Fertilizer producer Mosaic Co. (NYSE: MOS) has reached a settlementagreement over toll production for Potash Corporation of SaskatchewanInc. (PCS) at the company's Esterhazy potash mine.
The parties' were disputing over the obligations of Mosaic'swholly-owned subsidiary, Mosaic Potash Esterhazy Limited Partnership, tosupply potash from its Esterhazy mine to PCS pursuant to a tollingagreement which began in 1978.
Under the terms of the settlement, Mosaic said its obligation tosupply up to around 1.1 million metric tonnes of potash per year underthe tolling agreement will expire December 31, 2012, at which time thetolling agreement will terminate.?
Mosaic said it will receive credit for 1.3 million metric tonnes ofcapacity at Esterhazy for purposes of calculating its relative share ofannual sales of potash to international customers by Canpotex Ltd.,capacity which is currently allocated to PCS.?
Jim Prokopanko, Mosaic's president and CEO said, "The reversion ofthese potash tonnes, including an adjustment of our Canpotexentitlement, along with our previously announced expansion efforts, willincrease our annual potash production capacity to over 16 milliontonnes by 2021."
The settlement will resolve the tolling agreement dispute in itsentirety, cancel the scheduled trial and dismiss the claim of PCS andthe counterclaim of Mosaic, the companies said.
Mosaic shares closed Wednesday's trade at $53.23.
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