NEW YORK, May 18 (Reuters) – Fertilizer producer CF Industries Holdings Inc (CF.N) has benefited from rival Mosaic’s (MOS.N) legal troubles at a Florida phosphate mine expansion, CF’s CEO said on Tuesday.
Last summer, the Sierra Club environmental group sued to stop Mosaic from expanding phosphate rock production at its mine in South Fort Meade, Florida. The group claims the surface mining process damages the Florida watershed. CF, which operates a nearby mine, has so far been spared the legal scrutiny mostly because it has not yet aggressively pursued permits to expand production. “The biggest advantage that we have is that Mosaic went first,” CF CEO Steve Wilson said at the BMO Capital Markets Farm to Market Conference in New York. “We empathize with what they’re dealing with.
CF has begun the paperwork needed to expand its phosphate capacity by nine to 10 years’ worth of supply, Wilson said.He told Reuters he would talk with any interested party, including the Sierra Club. He acknowledged the mine expansion would be a “difficult task.” “We think we’re a great environmental citizen,” he said. “But this will take time.”Separately, Wilson said CF has no plans to build a nitrogen fertilizer plant in the United States due to concerns over carbon legislation.
“The economics in the U.S. are very favorable, but the specter of regulation of carbon looms over us,” Wilson said. “We don’t have certainty.”The production of ammonia, a key part of the nitrogen fertilizer process, produces large amounts of carbon dioxide.
The company’s facility in Donaldsonville, Louisiana, on the Mississippi River about 64 miles west of New Orleans, is operating fine, Wilson said. That is because when the facility was being built, an engineer installed the facility’s electric supply well above a dike that holds back the river, he said. Shares of CF, which is based in a Chicago suburb, rose 4.4 percent to close Tuesday at $140.19. The stock has traded between $57.57 and $153.83 in the past 52 weeks.