey that is ahead of us. While in any session like this, there was not time to get into the details of each and every one of all our internally focused initiatives today, I can assure you that we will continue to be committed to sending our people home safely each and every day, being good stewards of the natural resources that we are blessed with, and progressing our digital transformation journey to achieve even more efficiencies across every aspect of our business. While Luciano talked about, and I think many of you appreciate, we do have a strict set of financial criteria that any emerging initiative must set and meet. We are closely watching value creators that serve to eliminate risk or further grow our competitive advantages.
As you can tell, hopefully from the team, we are motivated and optimistic about growing our business the right way. At the end of this all, I just want to thank you again for your participation and participation during this two-and-a-half-hour session. With that, I think I am going to invite the entire leadership team up to the stage. We will close with a—what do we have here? 25-minute question and answer, Q&A? Thank you.
We are going to follow the same format that we have been following for the previous ones. Again, for this session, it is open to all topics. Whatever topics we have covered or whatever is on your mind is open game. Please limit your questions to one at a time so that we can get to all the questions. Thank you.
Thank you. It's Carl Chen with Point72 Asset Management. Can you please talk a little bit about your kind of thinking and calculus behind Fostina? Obviously, the nitrogen assets seem to be valued pretty highly in the market these days. Do you see more value being unlocked through an asset sale or a partial ownership sale down? Or do you see it having more value through retaining the portfolio? Thank you.
Yeah, let me start. Maybe Luciano, and if Karen, you've got something to add, please do. Luciano laid out a roadmap of the things that are kind of active in what we're doing right now. We are considering all assets. The Louisiana facility, particularly the mona plant, is something that we are discussing. I can tell you that it provides significant EBITDA uplift, being an integrated part of our ammonia supply at that facility. It provides actually Louisiana, interestingly enough, as we've gone through kind of our diagnostics of each of our assets and looking at this reallocation strategy, as one of our better North American return on capital employed facilities, largely because of the integrated ammonia that's there. Whether we could achieve something above the benefit that we get, which is pretty high hurdle in itself, we're still discussing.
We just were not ready to talk about that as part of kind of some of the example poster child that we put up on what is going on in reallocation today. Luciano?
Yeah, one of the reasons why we were not ready to talk about it is because we are assessing the separation costs. Because potentially you are going to have Mosaic only part of the assets and a third party only the ammonia plant. You need first another dock or an extension of the existing docks in order to be able to accommodate ships going back and forth more than what we have today. Second, you need a new ammonia tank, actually. You need to separate the ammonia tanks for both the potential buyer and for Mosaic. We are assessing those investments before we have a clear diagnostic if we are going to proceed or not.
Next question.
Jeff Schottenstein at J.P. Morgan. Can you discuss the normal cash outlays for your asset retirement obligations? Are they in the vicinity of, I don't know, $100 million a year? When you look forward over the next two or three years, do you expect them to rise or decline or stay the same? I know that you want to deep inject some of your water in Florida. I don't know whether that's key in trying to determine whether the cash outlays will become bigger or smaller. Second, your cash from operations in 2024 was about $1.3 billion. Your EBITDA was about $2.3 billion. For whatever reasons, there was a significant dislocation downward in cash flow. Do we make that up in 2025? That is, is 2025 an unusually good cash flow year?
Or we've just lost a little bit of ground in 2024 and we go back to normal going forward?
Yeah, Jeff, and I think Luciano can answer most of these. On the ARO question first, it is definitely more than $100 million. When you aggregate everything we have in Brazil, in potash, and then phosphates. Phosphates in North America is by far the biggest number. You can talk about how that looks in the medium term anyways. What drives those costs is one is our reclamation responsibility on the large amount of surface areas that we reclaim on any given basis. That is kind of at a steady state as long as we are producing, we are reclaiming, and there are rules around that with the state of Florida. As we have some of our closed facilities and idle facilities, they go through phases where cost curves on that closure depend on what activities we are doing.
Ultimately, they get to a fully closed site that the maintenance ARO on those are actually quite low in the single-digit million dollars a year. In order to line a stack, cover the stack with proper dirt and engineered design, and then treat the water that actually is squeezed out of the stack, those costs can look very differently. It is just the number that you have to do. There is a number of front-end loaded ARO that we have got Plant City that is under closure right now, Mulberry facility. We are now working on a model that we are kind of doing closure activities rather than waiting to the end of its life because we have to manage the water in the watershed.
We're looking at doing partial closures of some of our stacks by lining and then being able to release that water without some of the treatment costs that you're talking about. On an average basis, our ARO is what, Luciano?
Yeah, this year is going to run around $300 million.
In cash?
$300 million cash. Yeah, $300 million. The prospect is for a reduction first on the because part of it has been front-loaded. Second, maybe Karen, you want to talk about the UICs, which is if we have the authorization to do, that will be a game changer perhaps for reduction of AROs over the long term.
Yes, we are working through the permitting process specifically at our Plant City site, which is in closure, to drill an underground injection control well in which we can do a smaller amount of treatment and inject that water underground, which should help us get that site to closure. Keeping in mind that, for example, Hurricane Milton added 1 billion gallons to our water balance. If that water falls on Plant City, it's more water that we have to treat. Underground injection helps us get through this process faster and should over time reduce our costs.
Yeah. Maybe over the long term, if we could target an ARO cash-wise between $150 million and $200 million, I would say we would be happy with that. That is what we are working towards. On the cash flows, 2025—2024, sorry, had some difficulties. One, for example, we spent around $40 million extra just because of the hurricanes, just on AROs as well, because of the additional water that had to be removed. That was one. We had frustration of revenue in Brazil, for example, because of credit issues, like $30 million that we had provisioned that money never came in. It was a bad year for cash flows. 2025 is going to be much better with a small caveat, which is there will be some investment in working capital because of all the growth that you have seen on the previous slides.
Next question.
Thank you. Vincent Andrews from Morgan Stanley. Getting back to slide 54, which is your weighing machine here. Can you talk about where Fertilizantes fits within that? I am just thinking about where you are going to be able to get returns on capital employed to go to. There are two areas I am thinking about. One is working capital. Then, just when I look at Fertilizantes from the outside, I see very high sales as a function of the resale business. I see about 10% EBITDA margins. I assume there is a lot of capital that is employed to generate that. I am wondering what types of optimization there is in working capital in general available to the company.
As well, where Fertilizantes fits within here and what you might be able to do on a go-forward basis to either improve the margins or the cash generation there.
Let me start, Vince. I think definitely get your question. Fertilizantes is maybe a little more complicated and needs a little more explanation because it is really it could be more than just two different buckets of kind of where our return on capital employed sits. The distribution side with the $30-$40 margins on distribution solidly sits in the kind of yellow part of the scale. That is not all of what we have in the Fertilizantes segment. There is some pure plate commodity production at mines that could be and facilities that could be a little bit disadvantaged. Luciano talked about the Patrocinio Aerosol Complex. Unfortunately, it makes a product SSP that is kind of the lowest analysis product and probably has some of the lowest return profiles of anything.
You look at our Uberaba facility fed by our Tapira kind of world-class mine pipeline rock there. It makes high analysis products, which have better margin returns. We kind of got to look at almost what Luciano was talking about and some of that grayed out black capital reallocation is parsing almost by production line and assets to get down to where is the ROCE opportunities for uplift. They may be very different strategies depending on what that looks like within that more macro region, if that makes sense. We are looking at that in a very methodical and precise way to realize where opportunities present themselves. The strategies may be very different depending on in distribution, as Jenny talked about, pretty guaranteed margins. It is buy and sell.
That's a place where we see investment opportunity to kind of push down on that side of the scale, low CapEx investment, low CapEx to maintain. Then looking at some of these other facilities where the EBITDA to cash conversion because of CapEx load or because it is a lower analysis commodity product may be weighing down on that free cash flow earned.
Yeah, so Mosaic Fertilizantes has about 11%, not Fertilizantes, but the production assets, about 11% of the total capital of Mosaic is in there. It generates about 11% of the net present value. It has on average the same profile as Mosaic as a whole. As Bruce pointed out, there are several big differences amongst them. When you look at distribution, for example, the average working capital for Mosaic across the year is around $2.5 billion. You may have anywhere between $1 billion-$1.5 billion allocated to Mosaic Fertilizantes to distribution in Brazil, plus the capital allocated to the blending facilities. You get to, let's say, ballpark $1.5 billion of capital allocated. Let's say $300 million of EBITDA, just to pick a number, you can see that return on capital is around 20%. It sits very comfortably.
Having said that, yes, we would like to reduce working capital there. I can't say with just four months within the company. I do not yet have all the grasp on where the opportunities are to reduce working capital. Certainly, I'm looking forward to alternatives to manage that and to reduce it further.
Edlin?
I mean, Bruce, I know you probably try to be balanced in your outlook, in your view. You still presented like a very rosy outlook, rosy picture going forward. When you look forward, what do you see risk, like potential risk that could derail your plans? Also for Luciano, as you look into capital deployment priorities, where does share with purchase fit in there given the current share price level?
Yeah, and Edlin, thanks for the question. You and I talked in the break a little bit about this as well. I think risk can be looked at in very different segments of categories. One is on our short-term kind of EBITDA uplift, which was at $600-$650 on kind of normalized production and cost. I do not see a lot of risks to upset that. It is really largely within our control. Again, it is just returning. I know the frustration of how long it has taken to return. We have that same frustration. It has been proven and demonstrated. There is nothing holding us back except ourselves getting there. That risk to me is not high and not something that I lose sleep about. On the market uplift, we are not counting on a lot of P and K growth uplift for that commodity production business.
We are looking at some growth in Brazil on distribution for owning the share of the customer demand. How we source that, as Jenny talked about earlier, could be opportunities for us to look at different partnerships, different sourcing options. Do we reallocate from North America to South America depending on net max? That is simply an optimization model. Getting that distribution margin on how we just source product may be a little different than what we have done traditionally. The biggest risks are maybe on the future longer-term growth. Although we have great products, great proven products, registration is something, and you heard Jeff talk about it, is something that is, I am not going to say it is a total wild west, but it is inconsistent. There is less clarity on pathways to get there. To me, it is not a when equation or an if.
It's a matter of when. We have tried to be, and you've heard Jeff talk about that, cautious about some of the projections that we put out there and not be overly optimistic with the $200 million coming by 2030 on the biosciences growth. That could be a place. Other risks that are really outside of our control could happen. I mean, does climate change really change something significantly? The pattern that we saw on weather in Florida where Karen talked about three hurricanes in Florida and one in Louisiana, does that become the normal? That's not baked into our range. That would be above and beyond. Other ones are some extraordinary geopolitical event. I know the atmosphere and the economy today of what's going on, particularly in the United States, may worry some folks.
I think in the long term, that works itself out. Wow, if something really went off the rails there, I mean, that could be a risk in ways that we do not anticipate. Listen, I welcome maybe Luciano, I will turn it over to you. How do you think about risks and how we talked about our EBITDA projections going forward?
It just comes to mind one example of what you just mentioned on the geopolitical side. Like sulfur prices are going through the roof recently, right? It looks like a panic buying. It started with last turnarounds and some issues on the refineries that produce sulfur. It escalated very quickly, right, with a lot of concerns that Chinese buyers coming from the new year. They realized inventories were low. They started buying. Some trading companies are taking advantage to push prices up. These types of things can happen in a world that is uncertain. The other thing is if tariffs really represent a shock to the overall economy, an inflationary shock as COVID and the stimulus was, for example, I do not know what is going to happen with the CapEx levels, right?
If tomorrow all these increasing prices of steel, they go over to machinery, to services, and there's lack of workforce because of clampdown on immigration, those things could really have a shock upwards and reduce our ability to do the same amount of work with the same money. Just so you know, for example, prices today of hot rolled coils and steel in the U.S. are $950, whereas Chinese product is being offered in Brazil by $500. It is almost twice the price that people are paying outside. That, I would say, is another risk, for example. As for questions on buybacks, we believe that the best time to resume the repurchase program is at the second half when presumably we are going to see all this production uplift. Seasonally, it is when the cash flows are stronger.
Last year, we bought back shares at an average price of $29. The fundamentals that we see today with that review of the strategy and everything are even better. I would say if the decision were to be made today, the trade-off between buybacks and dividends would be tilted strongly towards buybacks to do with the extra cash. The trade-off between buybacks and special dividends, not the minimum dividend.
Hi, it's Andrew Wong again from RBC. Maybe just Luciano, going back to the comment on optimization and value over volume, which maybe also kind of ties into the commodity phosphates business being put in that reallocation capital bucket. Can you just kind of comment on what you mean by that, what your view is on the future of that commodities phosphate business, and what price or stripping margin would you consider optimization? Then just another phosphate question for Karen, actually. Can you just talk about some of the phosphate rock challenges that we've seen in the past few years? It's been mentioned a few times today, some of the impurities. I think phosphate rock production is down quite a lot in the past couple of years. Is that supposed to come back up? Is that getting better? How has that impacted operations?
How is that going to impact some of the optimization and the cost savings that are coming up? Thank you.
Yeah, Luciano, I'll just turn straight over to you for the first part.
You know.
We hired a consulting company about four or five months ago and did our first assessment of the capital returns on each and every one of our production facilities, each and every line. That was a monstrous spreadsheet type of exercise. The reality is that only now with that new version of SAP S/4HANA that I mentioned that we will have on a monthly basis the very detailed profitability per site and per product. We were kind of flying blind in the recent past. We have an instinct of what the direction should be. We really need to see what the real numbers are on a month-by-month basis to really have a definitive assessment of each of the assets. That is one thing. The second thing is the outlook, the market backdrop.
If stripping margins stay where they are, maybe some of that distribution of those buckets on the scale will change a little bit. Because in order to do that, we assume sort of normalized through cycle prices, right? If stripping margins are going to stay stronger for longer, and this is a recent trend, we're believers on that. We want to observe what the real behavior of the market is over the next one, two years. Ideally, and every mining company would love to do that, is for you to have swing production. If you could turn on and off like we do with Colonsay, depending on market conditions, that would be the ideal world. There is a lot of work to do, prep work to do before we make specific decisions on specific lines of business.
May I address the rock?
Yeah.
Yeah, on the rock side, there are two different buckets there. There is the volume bucket, obviously, how many tons are we producing, and then there is the impurity piece of that. I'll address both of them. Currently, as we speak, we're relocating another dragline into our own tract. As the concentrate plants ramp back up and we get the volume back up with that production, we will have the ability to push the accelerator and match it on the mining side. I'm confident that we'll be able to do that. On the impurities piece of it, there are two different things there, two different levers we're pulling. One is that we've actually developed the ability in our plants to process higher impurity rock. That's been very successful.
We've mastered a plan to blend that rock off so that we make sure that we're putting a steady target of impurities and BPL into our plants. The next thing I would say is in 2026, we will actually dig in officially into our South Fork Mead Eastern extension. And that ore body, it has considerable improvement in the impurity levels, which will even give us an enhanced ability to blend down impurities in that rock and allow us to continue to drive the production.
Yeah, so Andrew, just on top of what Karen said, some of that volume impact a couple of years ago was due to moving into new areas, right, and getting established. What's happened over the last couple of years is just the demand because of our concentrate production is not pulling as much through, has reduced kind of some of the production need. We are going to save it and leave it in the ground and carry the right amount of blending inventory that Karen talked about to manage our business. That does have some consequence. There is a carry-on effect there. The other one is we do not talk about it much, but our Peruvian mine, the Miski Mayo, has increased 30% over the last three years on production volume. That mine used to be about a 3 to 3.5 million ton mine.
It now, last year, set a record at 4.8 million tons of rock production. At Minegate, that is actually in the low 40s at a cost per ton. The issue for us, as Luciano was talking about, even between Arishaw and Brazil and Patrocinio, we got to ship that from the coast of Peru to the coast of Louisiana. That cost becomes a little less competitive. It is good quality rock. It is being produced at a very low incremental addition with that increase that we have done. We have seen reaping the benefits of that on quality and volume. We even have that in the tank, so to speak, as phosphate production on the concentrate side ramps back up.
With that, we are at time. I want to thank everybody that attended for all the great questions. Thanks everybody online and in person for your attention and engagement throughout the event. Just a reminder, there are bagged lunches at the back for people to take with them. Our executive team is heading to the airport fairly quickly. They do have to get back to Tampa very, very quickly for another engagement. We would be interested in your feedback. If you have any feedback for us on how the day went or any follow-up questions, please feel free to message Joan or myself, and we'll be happy to take that. With that, thanks everybody.