Mosaic Co. is idling its Louisiana phosphate operations, including a once troubled complex near Convent, for the next three months to cut production and reduce an oversupply of agricultural fertilizer in the North American market.
The idling, which starts Oct. 1, affects "north of 370" employees working at Mosaic's Uncle Sam and Faustina facilities straddling each side of the Mississippi River in St. James Parish, a company spokeswoman said Monday.
Mosaic plans to keep a skeleton staff on hand to ready an eventual restart and to ensure contaminated acid water held inside a large gypsum pile at the Uncle Sam facility is safely managed through the shutdown.
"We will still need to, even in an idle state, require a number of employees for ongoing maintenance and to keep it in order so that it can come back up, as well as to meet our regulatory obligations," said Callie Neslund, spokeswoman for Mosaic. "So there will be a number of folks who stay on through the idle."
Neslund couldn't yet say how many would remain working at the complex because those details were still being finalized, but she said employees will be provided information Thursday.
In June, Mosaic permanently closed its previously idled Plant City phosphates facility in Florida as a cost-cutting measure, but Neslund said the Louisiana idling is temporary and that employees there are not getting laid off.
When asked, she didn't rule out that idled employees might not receive some portion of their paychecks during the slowdown.
"We don't know that yet," Neslund said.
The idling is aimed at reducing phosphates production by 500,000 tons, which Neslund said is roughly equivalent to three months of operations. The Uncle Sam plant makes phosphoric and sulfuric acid, which are used to make the fertilizers.
In a statement on the idling Monday, Mosaic also announced a planned $250 million stock buyback and, by 2022, $200 million in cost cutting at its Brazilian operations.
The $7.8 billion company made the announcement before a coming investor meeting. The stock price ended Monday at $20.18 per share, up 64 cents for the day but down $17.19 per share from the 52-week high, Yahoo.com reports.
During the choppy market conditions, Mosaic also has been trying to get a handle on a slipping wall of waste gypsum that keeps hundreds of millions of gallons of acidic process water contaminated with heavy metals and radioactive elements from spilling. The company has been injecting the water underground and working on ways to enhance its evaporation under the oversight of state and federal regulators.
Discovered late last year, the instability in the gypsum pile forced the company to reduce water levels in one of its main storage lakes carved inside the pile to reduce weight pressing down on the 200-foot tall mass. Combined with heavy rains in the past few years, the shift of water out of the main lake forced Mosaic to find new places to put the contaminated liquid.
Earlier this year, environmentalists had called for the plant to be shut because of the moving gypsum pile, but company officials rebuffed that demand, pointing out that continued production at the Uncle Sam complex consumes the water held in storage. A halt then might have only worsened the storage concerns at that time, company officials said then.
State regulators said water levels have dropped in recent months with evaporation from the hot, relatively dry summer. The Uncle Sam complex has the storage capacity to handle three months of idling without any production that would consume the water held in storage, Neslund said.
Greg Langley, spokesman for the state Department of Environmental Quality, said the slippage of the gypsum wall also has slowed significantly in recent months and, due to the sensitivity of the instruments measuring its movement, there is some debate whether it is still moving at all.
He said Mosaic officials have informed regulators that they have a plan to manage the water during the idle period.
"We will continue to oversee what goes on there," Langley said.
While heavy rain last year and in years past helped complicate Mosaic's issues with its water storage at Uncle Sam, heavy rain this year in the country's mid-section helped prompt the production idling at Mosaic. The heavy rain has disrupted North American agriculture. Neslund called it the "wettest, most delayed planting season on record" for farmers.
"And so as a result, the North American phosphate market is significantly oversupplied, which has pushed pricing down below sustainable levels," Neslund said.
Joc O'Rourke, Mosaic president and chief executive officer, said in the statement that excess imports also have affected the supply.
The Louisiana operations serve the North American market, so idling there was seen as the best way to affect market conditions, Neslund said.
In the statement, Mosaic said it expected to see strong North American fertilizer use in the fall, so that supply and demand would be more balanced by 2020.