Incitec Pivot may have had an informal approach to sell its fertiliser business worth up to $2 billion, the Australian Financial Review reports.
Negotiations for the business are believed to be in the early stage with talks proceeding with advisors, the newspaper reported without citing anyone.
The division, which is called Pivot Fertilisers, produces 3 million tonnes of fertilisers per year and generated almost half of the company's $3.5 billion in revenue last financial year.
The fertilising business is a low margin, high volume business in a very competitive area, with peers including Wesfarmers.
Demerging from the fertiliser business has been a discussion point for the company for a long time. Many analysts and shareholders believe that the company will unlock shareholder value by focusing solely on its explosives division as a mining services company.
The company's share price has shed 13.9% to $2.78 in the year to date.