(Adds BHP comment, updates share activity)
By Rod Nickel and Ahmed Farhatha
Aug 1 (Reuters) - U.S. fertilizer producer Mosaic Co on Tuesday forecast slower phosphate sales and weaker prices for the current quarter, causing shares to plunge as much as 9 percent.
The Minnesota-based company predicted third-quarter phosphate sales of 2.2 million to 2.5 million tonnes, down from 2.6 million in the second quarter.
Mosaic forecast third-quarter diammonium phosphate prices lower than in the second quarter, but investors may be missing that raw material prices are also declining, preserving margins, Mosaic Chief Executive Joc O'Rourke said in an interview.
"Somebody's obviously selling on the future," he said.
Bernstein analyst Jonas Oxgaard said the selloff seemed like an overreaction.
Mosaic shares pared the session's losses to close 5.2 percent lower at $22.89 in New York.
Fertilizer prices remain low amid pressure from bloated global capacity and soft crop prices, but O'Rourke said both phosphate and potash prices have stabilized since last year.
Asked if he would consider selling the potash business, O'Rourke said Mosaic's stock price does not reflect that business's value, especially compared to BHP Billiton PLC's planned potash mine in Jansen, Saskatchewan.
"If you consider BHP is talking about $16 billion to build an eight million tonne per annum (mine), we have a 10-12 million tonne potash business. That would value our potash business at least in that $16 to $20 billion range. We're not in a position to want to sell for what amounts to lower than book or replacement cost," he said.
"If someone wanted to offer us the right price, of course," O'Rourke said, adding that potash remains a core business to Mosaic and he is not saying it is for sale.
He declined to comment on whether BHP had shown interest in buying Mosaic, but said it makes more sense to buy existing potash capacity than to build new capacity.
"Like we do for all our commodities, we monitor the market for potential potash acquisitions and we have seen nothing today that we think competes with Jansen," said BHP spokeswoman Bronwyn Wilkinson.
The potash industry is under pressure as price weakness is compounded by new mines coming online by miners including K+S AG and EuroChem. Beyond that, there is no need for additional mines in the next five to 10 years, O'Rourke said.
Mosaic, the world's largest producer of finished phosphate products, reported second-quarter profit that topped analysts' expectations.
Excluding one-time items, Mosaic earned 29 cents per share, beating analysts' average expectation of 23 cents, according to Thomson Reuters I/B/E/S. (Reporting by Ahmed Farhatha in Bengaluru and Rod Nickel in Winnipeg, Manitoba; editing by G Crosse)