Category: Letters and Submissions

Mosaic Faces Off With Environmental Groups Over Florida Mine

“What happens in this particular case may determine how much, and in what way, they continue to mine this entire area,” Huber said.

By Ian Berry, OF DOW JONES NEWSWIRES
Mosaic Corp. (MOS) is facing off with environmental groups in Florida so it can maintain output of a key fertilizer component.
The fertilizer maker has secured water permits necessary to expand its mining operations in central Florida. Yet Mosaic, the world’s largest producer of phosphates, is fighting an injunction issued by a federal judge last summer after the Sierra Club and local environmental groups accused the U.S. Army Corps of Engineers, the issuer of the permits, of violating clean-water requirements.
At stake when the two sides return to court next month is about a third of Mosaic’s phosphate production. The Plymouth, Minn. company is experiencing growing demand for fertilizer made from the raw material as farmers try to keep pace with booming global food needs. Phosphate along with nitrogen and potassium, or potash, have drawn increased attention from governments and investors illustrated last year by a $38.6 billion bid byBHP Billiton (BHP) for Potash Corp. of Saskatchewan (POT), a rival of Mosaic.
Mosaic plans to expand its mine in South Fort Meade, Fla. by 11,000 acres as production from the existing acreage dwindles. Investors expect the mine to keep operating, with earnings projections by stock analysts not factoring in the costs of production losses, said Horst Hueniken, an analyst with Stifel Nicolaus in Toronto.
“The collective wisdom of investors is this place is not shutting down,” he said.
Hueniken estimated the mine’s closure could add up to $690 million in annual costs for Mosaic based on current market prices for phosphate, which the company likely would have to buy to replace the lost capacity. Phosphate currently sells for about $150 a ton.
In a recent interview, Mosaic Chief Executive Jim Prokopanko expressed confidence the company would prevail, saying the injunction has a “slim to nil” chance of being upheld on appeal. The company expects to prevail on the overall lawsuit as well.
At issue in the case is whether the Army Corps issued a permit for the mine expansion too hastily and violated the Clean Water Act. The Sierra Club and local environmental groups sued to stop the expansion, saying it could contaminate drinking-water supplies and fisheries in the U.S. Gulf of Mexico, which is connected to the site through a network of swamps and streams.
The Mosaic mine is about 80 miles southwest of Orlando nearly smack in the center of the state. Phosphate deposits have long been mined in Florida, and the state accounts for about 25% of world production.
Sierra Club attorney Eric Huber dismissed Prokopanko’s confidence on the appeal as “puffery.” On average, only 10% of trial-judge rulings are overturned in the U.S. Court of Appeals for the 11th Circuit, where Mosaic’s appeal is being heard, the Sierra Club said.
“What happens in this particular case may determine how much, and in what way, they continue to mine this entire area,” Huber said.
Prokopanko said the Army Corps spent three years examining the company’s permit request, and that work shouldn’t be stopped by a single judge who looked at the case for a couple of days.
“This country would come to a screeching, roaring halt” if such decisions were allowed to stand, he said.
The federal appeals court will hear Mosaic’s appeal of the injunction April 4. A ruling isn’t expected for at least a month and could take four to six months.
For now, Mosaic can continue a 200-acre expansion of the mine, which will be depleted in May. After that, Prokopanko said the company could mine a 1,000-acre area for about 18 months while the case is heard, if need be. Mining the area will come at a higher costs, but will avoid wetlands on which the court case focuses.
CF Industries Holdings Inc. (CF) also mines phosphate in Florida. Chief Executive Stephen Wilson in July said the case was “a troublesome situation,” but noted CF has fully permitted mines that will last through the next decade.
-By Ian Berry, Dow Jones Newswires; 312-750-4072 ;
[email protected]

Sarasota Herald Tribune
ERIC ERNST: Bill would take teeth from local fertilizing rules
http://www.heraldtribune.com/article/20110206/COLUMNIST/102061041/2055/NEWS?p=all&tc=pgall

By Eric Ernst
Published: Sunday, February 6, 2011 at 1:00 a.m.
Last Modified: Saturday, February 5, 2011 at 9:19 p.m.

Contrary to popular belief, or perhaps wishful thinking, a legislative bill in Tallahassee would negate the most important parts of fertilizer rules in Sarasota and Charlotte counties.
Interpretations may vary, but that’s the view of Cris Costello, regional representative of the Sierra Club in Sarasota. She should know. The Sierra Club spearheaded efforts to pass the local laws several years ago to curb the flow of phosphorous and other nutrients into bays and the Gulf of Mexico.
The bill sponsored by two Panhandle representatives would prohibit counties and cities from enacting their own rules. Instead, they would have to adhere to what’s being called “model” statewide legislation, which of course would be weaker and in no meaningful way interfere with business as usual.
The local ordinances prohibit applications during the summer when fertilizer-laden stormwater runoff is most likely to trigger algal blooms such as red tide. They also regulate fertilizer content, setting mandatory levels of slow-release chemicals that are more likely to be absorbed by plants rather than wash into the water.
It makes sense to approach the problem of red tide this way, although if reputable scientific research uncovers flaws in the logic, local jurisdictions can certainly respond with adjustments.
The bill, probably to placate opposition, purports to exempt jurisdictions such as Sarasota and Charlotte that have new rules in place. That assurance is little more than a sham, Costello says.
“The grandfather date applies only to standards not relating to fertilizer content, application timing, application placement and sale,” she wrote in an e-mail.
That means the only parts left of the Sarasota, Charlotte and Lee ordinances would be the standards relating to the management of grass clippings and vegetative material.
“All of the protective standards — rainy season application bans, fertilizer-free buffers, required 50 percent slow release nitrogen — would be eliminated.”
Apparently, having standards that fit the area in which the fertilizer is actually being used is inconvenient to manufacturers and retailers.
They want a one-size-fits-all approach to something that’s not a one-size problem. One of the most compelling reasons to tailor the rules locally is that the drainage patterns and water flows, not to mention the climate, differ from one part of the state to another.
If some businesses can’t adjust to that, too bad for them.
Plenty of smaller, more nimble ventures are ready to take up the slack, as some already have in Sarasota County.
If people want to buy fertilizer, no matter what the formula, companies will respond to produce it and sell it.
And if people use a little less, that’s OK, too, for environmental reasons.
Trying to legislate from Tallahassee, and putting oversight in the hands of the state Department of Agriculture, usurps local control, undermines protection of natural resources and just makes it a lot easier to subvert the process.
It’s probably pure coincidence, but the Lakeland Ledger published an interesting story on Jan 25. Mosaic Co., the phosphate/fertilizer giant, just paid $10,000 for a chocolate hazelnut cake entered by Abigail Putnam in the Polk County Youth Fair Auction. The amount was 10 times larger than any ever received for a cake.
Abigail is the 9-year-old daughter of Adam Putnam, Florida agriculture commissioner.
Eric Ernst’s column runs Wednesdays, Fridays and Sundays. Contact him at [email protected] or (941) 486-3073.