The Mosaic Company Announces Settlement of Potash Tolling Litigation
PLYMOUTH, Minn., Dec. 8, 2011 /PRNewswire/ — The Mosaic Company (NYSE: MOS) announced today that it has reached a settlement with Potash Corporation of Saskatchewan Inc. (“PCS”) regarding the parties’ dispute over the obligations of Mosaic’s wholly-owned subsidiary, Mosaic Potash Esterhazy Limited Partnership, to supply potash from its Esterhazy mine to PCS pursuant to a tolling agreement which began in 1978. The parties were scheduled to begin trial before the Queen’s Bench Judicial Centre of Saskatoon, Saskatchewan in January 2012. The settlement will resolve the tolling agreement dispute in its entirety, cancel the scheduled trial and dismiss the claim of PCS and the counterclaim of Mosaic.
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Under the terms of the settlement, Mosaic’s obligation to supply up to approximately 1.1 million metric tonnes of potash per year under the tolling agreement will expire December 31, 2012, at which time the tolling agreement will terminate. Also in connection with the settlement, effective December 31, 2012 Mosaic will receive credit for 1.3 million metric tonnes of capacity at Esterhazy for purposes of calculating its relative share of annual sales of potash to international customers by Canpotex Limited, capacity which is currently allocated to PCS.
“We are pleased to reach agreement with PCS on termination of toll production for PCS at our Esterhazy mine, the world’s largest potash mine. This settlement provides certainty to our investors around the timing of this agreement and allows our customers access to this additional inventory,” said Jim Prokopanko, Mosaic’s president and CEO. “The reversion of these potash tonnes, including an adjustment of our Canpotex entitlement, along with our previously announced expansion efforts, will increase our annual potash production capacity to over 16 million tonnes by 2021.”
About The Mosaic Company
The Mosaic Company is one of the world’s leading producers and marketers of concentrated phosphate and potash crop nutrients. Mosaic is a single-source provider of phosphate and potash fertilizers and feed ingredients for the global agriculture industry. More information on the company is available at www.mosaicco.com.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about future financial and operating results. Such statements are based upon the current beliefs and expectations of The Mosaic Company’s management and are subject to significant risks and uncertainties. These risks and uncertainties include but are not limited to the predictability and volatility of, and customer expectations about, agriculture, fertilizer, raw material, energy and transportation markets that are subject to competitive and other pressures and economic and credit market conditions; the level of inventories in the distribution channels for crop nutrients; changes in foreign currency and exchange rates; international trade risks; changes in government policy; changes in environmental and other governmental regulation, including greenhouse gas regulation and implementation of the U.S. Environmental Protection Agency’s numeric water quality standards for the discharge of nutrients into Florida lakes and streams; further developments in the lawsuit involving the federal wetlands permit for the extension of the Company’s South Fort Meade, Florida, mine into Hardee County, including orders, rulings, injunctions or other actions by the court or actions by the plaintiffs, the Army Corps of Engineers or others in relation to the lawsuit, or any actions the Company may identify and implement in an effort to mitigate the effects of the lawsuit; other difficulties or delays in receiving, or increased costs of, necessary governmental permits or approvals; the effectiveness of our processes for managing our strategic priorities; adverse weather conditions affecting operations in Central Florida or the Gulf Coast of the United States, including potential hurricanes or excess rainfall; actual costs of various items differing from management’s current estimates, including among others asset retirement, environmental remediation, reclamation or other environmental regulation or Canadian resource taxes and royalties; accidents and other disruptions involving Mosaic’s operations, including brine inflows at its Esterhazy, Saskatchewan potash mine and other potential mine fires, floods, explosions, seismic events or releases of hazardous or volatile chemicals, as well as other risks and uncertainties reported from time to time in The Mosaic Company’s reports filed with the Securities and Exchange Commission. Actual results may differ from those set forth in the forward-looking statements.
SOURCE The Mosaic Company