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Released November 01, 2017 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Potash and phosphate miner The Mosaic Company (NYSE:MOS) (Plymouth, Minnesota) reported strong third-quarter 2017 results, despite the company's phosphate operations in Florida suffering from Hurricane Irma in September. Mosaic announced it will idle one of its Florida plants in order strengthen its position in the phosphate market. Industrial Info is tracking $6.5 billion in active Mosaic projects.
In a conference call, Mosaic Chief Executive Officer Joc O'Rourke said: "We have decided to idle our Plant City, Florida, concentrate plant, effective as of the end of 2017 for a period of at least one year. Plant City has the capacity to produce up to 2 million tons of finished phosphate products on an annual basis." For more information, see Industrial Info's plant profile.
O'Rourke explained the reasoning behind the company's decision: "We are making the move in Florida for several reasons. First, Plant City is the highest-cost facility amongst our Florida operations, and it requires a disproportionate amount of sustaining capital each year. As a consequence of idling Plant City, we will be able to optimize our future capital investments and we can increase production at our most efficient Florida operations. ... We are idling Plant City rather than permanently closing it because we want to preserve the optionality to recommence our production when market conditions warrant it."
Among the company's capital investments currently underway is the $3.2 billion development of the K-3 underground phosphate mine in Esterhazy, Saskatchewan. The projects will expand the existing K-1 and K-2 mines at Esterhazy to produce a total of 21 million tons per year of potash ore. An enclosed 11-kilometer overland conveyor system will move ore from the K-3 mine to the K-2 processing plant. Once the mine reaches full production, the total capacity of the Esterhazy complex will be 7 million tons per year of potash. O'Rourke said, "Our potash expansion at K3 is expected to begin producing tons next summer, and that will give us opportunities to further reduce our potash operating costs. The project remains on schedule and on budget. We are currently constructing the conveyor belt to deliver ore to the existing K2 mills, and we are lowering mining machines to the potash scene, which is in the early stages of being built out for mining activities. Over time, we expect K3 to be among the lowest-cost potash mines in the world." Construction on the project began in late 2012. A Stage 2 ramp-up is already in progress that will eventually replace the K-1 and K-2 mines. For more information, see Industrial Info's project reports on the grassroot mine development and the stage 2 expansion.
Mosaic reported third-quarter net income of $227 million, compared with $39 million in third-quarter 2016. The increase in earnings comes despite negative effects of Hurricane Irma on the company's performance. Hurricane Irma made landfall in Florida in early September. Chief Financial Officer Rick Mack said, "Hurricane Irma impacted our phosphate operations in Florida. The combined effect of lost production time and damaged product resulted in approximately 220,000 tons of lost sales during the quarter. The storm tempered what was otherwise a very strong operating quarter for that business unit." The company estimates Hurricane Irma added $26 million in costs during the quarter.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 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.
In a conference call, Mosaic Chief Executive Officer Joc O'Rourke said: "We have decided to idle our Plant City, Florida, concentrate plant, effective as of the end of 2017 for a period of at least one year. Plant City has the capacity to produce up to 2 million tons of finished phosphate products on an annual basis." For more information, see Industrial Info's plant profile.
O'Rourke explained the reasoning behind the company's decision: "We are making the move in Florida for several reasons. First, Plant City is the highest-cost facility amongst our Florida operations, and it requires a disproportionate amount of sustaining capital each year. As a consequence of idling Plant City, we will be able to optimize our future capital investments and we can increase production at our most efficient Florida operations. ... We are idling Plant City rather than permanently closing it because we want to preserve the optionality to recommence our production when market conditions warrant it."
Among the company's capital investments currently underway is the $3.2 billion development of the K-3 underground phosphate mine in Esterhazy, Saskatchewan. The projects will expand the existing K-1 and K-2 mines at Esterhazy to produce a total of 21 million tons per year of potash ore. An enclosed 11-kilometer overland conveyor system will move ore from the K-3 mine to the K-2 processing plant. Once the mine reaches full production, the total capacity of the Esterhazy complex will be 7 million tons per year of potash. O'Rourke said, "Our potash expansion at K3 is expected to begin producing tons next summer, and that will give us opportunities to further reduce our potash operating costs. The project remains on schedule and on budget. We are currently constructing the conveyor belt to deliver ore to the existing K2 mills, and we are lowering mining machines to the potash scene, which is in the early stages of being built out for mining activities. Over time, we expect K3 to be among the lowest-cost potash mines in the world." Construction on the project began in late 2012. A Stage 2 ramp-up is already in progress that will eventually replace the K-1 and K-2 mines. For more information, see Industrial Info's project reports on the grassroot mine development and the stage 2 expansion.
Mosaic reported third-quarter net income of $227 million, compared with $39 million in third-quarter 2016. The increase in earnings comes despite negative effects of Hurricane Irma on the company's performance. Hurricane Irma made landfall in Florida in early September. Chief Financial Officer Rick Mack said, "Hurricane Irma impacted our phosphate operations in Florida. The combined effect of lost production time and damaged product resulted in approximately 220,000 tons of lost sales during the quarter. The storm tempered what was otherwise a very strong operating quarter for that business unit." The company estimates Hurricane Irma added $26 million in costs during the quarter.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 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.
