* Now expects injunction increases costs by $100 million
* Previously forecast higher costs of $200 million
* Expects ruling on injunction appeal by the fall
* Mosaic shares up 4 percent in midday trading
(Adds executive quotes, byline; updates stock)
By Ernest Scheyder
NEW YORK, July 19 Mosaic Co (MOS.N) has cut in
half the estimated cost of a judge's ruling that keeps the
fertilizer producer from expanding a Florida phosphate mine.
Last week a U.S. judge extended an injunction that keeps
Mosaic from expanding production at its South Fort Meade, Fla.,
Just after the ruling was issued, Mosaic said it could
increase its annual costs by $200 million as it would need to
buy more phosphate rock on the open market.
On a conference call with investors on Tuesday to discuss
the company's quarterly earnings, Mosaic executives said the
damage could now be $100 million due to excess phosphate
capacity they have found at other Mosaic mines.
"The analysis that we've gone through suggests that we are
going to be able to mitigate more of the impact than we first
thought possible," Larry Stranghoener, Mosaic's chief financial
officer, said on the conference call. "We believe we can
significantly mitigate what otherwise might have been a
worse-case situation in terms of purchased rock."
Mosaic processes mined phosphate rock into pebble and fine
phosphate, which are turned into diammonium phosphate, or DAP.
That is what farmers use in their fields.
Effectively, Mosaic's mining operation sells phosphate rock
to its fertilizer production operation. If its own supply were
dented, Mosaic would have to buy from competitors, a situation
executives would like to avoid.
Mosaic has asked a higher U.S. court to cancel the
injunction, though the company does not expect a ruling until
The South Fort Meade, Fla., mine has about 15 years of
phosphate reserves and produces 6.5 million tons of the
fertilizer each year. That represents a third of Mosaic's
yearly phosphate capacity and 4 percent of the world's.
Shares of Mosaic were up 4.0 percent to $69.12 in midday
trading on Tuesday. On Monday the company reported earnings
that beat expectations. [ID:nN1E76H1LJ]
(Reporting by Ernest Scheyder, editing by Gerald E.