This year The Mosaic Co. has doubled – almost tripled – its potash reserves at Carlsbad, N.M., from 111 million tons of mineable reserves to 294 million tons. The company also referenced a Carlsbad reserve increase back in May (GM, May 24, p. 10); however, it is yet to quantify exactly how it came about or how much it paid for these reserves.
Mosaic President and CEO James Prokopanko took a swipe at its Carlsbad competitor – Intrepid Potash Inc. – in a recent call with analysts, saying “there’s some people that are converting their mines to solution mines. There’s no need to do that. That is not the first place you want to mine this product is via solution mining.” Intrepid is currently going through the regulatory hurdles to do solution mining in Carlsbad.
As for the current potash market, Mosaic said it reduced its price by $30 July 5, and since then product has begun to move. Prokopanko said that some time during the company’s first half, which began in June, potash will move and strengthen – he believes in August or September. “On potash, we are moving product into warehouses,” said Richard McLellan, Mosaic senior vice president, commercial. He said buyers are covered 30 percent on what they require for fall.
As for China, Prokopanko said that their own potash production numbers are not going up, and that their consumption is going to have to go up. He said estimates of 5 million mt being produced in China were more likely 3 million mt.
On phosphates, McLellan said North American buyers are buying, not just moving to warehouses under warehouse agreements. “Right now, we believe North American distributors have placed somewhere around 60 percent of what they need for fall, and that’s 60 percent placed and priced.”
“[T]he North American production over the next 12 months is not increasing in phosphate production, and that’s a point that’s missed by many in the industry,” added Prokopanko, who noted that Agrifos will be taking down about 500,000 st of production in early 2011 (GM, July 26, p. 14).