Mosaic-owned mine produces ingredient for fertilizer

By MATEUSZ PERKOWSKI

Capital Press

The Mosaic fertilizer company plans to appeal a federal judge's order that effectively blocks further extraction of phosphate rock from one of the company's mines in Florida.

The company warns that the preliminary injunction could have a far-reaching impact on agriculture, since the mine contributes roughly one-fifth of total U.S. phosphate production.

"If Mosaic is enjoined from mining these reserves it could result in product shortages and price increases that would damage farmers and consumers and ultimately impact world food prices," the firm said in court documents.

U.S. District Judge Henry Lee Adams issued the injunction on July 30 and Mosaic filed an appeal to the 11th U.S. Circuit Court of Appeals on Aug. 2.

Phosphate rock has been extracted from the South Fort Meade mine in Hardee County, Fla., since the mid-1990s, but the remaining supply is now nearly depleted.

In 2003, Mosaic petitioned the U.S. Army Corps of Engineers for permission to open a 10,800-acre extension to the mine, increasing its total footprint by about 60 percent and potentially affecting wetlands and streams in the area.

After years of study, the agency agreed to issue a Clean Water Act permit to the company in June, finding that the extension would have no significant environmental impact.

Sierra Club and other environment groups soon challenged the decision in court, claiming the agency violated federal law by clearing the expansion without a comprehensive environmental review.

At this stage in the litigation, Adams found that the environmental groups have not proven the agency unlawfully refused to conduct such a review, known as an environmental impact statement.

However, the judge ruled that Mosaic did not sufficiently explore alternatives to its mine expansion plan and that the Army Corps accepted the company's findings without independent verification.

Until the agency performs an adequate "alternatives analysis," Mosaic cannot rely on the Clean Water Act permit for mine expansion activities, the judge said.

If the company's appeal is unsuccessful, operations at the mine will cease next month, said CEO Jim Prokopanko during a conference call with analysts.

Mosaic will examine contingency plans, such as buying phosphate rock from another company, but economic and logistical considerations may preclude those options, he said.

"We won't make sales at absolutely any cost to the business," he said.

In the worst-case scenario, the closure may reduce Mosaic's annual operating earnings by $250 million to $300 million, said Larry Stranghoener, the firm's chief financial officer.

To put that in perspective, Mosaic reported $1.27 billion in operating earnings in its most recent fiscal year.