August 20, 2014

One Last Big Push for Phosphate Mining

South-central Florida's landscape will be shaped in large part by a company many residents have never heard of. Mosaic is the only big player left in Florida's phosphate industry, and it controls more than 300,000 acres.

Cynthia Barnett | 5/1/2008

Closing moves

Steve Seibert is a former secretary of the state Department of Community Affairs who serves as executive director of Florida’s Century Commission, which was created to advise the governor and Legislature on how the state can achieve a sustainable future. He is also Mosaic’s only Florida resident board member, a position he says he accepted “because I thought I could help this company be thoughtful about its impact on Florida.”

Steve Seibert
Steve Seibert [Photo: Ray Stanyard]
Seibert says the company is just beginning to think about a future beyond phosphate, but his presence on the board is just one indicator that the company is thinking about what it will do with its Florida land when phosphate is mined out. In addition to owning 250,000 acres outright, Mosaic holds mineral rights to another 80,000 acres and options including 30,000 acres on an airpark in Hardee County.

In Tallahassee, Mosaic employs Mark Kaplan, chief of staff under former Gov. Jeb Bush, as its vice president in charge of government affairs. “We have the luxury of being able to take the long view — to imagine what our part of Florida will be like in 2040,” Kaplan says. “As a large landowner and employer, we want to make sure there are vibrant communities left where we’ve mined.”

For now, the company is making so much money in phosphate that any talk of development is on hold. World phosphate stocks are low, while the rate of growth in demand has doubled every year for the past three years, according to the International Fertilizer Association. Dammonium phosphate (the most common fertilizer manufactured in Florida) has sold for as much as $1,000 a metric ton, up from $255 at the start of 2007.

Still, observers say a downturn is unavoidable. The industry’s fortunes have soared and plummeted like a roller coaster for a century. The last major shakeout, which began in 1999 and lasted through 2006, led to the creation of Mosaic and saw seven large-scale phosphate plants close in the United States, six of them in Florida. Mosaic itself shuttered two Florida plants, Green Bay and South Pierce, in 2006 as China transitioned from the largest importer to the second-largest exporter of processed phosphate. Chinese competition remains, and Morocco and other players are ramping up production. A large Saudi Arabian plant is coming online, as are other operations around the globe.

“Supply will increase, and at some point the farmer is not going to be able to continue to pay these prices,” says Paul Clifford, executive director at the phosphate research institute. “I don’t think anyone has repealed the law of supply and demand.”

Mosaic’s opponents aren’t likely to stop phosphate mining in Florida. Realistically, the challenge for them and for the company appears to be to ensure that the company delivers on all its promises even through the inevitable down cycle — to protect water quality and quantity, to restore mined land and to avoid the sorts of ecological disasters the industry has caused in the past. In 2001, for example, Mulberry Phosphates filed for bankruptcy and abandoned its Piney Point and Mulberry plants and gypstacks. DEP was forced to take over maintenance and cleanup at a cost of nearly $200 million. The agency’s efforts to keep the estimated 1.2 billion gallons of acidic wastewater at Piney Point from contaminating Tampa Bay depleted most of the state trust fund that had been established to reclaim phosphate lands mined prior to 1975.

Mosaic has no plans to build more fertilizer plants in Florida, and moreover, “Mosaic’s legacy is important to all of us,” says the company’s senior vice president of phosphate operations, Steven L. Pinney, a former Cargill vice president in Florida who is now a senior vice president of phosphate operations based in Minnesota.

“We’re in this for the long term,” Pinney says. “Walking away from our responsibilities is unacceptable.”

The Miners
And Then There Were Three

Once, more than 100 companies were involved in mining phosphate in Florida. Today, only three miners remain, and none is based in the state. Thanks to demand for fertilizer for corn crops for ethanol and rising world demand for food, all three companies are enjoying the highest earnings in their histories:

  • Mosaic (NYSE-MOS)
    Headquarters — Minneapolis
    2007 revenue — $5.8 billion
  • CF Industries (NYSE-CF)
    Headquarters — Chicago
    2007 revenue — $2.8 billion (41% over 2006)
  • Potash Corp. (NYSE-POT)
    (Parent to PCS Phosphate, which mines in north Florida)
    Headquarters — Saskatchewan, Canada
    2007 revenue — $5.2 billion

Tags: North Central, Agriculture, Environment

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