The Mosaic Co. said July 31 that it would appeal a preliminary injunction entered July 30 by the U.S. District Court for the Middle District of Florida that prevents impacts to federal wetlands on the Hardee County extension of Mosaic’s South Fort Meade phosphate mine in Central Florida. The district court also remanded certain aspects of the permit back to the Army Corps of Engineers for additional information.
“We’re disappointed by the ruling and will immediately seek an expedited appeal of the matter. We do not believe the decision was supported by the overwhelming facts supporting the Army Corps’ decision to issue the South Fort Meade permit. This permit has received a higher level of scrutiny and contains more environmental protections than any prior Florida phosphate mining permit,” said Richard Mack, Mosaic executive vice president and general counsel.
The preliminary injunction resulted from litigation brought against the Corps of Engineers by environmental groups, including the Sierra Club, Manasota 88, and People for Protecting Peace River. The district court’s ruling followed a July 22, 2010, hearing on the matter in Jacksonville.
Mosaic told analysts Aug. 2 that, absent relief from the preliminary injunction, it will have no reasonable alternative than to shut down the South Fort Meade mine as early as Sept. 12, when the 60-day warn notice issued July 12 expires. This notice will lead to the layoff of 221 workers and the indefinite closing of the mine.
The company said it is not a matter of if the permit will eventually be issued, but when. However, it noted that the appeals process could take a year. Mosaic is asking the district court to stay the preliminary injunction, and it is appealing the case to the U.S. Court of Appeals for the Eleventh Circuit in Atlanta. It will ask that court to expedite the appeal and to stay the injunction.
Mosaic said the district court found that the plaintiffs met their burden of demonstrating that Mosaic did not clearly show less damaging alternatives were impracticable, and that even if it did, the Corps failed to independently verify Mosaic’s findings. Mosaic said that under the court’s decision it could proceed at South Fort Meade as long as it did not disturb wetlands. Mosaic said this is not practical.
Mosaic spokesman Russell Schweiss said the remaining rock at the mine was low quality, but mining could continue there until December. The permit was for an extension of more than 10,000 acres, mostly in Hardee County, south of Polk County. Schweiss said it was not financially feasible to pass over the disputed wetlands areas and return to mining them at a later date. He also pointed out that moving the four, seven-million-pound draglines through an obstacle course of the excluded areas is not feasible. Currently, only one of the four draglines is in operation at South Fort Meade.
Mosaic expects that it can proceed with finished phosphate production at near-capacity levels through its fiscal first half. It said that in the second half, however, finished product production and sales would decline by 1 million tons, and operating earning could decline by $250-$300 million. Mosaic’s fiscal year began June 1.
Mosaic said it would meet commitments that it has to all customers who are on the books. It does not anticipate having to file force majeure.
Mosaic expects to be sourcing some 500,000 mt of phosphate rock from the Bayovar project in Peru during the current fiscal year, with most of that product going to its plant in Faustina, La., and to its SSP plants in South America. The company said its Florida plants are geared for Florida rock, and that it does not have the unloading capabilities to take significant quantities of imported rock from other sources.