Higher Phosphate Prices Increase Mosaic Company's Quarterly Earnings

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Researched by Industrial Info Resources (Sugar Land, Texas)--The Mosaic Company (NYSE:MOS) (Plymouth, Minnesota) yesterday reported third-quarter 2011 net earnings of $542.1 million, up from $222.6 million in the third quarter of 2010.

The company's increased earning is substantially due to higher phosphate prices. While sales volumes were slightly lower than 3Q10, dropping from 2.5 million metric tons to 2.4 million metric tons, the average selling price was up substantially, rising from $336 per ton in 3Q10 to $543 per ton in 3Q11. Quarterly net sales in Mosaic's phosphate segment were $1.5 billion, compared to $1 billion in the previous year's corresponding quarter.

Potash sales were up less significantly, rising from $730 million for the quarter to $757.7 million.

Mosaic CEO James Prokopanko spoke of the market fundamentals driving increased demand for soil nutrients. "Outstanding underlying industry fundamentals remain intact despite recent political unrest and the devastating earthquake and tsunami in Japan, which have roiled commodity markets. Farmers need to plant record acreage and reap ever-increasing yields in order to meet accelerating demand for grains and oilseeds."

The company is investing billions to expand its Belle Plaine and Esterhazy potash mines in Saskatchewan. "Our large potash projects will play a significant role in meeting this demand," he said. "We believe brownfield projects currently under way are sufficient to supply robust demand growth over the course of this decade."

Phase I of the Belle Plaine potash mine expansion is expected to be completed this summer and will add an additional 300,000 to 400,000 tons per year to the 2.2 million ton per year solution mine. A second and third phase will follow. In total, the expansion will more than double the mine's capacity to 4.5 million to 5 million tons per year. In addition, construction of an underground conveyor system is expected to kick off this summer at the mine. Details of these and more than $5 billion worth of active Mosaic Company projects can be found in Industrial Info's North American Industrial Database.

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