Full Description

The Mosaic Company (Mosaic), incorporated on January 23, 2004, is a producer and marketer of concentrated phosphate and potash crop nutrients for the global agriculture industry. The Company operates through three business segments: Phosphates, Potash and Offshore. The Phosphates Segment produces phosphate crop nutrients and feed phosphate, which are used in crop nutrients and animal feed ingredients, respectively. The Potash segment mines and processes potash in Canada and the United States, and sells potash in North America and internationally. The Offshore segment produces and/or markets phosphate, potash and nitrogen-based crop nutrients and animal feed ingredients. The Company serves customers in more than 40 countries. As of May 31, 2009, Cargill, Incorporated owned approximately 64.3% of the Company’s outstanding common stock.

The Company had a 50% interest in Saskferco Products Limited Partnership (the Partnership), and its wholly owned subsidiary, Saskferco Products ULC, a Canada-based producer of nitrogen fertilizer and feed ingredients. Mosaic was the exclusive marketing agent for the Partnership’s nitrogen products. The Partnership sold Saskferco Products ULC on October 1, 2008. Mosaic mines phosphate rock in Florida and processes rock into finished phosphate products at facilities in Florida and Louisiana. It mines potash in Saskatchewan, New Mexico and Michigan. The Company has made equity investments in phosphate production facilities and phosphate rock mines in Brazil, and other production, blending or distribution operations or equity investments in many countries.

Phosphates Segment

The Company produces concentrated phosphate crop nutrients and animal feed ingredients. It has the capacity to produce approximately 4.4 million tons of phosphoric acid (P2O5) per year. Phosphoric acid is produced by reacting finely ground phosphate rock with sulfuric acid. The Company’s phosphoric acid production totaled approximately 3.2 million tons during the fiscal year ended May 31, 2009 (fiscal 2009).

Mosaic’s phosphate crop nutrient products are marketed worldwide to crop nutrient manufacturers, distributors and retailers. Its principal phosphate crop nutrient products are diammonium phosphate (DAP) and monoammonium phosphate (MAP). MicroEssentials is a value-added ammoniated phosphate product that is enhanced through a process that creates very thin platelets of sulfur and other micronutrients, such as zinc, on the granulated product. The Phosphates segment produces and markets phosphate-based animal feed ingredients. In fiscal 2009, the Company discontinued feed phosphate production at its Riverview, Florida facility, which was the smaller of its two feed phosphate facilities, and concentrated production at its larger New Wales, Florida facility. The Riverview, Florida facility, continues to produce concentrated phosphate crop nutrients. The Company markets its feed phosphate primarily under the brand names of Biofos and Multifos. The Company produced approximately 6.7 million tons of phosphate crop nutrients during fiscal 2009.

Phosphate rock is the key mineral used to produce phosphate crop nutrients and feed phosphate. Mosaic’s phosphate rock production totaled approximately 13.2 million tons in fiscal 2009. As of May 31, 2009, the Company operated five phosphate mines with a combined annual capacity of approximately 16.4 million tons. These mines are Four Corners, South Fort Meade, Hookers Prairie, Hopewell and Wingate. All of its phosphate mines and related mining operations are located in central Florida. Mosaic uses molten sulfur at its phosphates concentrates plants to produce sulfuric acid primarily for use in its production of phosphoric acid. It purchased approximately three million long tons of sulfur during fiscal 2009.

The Company owns two ocean-going barges and contract for operation of another ocean-going vessel that transport molten sulfur from collection points located in the western United States and the Gulf of Mexico to its phosphate plants in Florida. It owns and operates sulfur terminals in Houston, Texas, and in Tampa, Florida. It also owns a 50% equity interest in Gulf Sulphur Services Ltd., LLLP (Gulf Sulphur Services), which is operated by its joint venture partner. Gulf Sulphur Services has a sulfur transportation and terminaling business in the Gulf of Mexico, and handles these functions for a substantial portion of the Company’s Florida sulfur volume. The Company uses ammonia together with phosphoric acid to produce both DAP and MAP. It used approximately 1.2 million tons of ammonia during fiscal 2009.

Potash Segment

The Company’s potash products are marketed worldwide to crop nutrient manufacturers, distributors and retailers, and are also used in the manufacture of mixed crop nutrients, and to a lesser extent, in animal feed ingredients. It also sells potash to customers for industrial use. In addition, Mosaic’s potash products are used for de-icing and as a water softener regenerant. The Company operates three potash mines in Canada, including two shaft mines with a total of three shafts and one solution mine, as well as two potash mines in the United States, including one shaft mine and one solution mine. It also owns related refineries at each of the mines. As of May 31, 2009, the Company’s potash capacity, excluding tonnage produced at Esterhazy for a third-party pursuant to a contract, totaled 10.4 million tons of product per year. During fiscal 2009, production, excluding tonnage produced for the third party at Esterhazy, totaled 5.9 million tons.

The Company operates three Canadian potash facilities containing four mine shafts, all located in the southern half of the Province of Saskatchewan, including its solution mine at Belle Plaine, two interconnected mine shafts at Esterhazy and its shaft mine at Colonsay. Its potash mines in Canada produce muriate of potash (MOP) exclusively. Its Canadian operations produce 15 different MOP products, including industrial grades, many through the Company’s own processes. Under a long-term contract (the PCS Tolling Contract) with Potash Corporation of Saskatchewan Inc. (PCS), the Company mines and refines the customer’s potash reserves at its Esterhazy mine for a fee plus a pro rata share of operating and capital costs. The contract provides that PCS may elect to receive between 0.45 million and 1.3 million tons of potash per year. The contract provides for a term through December 31, 2011, as well as certain renewal terms at the option of PCS, but only to the extent PCS has not received all of its available reserves under the contract.

In the United States, the Company has two potash facilities, including a shaft mine located in Carlsbad, New Mexico, and a solution mine located in Hersey, Michigan. The Carlsbad ore reserves are of two types: sylvinite, a mixture of potassium chloride and sodium chloride that is the same as the ore mined in Saskatchewan, and langbeinite, a double sulfate of potassium and magnesium. Two types of potash are produced at the Carlsbad refinery. MOP is the primary source of potassium for the crop nutrient industry. Double sulfate of potash magnesia is the second type of potash, which the Company markets under its brand name K-Mag, and contains sulfur, potassium and magnesium, with low levels of chloride. At the Carlsbad facility, the Company mines and refines potash from 68,541 acres of mineral rights. At Hersey, Michigan, it operates a solution mining facility, which produces salt and potash.

Offshore Segment

The Company’s Offshore segment produces and markets phosphate, potash and nitrogen-based crop nutrients and animal feed ingredients, and provides other ancillary services to wholesalers, cooperatives, independent retailers and farmers in South America and the Asia-Pacific regions. The Offshore segment operates production and blending facilities, port facilities and distribution businesses in several countries and owns significant production assets in Brazil. It serves to market output from its Phosphates and Potash segments, as well as its own production operations. It also purchases and markets products from other suppliers worldwide. The Offshore segment’s production facilities include plants that produce single-superphosphate (SSP) and granulated single-superphosphate (GSSP) crop nutrients by mixing sulfuric acid with phosphate rock; blending facilities; nitrogen, phosphorous, potassium (NPK) compound plants, and an animal feed ingredient plant. A blending plant combines several crop nutrient products to make a mixture tailored to specific crop requirements. An NPK plant combines varying amounts of nitrogen, phosphorous and potassium into a single granule.

The Company is a producer and distributor of blended crop nutrients for agricultural use in Brazil. It owns and operates seven blending plants in Brazil, and SSP plants at Paranagua and Cubatao. In addition, the Company leases several other warehouses and blending units depending on sales and production levels. The Cubatao plant also produces animal feed ingredients. Mosaic also has a 62.1% ownership interest in Fospar, S.A. (Fospar). Fospar owns and operates a SSP granulation plant and a deep-water crop nutrition port and throughput warehouse terminal facility in Paranagua. Together, these plants annually distribute approximately two million tons of crop nutrients in Brazil. The Company also has an import terminal that handles approximately 1.4 million tons of imported crop nutrients. The Company has a 20.1% direct and indirect interest in Fosfertil S.A. (Fosfertil), a Brazilian company. Fosfertil owns 100% of Ultrafertil, S.A. Fosfertil is a phosphate-based crop nutrient manufacturer in Brazil, operating a phosphate rock mine and a phosphate processing facility.

In Argentina, the Company supplies products and services to wholesale, retail and farmer customers. In fiscal 2009, it distributed approximately 220,000 tons of nitrogen, phosphate and blended crop nutrients in Argentina. Its Quebracho facility provides logistic services to third parties and provided throughput services for approximately 121,000 tons in fiscal 2009. Its GSSP facility at Quebracho produced approximately 165,000 tons in fiscal 2009. In addition, the Company provides agency services in Argentina for its Phosphates segment for sales to other importers. In Chile, Mosaic distributed blended and straight crop nutrient products primarily to retail dealers. In fiscal 2009, it distributed approximately 169,000 tons of crop nutrient products. It also operates a blending plant in Mexico.

In China, the Company has a 35% interest in a 600,000-ton per year capacity DAP production plant; a 60% interest in a 170,000-ton per year capacity NPK plant, and owns two 200,000-ton per year capacity blending plants. In fiscal 2009, the Company sold approximately 116,000 tons of blends and distributed another 60,000 tons of straight crop nutrients in China. In India, it has distribution facilities and a deep-water port facility to import crop nutrients. In fiscal 2009, the Company distributed approximately 500,000 tons of phosphate crop nutrient products in India. It also serves as a marketing agent for its Phosphates segment and is a wholesale distributor of DAP in India. In Thailand, the Company distributes crop nutrients and has a 240,000-ton per year capacity blending facility. In fiscal 2009, it sold approximately 134,000 tons of blends and distributed another 59,000 tons of straight crop nutrients in Thailand.