The world's top producer of concentrated phosphate is about to become even bigger.

Mosaic Company has agreed to purchase Vale SA's fertilizer unit for about 2.5 billion dollars in cash and equity.

Part of the deal will see Mosaic acquire Vale's Kronau potash plant in Saskatchewan.

Vale is expecting to receive 1.25 billion in cash and the same amount in newly-issued Mosaic shares, which equates to roughly an 11 per cent stake in the firm.

Among Mosaic's operations is one at Colonsay.