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Released February 08, 2017 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--On Tuesday, executives from potash and phosphate miner Mosaic Company (NYSE:MOS) (Plymouth, Minnesota) discussed fourth-quarter earnings and provided capital guidance for 2017. Despite a dip in potash and phosphate prices, the company seemed optimistic that 2017 would be a better year. Industrial Info is tracking $6.5 billion in active Mosaic projects.
Despite a difficult 2016 in regard to potash and phosphate prices, Mosaic Chief Executive Officer James O'Rourke noted that market prices had begun rising again. "We are confident that we have seen the bottom in both phosphate and potash prices, which are now gradually recovering from cyclical lows. We are well positioned to benefit from that recovery," said O'Rourke.
In December, Mosaic announced that it will acquire Vale SA's (NYSE:VALE) (Rio de Janeiro, Brazil) fertilizer business, Vale Fertilizantes, for $2.5 billion. "We are in excellent condition to capitalize on better business conditions going forward," said O'Rourke. "We are working to maximize the opportunities the Vale Fertilizantes acquisition will provide, while maintaining costs and preserving capital so that we can create long-term shareholder value."
As part of the company's cost-reduction plan, O'Rourke announced that Mosaic would lower capital expenditures in 2017 from what had been previously announced. "We expect capex to be in the range of $800 million to $900 million again in 2017, down from our original expectations of $1.2 billion," said O'Rourke.
Mosaic reported fourth-quarter 2016 net income of $12 million, compared with $155 million in fourth-quarter 2015.
Among the major Mosaic projects being tracked by Industrial Info is construction of the K3 underground potash mine near Esterhazy, Saskatchewan. As part of the Stage 2 expansion of the mine, Mosaic is constructing a 3 million-ton-per-year underground mine operation and 11-kilometer enclosed overland conveyor system to transport ores and increase the facility's total capacity to 7 million tons per year. Construction of the project began in 2012 and is expected to be completed this year. Speaking of the project, O'Rourke said, "We expect to reach the potash ore zone 3,400 feet down within the next couple of weeks." The project has an estimated total investment value of $1.5 billion.
A ramp-up of the facility is also on the books, which could increase production to 21 million tons per year. The project remains in the engineering stage and could begin construction in early 2019, taking about four years to complete. This project has an estimated total investment value of $1.7 billion.
In the U.S., the company has its sights set on locations in Florida. Construction of a grassroot, above-ground phosphate mine near Ona, Florida, could begin this summer. The mine would be a six million-ton-per year mine and would replace production from the Four Corners phosphate mine in Florida, which is approaching depletion. Mosaic is also actively permitting another phosphate mine in neighboring Desoto County to maintain production from other mines nearing depletion. The Desoto mine remains in the late planning stages and is not planned to kick off construction until 2020. Both projects have an estimated total investment value of $1 billion.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
Despite a difficult 2016 in regard to potash and phosphate prices, Mosaic Chief Executive Officer James O'Rourke noted that market prices had begun rising again. "We are confident that we have seen the bottom in both phosphate and potash prices, which are now gradually recovering from cyclical lows. We are well positioned to benefit from that recovery," said O'Rourke.
In December, Mosaic announced that it will acquire Vale SA's (NYSE:VALE) (Rio de Janeiro, Brazil) fertilizer business, Vale Fertilizantes, for $2.5 billion. "We are in excellent condition to capitalize on better business conditions going forward," said O'Rourke. "We are working to maximize the opportunities the Vale Fertilizantes acquisition will provide, while maintaining costs and preserving capital so that we can create long-term shareholder value."
As part of the company's cost-reduction plan, O'Rourke announced that Mosaic would lower capital expenditures in 2017 from what had been previously announced. "We expect capex to be in the range of $800 million to $900 million again in 2017, down from our original expectations of $1.2 billion," said O'Rourke.
Mosaic reported fourth-quarter 2016 net income of $12 million, compared with $155 million in fourth-quarter 2015.
Among the major Mosaic projects being tracked by Industrial Info is construction of the K3 underground potash mine near Esterhazy, Saskatchewan. As part of the Stage 2 expansion of the mine, Mosaic is constructing a 3 million-ton-per-year underground mine operation and 11-kilometer enclosed overland conveyor system to transport ores and increase the facility's total capacity to 7 million tons per year. Construction of the project began in 2012 and is expected to be completed this year. Speaking of the project, O'Rourke said, "We expect to reach the potash ore zone 3,400 feet down within the next couple of weeks." The project has an estimated total investment value of $1.5 billion.
A ramp-up of the facility is also on the books, which could increase production to 21 million tons per year. The project remains in the engineering stage and could begin construction in early 2019, taking about four years to complete. This project has an estimated total investment value of $1.7 billion.
In the U.S., the company has its sights set on locations in Florida. Construction of a grassroot, above-ground phosphate mine near Ona, Florida, could begin this summer. The mine would be a six million-ton-per year mine and would replace production from the Four Corners phosphate mine in Florida, which is approaching depletion. Mosaic is also actively permitting another phosphate mine in neighboring Desoto County to maintain production from other mines nearing depletion. The Desoto mine remains in the late planning stages and is not planned to kick off construction until 2020. Both projects have an estimated total investment value of $1 billion.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
