The Mosaic Co. on July 12 issued a conditional warn notice to 221 mine employees advising them that in 60 days the company’s South Fort Meade, Fla., phosphate rock mine may close indefinitely. The company issued the notice because of a lawsuit filed in the United States District Court for the Middle District of Florida, Jacksonville Division (GM July 12, p. 11) on June 30, 2010, by Sierra Club Inc., Manasota-88 Inc., and People for Protecting Peace River Inc.
The lawsuit, reported in Green Markets last week, contests the issuance by the U.S. Army Corps of Engineers of a federal wetlands permit for the extension of the company’s South Fort Meade, Fla., phosphate rock mine into Hardee County. The suit alleges that the issuance of the permit by the Corps violates several federal laws relating to the protection of the environment, and was arbitrary, capricious, an abuse of discretion, and otherwise not in accordance with law.
On July 1, 2010, the court issued a temporary restraining order (TRO) prohibiting the Corps and Mosaic from conducting activities in the waters of the United States in reliance on the federal wetlands permit. The TRO remains in effect through July 28, 2010, unless modified or extended by the court. The court also set a hearing on the plaintiffs’ motion for a preliminary injunction for July 22, 2010. Mosaic anticipates receiving a ruling from the court on the motion for preliminary injunction prior to the expiration of the TRO.
Mosaic said that without the federal wetlands permit for the Hardee County Extension, mining at the South Fort Meade mine cannot continue without adverse consequences. It said three of the mine’s four draglines have been idled awaiting access to the new reserves in Hardee County, and output from the single remaining dragline cannot economically support the operating costs of the mine.
Mosaic said the warn notices were necessary at the present time because of the 60-day notice period required by law prior to layoffs of affected employees, in case the court grants a preliminary injunction halting mining until a trial is held to decide the merits of the lawsuit. Should a preliminary injunction not be entered by the court, work will continue on the Hardee County Extension and the warn notices will be allowed to expire without any layoffs occurring.
Mosaic believes that the plaintiffs’ claims are without merit and intends to vigorously defend the Corps’ issuance of the federal wetlands permit for the Hardee County Extension.
Mosaic shares went down 8 percent after the Monday, July 12 announcement, closing that day at $42.48. The preceding Friday, July 9 close was $46.13. However, by the end of the week most fertilizer stocks, including Mosaic, began to rally, aided by higher crop prices.
Fresh from a new joint venture contract (GM July 12, p. 8) that allows it to access phosphate rock from the new Bayóvar project in Peru, Mosaic is better positioned to source phos rock should the Hardee Extension not proceed as planned.
After years spent in the phosphate mine permitting process, Mosaic has sternly responded to opposition in recent years. Faced with a potential multi-million dollar lawsuit from Mosaic, the Manatee County, Fla., County Commission in 2009 voted 5-2 (GM Jan. 26, 2009) to reverse an earlier decision (GM Sept. 22, 2008) and approved Mosaic’s permit to mine the 2,000-plus acre Altman Tract.