Mosaic to end N.M. MOP production
On July 21, 2014, The Mosaic Co. and Mosaic and its subsidiaries, decided to permanently discontinue production of muriate of potash (MOP) at its Carlsbad, N.M. facility. The final date for production is expected to be Dec. 31, 2014.
The decision is based on the quality of the ore in the Carlsbad basin and the age of the facility’s infrastructure. Mosaic said these combined factors make it difficult for the operations to remain competitive in an already challenging global market. Mosaic said the discontinuation of this product at Carlsbad is a further step in the company’s previously announced ongoing asset optimization initiatives. The larger potash production facilities at Esterhazy, Belle Plaine and Colonsay in Saskatchewan, Canada will continue to produce MOP.
Mosaic’s plan for the immediate future is to transition the Carlsbad facility to the exclusive production of our highly valued K-Mag® product line. K-Mag is a premium potash product that currently represents approximately 70 percent of production at the Carlsbad facility and is a long-term strategic asset for the company.
Mosaic estimates that the discontinued production will result in total pre-tax charges in the range of $135 million to $160 million (primarily in the form of non-cash accelerated depreciation and depletion charges of approximately $105 million to $130 million and cash severance charges of $10 million to $20 million). The third quarter pre-tax charges are estimated to be in the range of $55 million to $75 million with the majority of the remainder expected to be recorded in the fourth quarter.