Mine Closure Could Tighten DAP Supplies
Mosaic says it could shut Florida plant in September if ruling in environmental lawsuit not overturned.
Bryce Knorr
Published: Aug 3, 2010
Tight world phosphate supplies could get tighter, if a major U.S. producer follows through with threats to close one of its big Florida plants.
Mosaic said its South Meade mine could close in September, unless a temporary restraining order issued last week blocking expansion of the facility is lifted. In a worst-case scenario that would cut DAP supplies in the second half of the year by 1 million metric tons the company said.
Wholesale DAP prices already this summer shot higher by more than $60 a short ton in the U.S., as the market continues to recover from its roller coaster downturn caused by the global financial crisis. Company officials, in a conference call with analysts Monday, declined to speculative on what the mine’s closure could mean for prices.
A federal district court judge Friday blocked the U.S. Army Corps of Engineers from allowing Mosaic to expand the mine, which has a capacity of 6 million tons a year. While the company declined to say just how much DAP production could be affected annually, that amounts to 3.5 million tons of DAP, more than the current forecast for global reserves.
The company last month sent 60-day notices to workers at the mine that they could be laid off, a move required by federal law. That means the mine could be shut as early as September. Current reserves at the site are nearly exhausted without the expansion, according to the company.
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