FinanceLooker

Excrept from filing document 2024-12-31

As of June 28 2024 the aggregate market value of the registrant s voting common stock held by stockholders other than directors executive officers subsidiaries of the Registrant and any other person known by the Registrant as of the date hereof to beneficially own ten percent or more of any class of Registrant s outstanding voting common stock and consisting of shares of Common Stock was approximately 7 0 billion based upon the closing price of a share of Common Stock on the New York Stock Exchange on that date
The Mosaic Company is the world s leading producer and marketer of concentrated phosphate and potash crop nutrients Through our broad product offering we are a single source supplier of phosphate and potash based crop nutrients and animal feed ingredients We serve customers in approximately 40 countries We are the second largest integrated phosphate producer in the world and one of the largest producers and marketers of phosphate based animal feed ingredients in North America and Brazil We are the leading fertilizer production and distribution company in Brazil We mine phosphate rock in Florida Brazil and Peru We process rock into finished phosphate products at facilities in Florida Louisiana and Brazil We are typically one of the top four global potash producers in the world We mine potash in Saskatchewan New Mexico and Brazil We have other production blending or distribution operations in Brazil China India and Paraguay Our operations serve the top four nutrient consuming countries in the world China India U S and Brazil
We conduct our business through wholly and majority owned subsidiaries as well as businesses in which we own less than a majority or a non controlling interest We are organized into three reportable business segments Phosphates Potash and Mosaic Fertilizantes Intersegment eliminations unrealized mark to market gains losses on derivatives debt expenses and the results of the China and India distribution businesses are included within Corporate Eliminations and Other
We sell phosphate based crop nutrients and animal feed ingredients throughout North America and internationally We account for approximately 66 of estimated North American annual production of concentrated phosphate crop nutrients
We sell potash throughout North America and internationally principally as fertilizer but also for use in industrial applications and to a lesser degree as animal feed ingredients We account for approximately 35 of estimated North American annual potash production
We produce and sell phosphate and potash based crop nutrients and animal feed ingredients in Brazil In addition to five phosphate rock mines four chemical plants and a potash mine in Brazil this segment consists of sales offices crop nutrient blending and bagging facilities port terminals and warehouses in Brazil and Paraguay The Mosaic Fertilizantes segment also serves as a distribution outlet for our Phosphates and Potash segments We account for approximately 70 to 80 of estimated annual production of concentrated phosphate crop nutrients in Brazil and 100 of estimated annual potash production in Brazil
to exchange our 25 ownership of the Ma aden Wa ad al Shamal Phosphate Company for 111 012 433 shares of Ma aden The transaction closed on December 24 2024 at a value of approximately 1 5 billion resulting in a pre tax gain of approximately 0 5 billion The shares are reflected in Investments in Equity Securities in our Consolidated Balance Sheet at December 31 2024
In February 2025 the U S imposed tariff increases on imports from several countries including a 25 tariff on most imports from Canada including potash Subsequently the implementation of these tariffs has been paused for 30 days following an agreement between the U S and Canada At this time we do not expect these tariffs to have a significant impact on our Potash business and operating results
Throughout the discussion below we measure units of production sales and raw materials in metric tonnes which are the equivalent of 2 205 pounds or 1 102 tons U S standard unless we specifically state that we mean short or long ton s which are the equivalent of 2 000 pounds and 2 240 pounds respectively In addition we measure natural gas a raw material used in the production of our products in MM BTU which stands for one million British Thermal Units
S K 1300 requires us to disclose our mineral resources in addition to our mineral reserves as of the end of our most recently completed fiscal year both in the aggregate and for each of our individually material mining properties We have four material properties Belle Plaine Esterhazy Florida and Tapira See Item 2 Properties for further information regarding mineral reserves and resource and discussion of our material mining properties
This report includes market share and industry data and forecasts that we obtained from publicly available information and industry publications surveys market research internal company surveys and consultant surveys We believe these sources to be reliable but there can be no assurance as to the accuracy and completeness of such information We have not independently verified the data from third party sources nor have we ascertained the underlying economic assumptions relied
upon therein Similarly internal company surveys industry forecasts and market research which we believe to be reliable based upon management s knowledge of the industry have not been verified by any independent sources
Our Phosphates business segment owns and operates mines and production facilities in Florida which produce concentrated phosphate crop nutrients and phosphate based animal feed ingredients and processing plants in Louisiana which produce concentrated phosphate crop nutrients We have a 75
The following map shows the locations of each of our phosphate concentrates plants in the U S and each of our active temporarily idled and planned phosphate mine locations including beneficiation plants in Florida The reserves associated with our Ona Florida location have been allocated to other active mines based on our future mining plans
is the key building block for the production of high analysis or concentrated phosphate crop nutrients and animal feed products and is the most comprehensive measure of phosphate capacity and production and a commonly used benchmark in our industry Our U S P
production totaled approximately 2 9 million tonnes during 2024 Our U S operations account for approximately 6 of estimated global annual production and 53 of estimated North American annual output of P
is the most widely used high analysis phosphate crop nutrient worldwide DAP is produced by first combining phosphoric acid with anhydrous ammonia in a reaction vessel This initial reaction creates a slurry that is then pumped into a granulation plant where it is reacted with additional ammonia to produce DAP DAP is a solid granular product that is applied directly or blended with other solid plant nutrient products such as urea and potash
is the second most widely used high analysis phosphate crop nutrient MAP is also produced by first combining phosphoric acid with anhydrous ammonia in a reaction vessel The resulting slurry is then pumped into the granulation plant where it is reacted with additional P
is a value added ammoniated phosphate product that is enhanced through a patented process that creates very thin platelets of sulfur and other micronutrients such as zinc on the granulated product The patented process incorporates both the sulfate and elemental forms of sulfur providing season long availability to crops
Operational capacity is our estimated long term capacity based on an average amount of scheduled down time including maintenance and scheduled turnaround time and product mix and no significant modifications to operating conditions equipment or facilities
Actual production varies from annual operational capacity shown in the above table due to factors that include among others the level of demand for our products maintenance and turnaround time accidents mechanical failure product mix and other operating conditions
Phosphate rock is the key mineral used to produce phosphate crop nutrients and feed phosphate Our Florida phosphate rock mines produced approximately 8 9 million tonnes in 2024 and accounted for approximately 47 of estimated North American annual production We are the world s second largest miner of phosphate rock excluding China and currently operate four mines in North America with a combined annual capacity of 17 2 million tonnes Additionally we own 75 of the Miski Mayo Mine which has an annual capacity of 4 8 million tonnes Production of one tonne of DAP requires between 1 6 and 1 7 tonnes of phosphate rock
All of our wholly owned phosphate mines and related mining operations in North America are located in central Florida During 2024 we operated three active mines in Florida Four Corners South Fort Meade and Wingate We plan to explore and develop the DeSoto property and the South Pasture property which was previously idled to offset future depletion at our Florida properties We have a 75 economic interest in the Miski Mayo Mine which allows us to supplement our other produced rock to meet our overall fertilizer production needs and is the primary source of rock for our Louisiana operations We have the right to use or sell to third parties 75 of the Miski Mayo Mine s annual production
See Item 2 Properties for a discussion of our phosphate mining properties including processing methods facilities production and summaries of our mineral resources and reserves both in the aggregate and for our individual material phosphate mining properties
We purchased approximately 3 0 million long tons of sulfur during 2024 We purchase the majority of this sulfur from North American oil and natural gas refiners who are required to remove or recover sulfur during the refining process Production of one tonne of DAP requires approximately 0 40 long tons of sulfur We procure our sulfur from multiple sources and receive it by truck rail barge and vessel either directly at our phosphate plants or have it sent for gathering to terminals that are located on the U S gulf coast In addition we use formed sulfur received through Tampa Florida ports which are delivered by truck to our New Wales facility and melted through our sulfur melter
We also lease terminal space in Beaumont Texas We have long term time charters on two ocean going tugs barges and one ocean going vessel that transports molten sulfur from the Texas terminals to Tampa We then further transport by truck to our Florida phosphate plants Our sulfur logistic assets also include a large fleet of leased railcars that supplement our marine sulfur logistic system Our Louisiana operations are served by truck from nearby refineries
Although sulfur is readily available from many different suppliers and can be transported to our phosphate facilities by a variety of means sulfur is an important raw material used in our business that has in the past been and may in the future be the subject of volatile pricing and availability Alternative transportation and terminaling facilities might not have sufficient capacity to fully serve all of our facilities in the event of a disruption to current transportation or terminaling facilities Changes in the price of sulfur or disruptions to sulfur transportation or terminaling facilities could have a material impact on our business We have included a discussion of sulfur prices in our Management s Analysis
We consumed approximately 1 0 million tonnes of ammonia during 2024 Production of one tonne of DAP requires approximately 0 23 tonnes of ammonia We purchase approximately one third of our ammonia from various suppliers in the spot market with the remaining two thirds either purchased through our ammonia supply agreement the
Our Florida ammonia needs are currently supplied under multi year contracts with both domestic and offshore producers Ammonia for our Florida plants is terminaled through owned ammonia facilities at the Port of Tampa and Port Sutton Florida Ammonia is transported by pipeline from the terminals to our production facilities We have service agreements with the operators of the pipelines for Bartow New Wales and Riverview which provide service through June 30 2025 with two year auto renewal provisions unless either party objects
Under the CF Ammonia Supply Agreement we purchased 556 232 metric tonnes in 2024 This contract terminated effective January 1 2025 We now have agreements with various suppliers to ensure we have reliable sources of supply for ammonia to support competitive pricing in various market conditions
We produce ammonia at Faustina Louisiana primarily for our own consumption Our annual capacity is approximately 530 000 tonnes From time to time we sell surplus ammonia to unrelated parties and or may transport surplus ammonia to the Port of Tampa In certain circumstances we source ammonia from alternative sources to receive at Faustina
Although ammonia is readily available from many different suppliers and can be transported to our Phosphates facilities by a variety of means ammonia is an important raw material used in our business that has in the past been and may in the future be the subject of volatile pricing In addition alternative transportation and terminaling facilities might not have sufficient capacity to fully serve all of our facilities in the event of a disruption to existing transportation or terminaling facilities Changes in the price of ammonia or disruptions to ammonia transportation or terminaling could have a material impact on our business We have included a discussion of ammonia prices in our Management s Analysis
Natural gas is the primary raw material used to manufacture ammonia At our Faustina facility ammonia is manufactured on site The majority of natural gas is purchased through firm delivery contracts based on published index based prices and is sourced from Texas and Louisiana via pipelines interconnected to the Henry Hub We use over the counter swap and or option contracts to forward price portions of future natural gas purchases We typically purchase approximately 12 0 million MM BTU of natural gas per year for use in ammonia production at Faustina
Our ammonia requirements for our Florida operations are purchased rather than manufactured on site Therefore while we typically purchase approximately 3 2 million MM BTU of natural gas per year in Florida it is only used as a thermal fuel for various phosphate production processes
We are a significant landowner in the State of Florida which has in the past been considered one of the fastest areas of population growth in the U S We have land holdings totaling over 368 000 acres These land holdings give Mosaic access to phosphate rock reserves and exist as fee simple mining agreements or mineral rights Some of our land holdings are needed to operate our Phosphates business while a portion of our land assets such as certain reclaimed properties are no longer required for our ongoing operations As a general matter more of our reclaimed property becomes available for uses other than for phosphate operations each year Our real property assets are generally comprised of concentrates plants port facilities phosphate mines and other property which we have acquired through our presence in Florida Our long term future land use strategy is to optimize the value of our land assets
We are one of the leading potash producers in the world We mine and process potash in Canada and the U S and sell potash in North America and internationally The term potash applies generally to the common salts of potassium Muriate of potash
is the primary source of potassium for the crop nutrient industry Red MOP has traces of iron oxide The granular and standard grade red MOP products are well suited for direct fertilizer application and bulk blending White MOP has a higher percent potassium oxide
White MOP besides being well suited for the agricultural market is used in many industrial applications We also produce a double sulfate of potash magnesia product which we market under our brand name K Mag
Our potash products are marketed worldwide to crop nutrient manufacturers distributors and retailers and are also used in the manufacturing of mixed crop nutrients and to a lesser extent in animal feed ingredients We also sell potash to customers for industrial use In addition our potash products are used for de icing and as a water softener regenerant
In 2024 we operated three potash mines in Canada including two shaft mines and one solution mine as well as one potash shaft mine in the U S Esterhazy the largest potash mine in the world has completed full ramp up of capacity and production The K3 mine shaft expansion has been supplying the capacity and production needed since the closure of the K1 and K2 shafts in the second quarter of 2021 Decommissioning of the K1 and K2 shafts at our Esterhazy Saskatchewan mine was completed in 2022
Mosaic leases approximately 291 500 acres of mineral rights from the government of Saskatchewan and approximately 99 700 acres of freehold mineral rights in the Kronau Regina area which have not been developed
We pay Canadian resource taxes consisting of the Potash Production Tax and resource surcharge The Potash Production Tax is a Saskatchewan provincial tax on potash production and consists of a base payment and a profits tax We also pay a percentage of the value of resource sales from our Saskatchewan mines In addition to the Canadian resource taxes royalties are payable to the mineral owners in respect of potash reserves or production of potash We have included a further discussion of the Canadian resource taxes and royalties in our Management s Analysis
Our North American potash annualized operational capacity totals 11 5 million tonnes of product per year and accounts for approximately 14 of world annual capacity and 41 of North American annual operational capacity Production during 2024 totaled 8 8 million tonnes We account for approximately 12 of estimated world annual production and 35 of estimated North American annual production
Actual production varies from annual operational capacity shown in the above table due to factors that include among others the level of demand for our products maintenance and turnaround time the quality of the reserves and the nature of the geologic formations we are mining at any particular time accidents mechanical failure product mix and other operating conditions
sales Canpotex members respective shares of Canpotex sales are based upon the members respective proven peaking capacities for producing potash When a Canpotex member expands an existing mine the new capacity is added to that member s proven peaking capacity based on either a 90 day production run at the maximum production levels or an engineering audit of the expansion performed by an independent engineering firm in accordance with approved protocols The annual operational capacity of a mine reported in the table above can exceed the annualized proven peaking capacity until the proving run or engineering audit has been completed Our current entitlement percentage of Canpotex is 36 2 however in 2024 our percentage was 34 5 due to lower shipments as a result electrical equipment problems
Annual operational capacity is our estimated potash production capacity based on the quality of reserves and the nature of the geologic formations expected to be mined milled and or processed over the long term average amount of scheduled down time including maintenance and scheduled turnaround time and product mix and no significant modifications to operating conditions equipment or facilities Operational capacities will continue to be updated to the extent new production results impact ore grades assumptions
Our Colonsay mine operates as a swing mine to meet market demands We have the ability to reach an annual operating capacity of 2 1 million tonnes over time by increasing our staffing levels and investment in mine development activities
Following completion of our Esterhazy K3 expansion project a third party audit assessed our Esterhazy Facility s nameplate capacity at 7 8 million tonnes To date we have been unable to rely upon this audit as a basis for an increase to our Canpotex entitlement percentage We are evaluating when to take the necessary steps to complete the entitlement adjustment process
See Item 2 Properties for a discussion of our potash mining properties including processing methods facilities production and summaries of our mineral resources and reserves both in the aggregate and for our individual material potash mining properties
Natural gas is used at our Belle Plaine solution mine as a fuel to produce steam and to dry potash products The steam is used to generate electricity and provide thermal energy to the evaporation crystallization and solution mining processes The Belle Plaine solution mine typically accounts for approximately 80 of our Potash segment s total natural gas requirements for potash production At our shaft mines natural gas is used as a fuel to heat fresh air supplied to the shaft mines and for drying potash products Combined natural gas usage for both the solution and shaft mines totaled 17 2 million MM BTU during 2024 We purchase our natural gas requirements on firm delivery index price based physical contracts and on short term spot priced physical contracts Our Canadian operations purchase physical natural gas from companies in Alberta and Saskatchewan using AECO price indices references and transport the gas to our plants via the TransGas pipeline system The
U S potash operation in New Mexico purchases physical gas in the southwest respective regional market using the El Paso San Juan Basin market pricing reference We use financial derivative contracts to manage the pricing on portions of our natural gas requirements
Our Mosaic Fertilizantes segment owns and operates mines chemical plants crop nutrient blending and bagging facilities port terminals and warehouses in Brazil and Paraguay which produce and sell concentrated phosphate crop nutrients phosphate based animal feed ingredients and pot
We are the largest producer and one of the largest distributors of blended crop nutrients for agricultural use in Brazil We produce and sell phosphate and potash based crop nutrients and animal feed ingredients through our operations Our operations in Brazil include five phosphate mines four chemical plants and a potash mine We own and operate ten blending plants in Brazil and one blending plant and port in Paraguay We are currently constructing a one million tonne distribution facility in northern Brazil in Palmeirante In addition we lease several other warehouses and blending units depending on sales and production levels We also have a 62 ownership interest in Fospar S A
Fospar owns and operates an SSP defined below granulation plant which produces approximately 0 5 million tonnes of SSP per year and a deep water port and throughput warehouse terminal facility in Paranagua Brazil The port facility at Paranagua handles approximately
3 6 million tonnes of imported crop nutrients In 2024 Mosaic Fertilizantes sold approximately 9 0 million tonnes of crop nutrient products and accounted for approximately 18 of fertilizer shipments in Brazil
We have the capability to annually produce approximately 4 5 million tonnes of phosphate and potash based crop nutrients and animal feed ingredients Crop nutrient products produced are marketed to crop nutrient manufacturers distributors retailers and farmers
is the key building block for the production of high analysis or concentrated phosphate crop nutrients and animal feed products and is the most comprehensive measure of phosphate capacity and production and a commonly used benchmark in our industry Our Brazilian phosphoric acid production totaled approximately 1 0 million tonnes in 2024 and accounted for approximately 89 of Brazilian annual output
MAP is a crop nutrient composed of two macronutrients nitrogen and phosphoric acid This slurry is added inside a rotary drum type granulator with ammonia to complete the neutralization reaction and produce MAP
TSP is a highly concentrated phosphate crop nutrient TSP is produced from the phosphate rock reaction with phosphoric acid in a kuhlmann type reactor The process for the production of TSP in Brazil is run of pile where the product undergoes a curing process of approximately seven days for later granulation
SSP is a crop nutrient with a low concentration of phosphorus that is used in agriculture because of the sulfur content in its formulation SSP is produced from mixing phosphate rock with sulfuric acid in a kuhlmann or malaxador type reactor After the reaction the product goes to the curing process and then feeds the granulation units
Dicalcium phosphate is produced by the reaction of desulphurized phosphoric acid with limestone At Uberaba it is produced from the reaction of concentrated phosphoric acid with limestone slurry At Cajati the phosphoric acid is diluted with dry limestone The reaction of the DCP occurs in a kuhlmann or spinden type reactor
Our primary mines and chemical plants are located in the states of Minas Gerais São Paulo and Goias Production of our animal feed ingredients products is located at our Uberaba Minas Gerais and Cajati São Paulo facilities We market our feed phosphate primarily under the brand name Foscálcio
Our ability to produce processed phosphate has been less than our annual operational capacity as stated in the table above except to the extent we purchase phosphoric acid Factors affecting actual production are described in note c below
Actual production varies from annual operational capacity shown in the table above due to factors that include among others the level of demand for our products maintenance and turnaround time accidents and mechanical failure
Phosphate rock is the key mineral used to produce phosphate crop nutrients and animal feed product Our phosphate rock production in Brazil totaled approximately 3 9 million tonnes in 2024 which accounted for approximately 74 of estimated Brazilian annual production We are the largest producer of phosphate rock in Brazil and currently have an annual capacity of approximately 4 6 million tonnes During 2024 we operated five properties Araxá Patrocínio and Tapira in the state of Minas Gerais Catalão in the state of Goiás and Cajati in the state of São Paulo
Production of one tonne of MAP requires 1 6 to 1 7 tonnes of phosphate rock Production of one tonne of SSP requires between 0 6 to 0 7 tonnes of phosphate rock Production of one tonne of TSP requires 1 4 tonnes of phosphate rock
See Item 2 Properties for a discussion of our Brazilian mining properties including processing methods facilities production and summaries of our mineral resources and reserves both in the aggregate and for our individually material Brazilian properties
We are required to pay royalties to mineral owners and resource taxes to the Brazilian government for phosphate and potash production The resource taxes known as Compensação Financeira pela Exploração de Recursos Minerais or CFEM
We use molten sulfur at our phosphate concentrates plants to produce sulfuric acid one of the key components used in the production of phosphoric acid We consumed approximately 1 0 million long tons of sulfur for our own production during 2024 We purchase approximately 14 of the volume under annual supply agreements from oil and natural gas refiners who are required to remove or recover sulfur during the refining process The remaining 86 is purchased in the spot market
Although sulfur is readily available from many different suppliers and can be transported to our phosphate facilities by a variety of means sulfur is an important raw material used in our business that has in the past been and could in the future be subject to volatile pricing and availability Alternative transportation and terminaling facilities might not have sufficient capacity to fully serve all of our facilities in the event of a disruption to current transportation or terminaling facilities Changes in the price of sulfur or disruptions to sulfur transportation or terminaling facilities could have a material impact on our business
We use ammonia together with phosphoric acid to produce MAP and to a lesser extent for SSP production We consumed approximately 118 280 tonnes of ammonia during 2024 Production of one tonne of MAP requires approximately 0 137 tonnes of ammonia We purchase all of our ammonia under a long term supply agreement with two suppliers Ammonia is imported through the Tiplam port and transported by truck to Uberaba Araxá and Catalão
We own approximately 1 of the Tiplam terminal in Santos São Paulo Our ownership percentage along with a contractual agreement guarantee us unloading priority for ammonia and also provide us unloading capacity for rock sulfur and crop nutrients
Although ammonia is readily available from many different suppliers and can be transported to our phosphates facilities by a variety of means ammonia is an important raw material used in our business that has in the past been and in the future could be subject to volatile pricing Alternative transportation and terminaling facilities might not have sufficient capacity to fully serve all of our facilities in the event of a disruption to existing transportation or terminaling facilities Changes in the price of ammonia or disruptions to ammonia transportation or terminaling could have a material impact on our business
We conduct potash operations through the leased Taquari Vassouras shaft mine which is the only potash mine in Brazil located in Rosário do Catete in the Brazilian state of Sergipe We also own a related refinery at the site We produce and sell potash product domestically MOP is the primary source of potassium for the crop nutrient industry in Brazil Red MOP has traces of iron oxide The granular and standard grade red MOP products are well suited for direct fertilizer application and bulk blending Our potash product is marketed in Brazil to crop nutrient manufacturers distributors and retailers and is also used in the manufacturing of crop nutrients
Mosaic Fertilizantes owns properties and the surface rights of certain rural lands comprising over 34 000 hectares 84 000 acres in the States of São Paulo Minas Gerais Goiás Paraná Mato Grosso Santa Catarina Bahia and Sergipe and has the right to mine additional properties which contain phosphate rock or potash reserves Most of our land holdings are needed to operate our phosphate and potash production and fertilizer distribution businesses A portion of our land assets may no longer be required for our current operations and may be leased to third parties for agricultural or other purposes or may be set aside for mineral or environmental conservation Our real property assets are generally comprised of concentrates plants port facilities and phosphate and potash mines crop nutrient blending and bagging facilities and other properties which we have acquired through our presence in Brazil
Our China and India distribution businesses market phosphate potash and nitrogen based crop nutrients and provide other ancillary services to wholesalers cooperatives independent retailers and farmers in the Asia Pacific regions These operations provide our Phosphates and Potash segments access to key markets outside of North and South America and serve as a marketing agent for our Phosphates segment In 2024 the India and China operations purchased 25 233 tonnes of phosphate based products from our Phosphates segment and 1 077 567 tonnes of potash products from our Potash segment and Canpotex They also purchase phosphate potash and nitrogen products from unrelated third parties which we either use to produce blended crop nutrients or for resale
In China we own two 300 000 tonne per year capacity blending plants In 2024 we sold approximately 325 000 tonnes of Blends and distributed another 850 000 tonnes of phosphate and potash crop nutrients in China
Customer service and the ability to effectively minimize the overall supply chain costs are key competitive factors in the crop nutrient and animal feed ingredients businesses In addition to our production facilities to service the needs of our customers we own or have contractual throughput or other arrangements at strategically located distribution warehouses along or near the Mississippi and Ohio Rivers as well as in other key agricultural regions of the U S and Canada From these facilities we distribute Mosaic produced phosphate and potash products for customers who in turn resell the product into the distribution channel or directly to farmers in the U S and Canada
We own port facilities in Tampa Florida which have deep water berth capabilities providing access to the Gulf Coast of the United States We also own warehouse distribution facilities in Rosemount Minnesota Pekin Illinois and Henderson Kentucky
In addition to the facilities that we own our U S distribution operations also include leased distribution space or contractual throughput agreements in other key geographical areas including California Florida Illinois Indiana Iowa Kentucky Louisiana Minnesota Missouri Nebraska North Dakota Ohio Oklahoma Texas and Wisconsin
Outside of the U S and Canada we market our Phosphates segment s products through our Mosaic Fertilizantes segment and our China and India distribution businesses as well as a sales force focused on geographies outside of North America The countries that account for the largest amount of our phosphates sales outside the U S by volume are Canada Brazil Colombia Australia and Argentina
Our sales of potash products outside of the U S and Canada are made through Canpotex Canpotex sales are allocated among its members based on peaking capacity Our entitlement percentage of Canpotex was 36 2 however in 2024 our percentage was 34 5 due to lower shipments as a result electrical equipment problems
Our potash exports from Carlsbad are sold through our own sales force We also market our Potash segment s products through our Mosaic Fertilizantes segment and our China and India distribution businesses which acquire potash primarily through Canpotex The countries that account for the largest amount of international potash sales by volume are Brazil China Indonesia India and Belgium
To service the needs of our customers our Mosaic Fertilizantes segment includes a network of strategically located sales offices crop nutrient blending and bagging facilities port terminals and warehouse distribution facilities that we own and operate The blending and bagging facilities primarily produce Blends from phosphate potash and nitrogen The average product mix in our Blends by volume contains approximately 22 nitrogen 45 phosphate and 33 potash although this mix differs based on seasonal and other factors All of our production in Brazil is consumed within the country
Our India and China distribution businesses also includes a network of strategically located sales offices crop nutrient blending and bagging facilities port terminals and warehouse distribution facilities These businesses serve primarily as a sales outlet for our North American phosphate production both for resale and as an input for Blends Our Potash segment also has historically furnished the majority of the raw materials needs for the production of Blends primarily via Canpotex and is expected to continue to do so in the future
With a strong brand position in a multi billion dollar animal feed ingredients global market our Phosphates segment supplies animal feed ingredients for poultry and livestock to customers in North America Latin America and Asia Our potash sales to non agricultural users are primarily to large industrial accounts and the animal feed industry Additionally in North America we sell potash for de icing and as a water softener regenerant In Brazil we also sell phosphogypsum
In 2023 we announced the formation of the Mosaic Biosciences platform a global initiative to bring the latest science and innovation to the agricultural market The Mosaic Biosciences portfolio includes biological fertilizer complements which improve nutrient use efficiency and enhance plant growth and vigor
The Mosaic Biosciences platform has grown through the acquisition of Plant Response in late 2021 and organically from the addition of new products Our portfolio of products has been successful with customers and benefits greatly from our existing fertilizer distribution network to our customers In 2024 Mosaic Biosciences reached 9 million acres of coverage in key markets this year which is double the prior year Mosaic Biosciences is included primarily within Corporate Eliminations and Other
Because crop nutrients are global commodities available from numerous sources crop nutrition companies compete primarily on the basis of delivered price Other competitive factors include product quality cost and availability of raw materials customer service plant efficiency and availability of product As a result markets for our products are highly competitive We compete with a broad range of domestic and international producers including farmer cooperatives subsidiaries of larger companies and independent crop nutrient companies Foreign competitors may have access to less expensive raw materials may not have to comply with as stringent regulatory requirements or are owned or subsidized by governments and as a result may have cost advantages over North American companies We believe that our extensive North American and international production and distribution system provides us with a competitive advantage by allowing us to achieve economies of scale transportation and storage efficiencies and obtain market intelligence Also we believe our performance products such as MicroEssentials
Unlike many of our competitors we have our own distribution system to sell phosphate and potash based crop nutrients and animal feed ingredients whether produced by us or by other third parties around the globe In North America we have one of the largest and most strategically located distribution systems for crop nutrients including warehouse facilities in key agricultural regions We also have an extensive network of distribution facilities internationally including in the key growth regions of South America and Asia with port terminals warehouses and blending plants in Brazil Paraguay China and India Our global presence allows us to efficiently serve customers in approximately 40 countries
Our Phosphates segment operates in a highly competitive global market Among the competitors in the global phosphate industry are domestic and foreign companies as well as foreign government supported producers in Asia and North Africa Phosphate producers compete primarily based on price as well as product quality service and innovation Major integrated producers of feed phosphate are located in the U S Europe and China Many smaller producers are located in emerging markets around the world Many of these smaller producers are not miners of phosphate rock or manufacturers of phosphoric acid and are required to purchase this material on the open market
We believe that we are a low cost integrated producer of phosphate based crop nutrients due in part to our scale vertical integration and strategic network of production and distribution facilities As the world s second largest producer of concentrated phosphate as well as the second largest miner of phosphate rock in the world and the largest in the U S we maintain an advantage over some competitors as the scale of operations effectively reduces production costs per unit We are also vertically integrated to captively supply one of our key inputs phosphate rock to our phosphate production facilities We believe that our position as an integrated producer of phosphate rock provides us with a significant cost advantage over competitors that are non integrated phosphate producers In addition our ownership in the Miski Mayo Mine allows us to supplement our overall phosphate rock needs
We produce ammonia at our Faustina Louisiana concentrates plant in quantities sufficient to meet approximately one third of our total ammonia needs in North America We do not have ammonia production capacity within Florida to serve our Florida operations but we have capacity to supply a portion of our requirements by transporting produced ammonia from Louisiana to Florida We purchase additional ammonia from world markets and thus are subject to significant volatility in our purchase price of ammonia Our ammonia supply agreements provide us with a supply of a substantial volume of ammonia at prices based on the price of natural gas
With our dedicated sulfur transportation barges and tugs we are also well positioned to source an adequate flexible and cost effective supply of sulfur our third key input to our Florida and Louisiana phosphate production facilities We believe that our investments in sulfur logistical and melting assets continue to afford us a competitive advantage compared to other producers in cost and access to sulfur
With facilities in both central Florida and Louisiana we are logistically well positioned to fulfill our material needs at very competitive prices Those multiple production points also afford us the flexibility to optimally balance supply and demand
Potash is a commodity available from several geographical regions around the world and consequently the market is highly competitive Through our participation in Canpotex we compete outside of North America against various independent and state owned potash producers Canpotex has substantial expertise and logistical resources for the international distribution of
potash including strategically located export assets in Portland Oregon St John New Brunswick and Vancouver British Columbia Our principal methods of competition with respect to the sale of potash include product pricing and offering consistent high quality products and superior service We believe that our potash cost structure is competitive in the industry and should improve as we continue to complete our potash expansion projects
The Mosaic Fertilizantes segment operates in a highly competitive market in Brazil We compete with a broad range of domestic and international producers including farmer cooperatives subsidiaries of larger companies and independent crop nutrient companies We believe that having a vertically integrated business internationally but also in Brazil provides us with a competitive advantage by allowing us to achieve economies of scale transportation and storage efficiencies and obtain market intelligence
Mosaic Fertilizantes has a wide variety of customers including farmers blenders and other local distributors We compete with local businesses that offer a wide variety of products that are available from many sources We believe the strategic location of our mines and chemical plants in close proximity to our customers and the benefit of our own distribution network gives us an advantage over most of our competitors The vertical integration of our wholly owned production along with our distribution network as well as our focus on product innovation and customer solutions position us with an advantage over many of our competitors We have a strong brand in Brazil In addition to having access to our own production our distribution activities have the capability to supply a wide variety of crop nutrients to our dealer and farmer customer base
Our results of operations historically have reflected the effects of several external factors which are beyond our control and have in the past produced significant downward and upward swings in operating results Revenues are highly dependent upon conditions in the agriculture industry and can be affected by among other factors crop conditions changes in agricultural production practices worldwide economic conditions including the increasing world population household incomes and demand for more protein rich food particularly in developing regions such as China India and Latin America changing demand for biofuels variability in commodity pricing governmental policies the level of inventories in the crop nutrient distribution channels customer expectations regarding farmer economics future crop nutrient prices and availability and transportation costs among other matters market trends in raw material costs market prices for crop nutrients and weather Furthermore our crop nutrients business is seasonal to the extent farmers and agricultural enterprises in the markets in which we compete purchase more crop nutrient products during the spring and fall The international scope of our business spanning the northern and southern hemispheres reduces to some extent the seasonal impact on our business The degree of seasonality of our business can change significantly from year to year due to conditions in the agricultural industry and other factors The seasonal nature of our businesses requires significant working capital for inventory in advance of the planting seasons
We sell products throughout the world Unfavorable changes in trade protection laws policies and measures government policies and other regulatory requirements affecting trade including the imposition of tariffs unexpected changes in tax and trade treaties and strengthening or weakening of foreign economies as well as political relations with the U S may cause sales trends to customers in one or more foreign countries to differ from sales trends in the U S
We had 13 765 employees as of December 31 2024 consisting of approximately 10 454 salaried and 3 311 hourly employees This includes approximately 720 salaried employees at the Miski Mayo Mine of which we own 75 and its results are consolidated within our results of operations
We had eight collective bargaining agreements with unions covering certain hourly employees in the U S and Canada Of these employees approximately 15 are covered under agreements that expire in 2025 All are expected to collectively bargain for new contracts in 2025
Failure to renew any of our union agreements could result in a strike or labor stoppage that could have a material adverse effect on our operations However we have not experienced a significant work stoppage in many years and historically have had good labor relations
pursuant to Section 13 a of the Securities Exchange Act of 1934 as amended and the rules and regulations thereunder are made available free of charge on our website www mosaicco com as soon as reasonably practicable after we electronically file such material with or furnish it to the SEC These reports are also available on the SEC s website www sec gov The information contained on our website and the SEC s website is not being incorporated in this report
Our employees are the foundation of our Company Our 13 765 colleagues embody Mosaic s core values of innovation collaboration drive and responsibility and are the key to enabling us to execute our mission to help the world grow the food it needs
Mosaic is committed to the well being and development of our employees by creating and cultivating an innovative and collaborative workplace that welcomes values and respects diversity of people thoughts and perspectives a workplace free of discrimination and intolerant of bias As part of Mosaic s strategic priorities we are committed to driving actions and behaviors both internally and within our communities that build Mosaic s brand as a respected and responsible company and to be an employer of choice for generations to come
Safety is a top priority and we strive for zero harm to people and zero environmental incidents Through the implementation of the Mosaic Management System we have established a structured approach to effectively manage and control risk for the safety and well being of our colleagues the environment and our stockholders The management system defines processes that help support a safe work environment and establish a continuous improvement cycle to adjust for changing conditions and identified risks
Extending beyond safety our wellness programs seek to improve the well being of our employees and their families in the areas of physical and psychological health and financial security These programs include health screenings insurance plans psychological health training and mental health resources as well as our Environmental Health and Safety
Mosaic believes in continually investing in people and their lifelong learning Mosaic holds training events throughout the year across all of our locations invests in leadership competencies through facilitated learning opportunities and hosts an online education platform through Workday Learning which all employees are encouraged to access for mandatory and self guided education Mosaic offers companywide educational reimbursement programs to help employees in each of our operating companies acquire new skills and capabilities to better meet their job responsibilities and provide for future career opportunities within the Company Mosaic supports membership in numerous professional associations and encourages participation in work related external networking groups
In 2024 Mosaic continued its programs to help employees gain the knowledge and skills that we believe will be necessary for the next evolution of our business through development programs for emerging leaders front line leaders mid level and senior leaders designed to support and address the needs at different career points Like any company Mosaic experiences turnover and the need to replace talent related to retirement and succession Mosaic seeks to minimize unwanted turnover through its talent review succession management performance management and compensation processes We seek to build our talent pipeline through targeted student programs We strive to design career paths through progressions that will enable our employees to grow and evolve their careers at Mosaic
Mosaic is a thoughtful and engaged neighbor who invests carefully and generously through long term partnerships with organizations that are making a difference We are proud to support organizations and initiatives that create growth and leave a lasting impact in our communities in three main focus areas food water and local community In 2023 we invested 16 7 million While the official 2024 investment data will be available in February 2025 preliminary data indicates continued strong support in these areas with investments of over 12 million In addition to philanthropic grants and sponsorships of local programs we also support and facilitate volunteerism by our employees Similarly we participate on local committees boards and associations focused on contributing to the vitality of the people and communities around us
that provides employees with flexibility to connect their personal causes to corporate giving matching and volunteerism opportunities The Program aligns to Mosaic s strategic priorities and our 2025 Environmental Social and Governance performance goals Employees can take advantage of Company matching funds through financial contributions volunteering on personal time or both In North America this can be up to 2 000 annually
In 2024 Mosaic continued to dedicate resources to identifying barriers to employment partnership and succession and creating more opportunities for our employees and our communities We continued to advance progress in creating a more innovative and engaged workforce through our executive led Employee Inclusion Networks
expanding community engagement and obtaining feedback and taking action on Mosaic s workplace and employee experience through the Voice of the Employee survey We continued to make progress towards our previously announced global 2030 representation goals and are driving accountability into the business units by implementing business level initiatives and programs to help foster a more inclusive workplace essential for fostering innovation and collaboration Ongoing education continues to be a cornerstone of Mosaic s journey to build and promote a more inclusive culture We enhanced leadership competencies by providing interactive education on enabling authentic connections becoming successful ambassadors for progress and continuing our online curated self directed learning platform to encourage employees to continue their own learning journeys We continue to focus and expand our recruitment efforts to build awareness and interest in our industry and to attract the best qualified candidates from a broad variety of sources
Pay equity is fundamental to our compensation philosophy and our commitment to our employees Mosaic annually evaluates pay equity and compensation practices to ensure fair and equitable treatment of employees based on our pay for performance framework In 2024 Mosaic continued to enhance ongoing internal analytical capabilities for continuous assessment of pay and performance equity and evolved our annual pay equity audit to bring more employees within scope across our global operations and to enhance our assessment of pay disparities The results of our internal audit revealed 4 outliers both men and women without adequate business justifications that will be addressed during our 2025 compensation cycle Pay equity will be reviewed internally every year with periodic external independent reviews
Further information on our human capital practices is available in our sustainability report Information contained in our sustainability report or on our website is not incorporated by reference into and does not constitute a part of this Form 10 K
Mr Bauer was promoted to Senior Vice President General Counsel and Corporate Secretary in January 2023 Since joining Mosaic in 2007 Mr Bauer has managed legal support for business development activities potash operations offshore finance commercial transactions and corporate governance Before assuming his current role Mr Bauer was the Vice President and Deputy General Counsel from October 2022 through December 2022 and immediately prior to that role he served as the Vice President Growth and Development on Mosaic s Strategy and Growth team from May 2019 to September 2022 Prior to Mosaic he was a partner at an international law firm where he focused his practice on mergers and acquisitions public and private securities offerings and public company compliance matters as well as general business advising
Mr Bodine was elected our Chief Executive Officer effective January 2024 and our President effective August 2023 He previously served as our Senior Vice President North America from April 2020 to August 2023 and as our Senior Vice President Phosphates from January 2019 to April 2020 during which time he also provided executive oversight for the corporate procurement organization Prior to that Mr Bodine served as Senior Vice President Potash from June 2016 to December 31 2018 as Vice President Potash from April to May 2016 as Vice President Supply Chain from August 2015 to March 2016 as Vice President Operations Business Development from October 2014 to August 2015 as Vice President Operations for our Esterhazy and Colonsay potash production facilities from July 2013 to October 2014 as the General Manager Esterhazy from September 2012 to June 2013 and as the General Manager Four Corners from March 2010 to August 2012 Before that Mr Bodine held various plant and mine development management positions in the Phosphates segment beginning with Mosaic s formation in 2004
Mr Precourt was elected our Senior Vice President and Chief Administrative Officer in November 2023 In this role Mr Precourt has responsibility for the Company s Human Resources Public Affairs Procurement and Shared Services teams He had previously served as our Senior Vice President Strategy and Growth since January 1 2019 From June 2016 through March 2020 he also provided executive oversight for the EHS organization He previously served as Senior Vice President Phosphates and provided executive oversight for the corporate procurement organization from June 2016 until January 1 2019 as Senior Vice President Potash Operations from May 2012 to June 2016 and before that he led the Environment Health and Safety organization since joining Mosaic in 2009 Prior to joining Mosaic Mr Precourt was employed by cement and mineral component producer Holcim U S where he initially led its safety transformation and later became Vice President of Environment and Government Affairs Mr Precourt started his career at The Dow Chemical Company where he served in a variety of roles in Operations Technology Capital Project Management and Environmental Health and Safety Mr Precourt served as a director and was the past Chairman of the Board of the Saskatchewan Potash Producers Association and was a director of Fertilizer Canada
Mr Siani Pires was elected as our Executive Vice President and Chief Financial Officer in January 2025 and previously elected as our Executive Vice President and Chief Financial Officer Designate in November 2024 Mr Siani Pires previously served on The Mosaic Company s Board of Directors from 2018 to 2022 Prior to joining Mosaic Mr Siani Pires served as Executive Vice President of Strategy and Business Development Chief Financial Officer and other strategic roles for Vale S A a global mining company He also served as the chairman of the Board of Directors of VLI S A as a senior business development advisor for the Natural Resources Group of Accenture and was a consultant at McKinsey and
Company and at various leadership roles in The Brazilian Development Bank in the areas of capital Markets export finance and infrastructure He serves on the board of Vallourec Societe Anonime has served as a member of the executive council of o9 solutions as a member of the advisory board at Barbosa Mello and as a board member of Suzano Papel e Celulose
Ms Swager was elected our Executive Vice President Operations in November 2023 In this role Ms Swager is responsible for the Company s enterprise wide operations including the Environment Health and Safety
organization and the North America Supply Chain organization Ms Swager had previously served as our Senior Vice President Supply Chain including executive oversite for the Procurement and corporate EHS teams since April 1 2020 From January 1 2019 until her appointment as Senior Vice President Supply Chain she served as Senior Vice President Potash Previously Ms Swager held leadership positions at Mosaic including Vice President Minerals Vice President Mining Operations and General Manager in our Phosphates business since joining Mosaic upon its formation in 2004 She also led the mine planning and strategy group for the Phosphates business Ms Swager serves as a director of MVM Resources International B V the general partner of Compañia Minera Miski Mayo S R L the joint venture that operates the mines in Peru and as a director of SSR Mining Inc a publicly traded company
Ms Wang was elected Executive Vice President Commercial in January 2024 after serving as the Company s Senior Vice President Global Strategic Marketing since May 2023 From January 2022 until May 2023 Ms Wang served as our Senior Vice President Global Strategic Marketing Head of China and India From October 15 2020 until her current appointment Ms Wang served as Vice President Global Strategic Marketing Prior to October 2020 Ms Wang served as Vice President Global Product Management and International Distribution and before May 2019 Ms Wang served as Country Head for China since joining Mosaic in 2011 Ms Wang serves on the Board of Directors of Canpotex Limited the Canadian potash marketing association
Our executive officers are generally elected to serve until their respective successors are elected and qualified or until their earlier death resignation or removal No family relationships as that term is defined in Item 401 d of Regulation S K exist among any of the listed officers or between any such officer and any member of our Board of Directors
Our operating results are highly dependent upon and fluctuate based upon business economic and other conditions and governmental policies affecting the agricultural industry in which we or our customers operate These factors are outside of our control and may significantly affect our profitability
governmental policies including farm and biofuel policies which may directly or indirectly influence the number of acres planted the level of inventories the mix of crops planted or crop prices or otherwise negatively affect our operating results
International market conditions and the effects of recent countervailing duty orders which are also outside of our control may also significantly influence our operating results The international market for crop nutrients is influenced by such factors as the relative value of the U S dollar and its impact upon the cost of importing crop nutrients foreign agricultural policies including subsidy policies the existence of or changes in import or foreign currency exchange barriers in certain foreign markets changes in the hard currency demands of certain countries and other regulatory policies of foreign governments as well as the laws and policies of the U S affecting foreign trade and investment including use of tariffs
orders on imports of phosphate fertilizers from Morocco and Russia in response to petitions filed by Mosaic The orders were based on DOC s determination that the imports are unfairly subsidized and the U S International Trade Commission s
imports materially injure the U S phosphate fertilizer industry The purpose of the CVD orders was to remedy the injury and thereby restore fair competition CVD orders normally stay in place for at least five years with possible extensions
Moroccan and Russian producers have initiated federal court actions seeking to overturn the orders Mosaic has also made claims contesting certain aspects of DOC s final determinations that we believe failed to capture the full extent of Moroccan and Russian subsidies These litigation challenges remain underway as further described in this Item 3 of Form 10 K
The applicable final CVD assessment rates and cash deposit rates for imports of phosphate fertilizer from Morocco and Russia could change as a result of these various proceedings and potential associated appeals whether in federal courts or at the World Trade Organization A reversal of or change in the ITC s or DOC s prior determination in the CVD investigations could have an adverse effect on our business financial condition or operating results
In February 2025 the U S imposed a 25 tariff on most imports from Canada including potash crop nutrients Although the implementation of these tariffs has been temporarily paused for 30 days there is a risk that they may be reinstated and sustained for an extended period If these tariffs are reintroduced they could significantly increase the cost of importing potash from Canada Higher potash prices may lead to reduced usage by U S farmers and negatively impact demand Additionally retaliatory tariffs imposed by Canada on U S exports could further exacerbate these challenges The prolonged imposition of these tariffs could have a material adverse effect on our business financial condition and results of operations
Pandemics epidemics or other health outbreaks have and could again adversely affect the global economy and have and could again significantly disrupt our operations key suppliers or third party logistics providers customers and ultimate end users These disruptions could arise due to the spread of the outbreak and or from measures to contain or mitigate it such as quarantines and extended closures of businesses mandated by government authorities For example the Covid 19 pandemic adversely affected our businesses in multiple ways including by creating short term labor shortages due to illness and transportation issues such as trucking delays and port congestion which slowed delivery of inputs to our facilities and products to our end customers
The full impact of another public health event depends on various factors any of which could materially increase our costs negatively impact our revenue and or adversely impact our results of operations and liquidity possibly to a significant degree A public health event could also have the effect of heightening many of the other risks described in this Item 1A of this Form 10 K
Economic and market conditions including inflation supply chain challenges high interest rates and foreign exchange volatility have and may continue to have an impact on our business Our production costs have increased due to higher prices for raw materials including purchased nitrogen sulfur and ammonia as well as supply chain challenges including increased costs and delays caused by transportation and labor shortages These adverse economic events have adversely affected and may continue to adversely affect our operating results
Our crop nutrient business is seasonal and varies based on application rates which may result in carrying significant amounts of inventory and seasonal variations in working capital and our inability to predict future seasonal crop nutrient demand accurately may result in excess inventory or product shortages
The use of crop nutrients is seasonal and varies based on application rates Farmers tend to apply crop nutrients during two short application periods the strongest one in the spring before planting and the other in the fall after harvest As a result the strongest demand for our products typically occurs during the spring planting season with a second period of strong demand following the fall harvest In contrast we generally produce our products throughout the year As a result we and our customers generally build inventories during the low demand periods of the year in order to provide timely product availability during the peak sales seasons The seasonality of crop nutrient demand results in our sales volumes and net sales
typically being the highest during the North American spring season and our working capital requirements typically being the highest just prior to the start of the spring season Our quarterly financial results can vary significantly from one year to the next due to weather related shifts in planting schedules and purchasing patterns
If seasonal demand exceeds our projections we will not have enough product which would negatively impact our profitability If seasonal demand is less than we expect we will have excess inventory and higher working capital and liquidity requirements The degree of seasonality of our business can change significantly from year to year due to conditions in the agricultural industry and other factors
Delivery costs are a significant factor in the total cost to customers As a result changes in transportation costs or in customer expectations about them may adversely affect our sales volumes and prices
A disruption at our production distribution or terminaling facilities could have a material adverse impact on our business The risk of material disruption increases when demand for our products results in high operating rates at our facilities
We conduct our operations through a limited number of key production distribution and terminaling facilities These facilities include our phosphate mines and concentrates plants our potash mines and the ports and other distribution facilities through which we Canpotex and the other joint ventures in which we participate conduct our respective businesses as well as other commercial arrangements with unrelated third parties Any disruption of operations at any of these facilities may significantly negatively affect our production or our ability to distribute our products
Examples of the types of events that could result and have in the past resulted in a disruption at these facilities include adverse weather strikes or other work stoppages civil unrest deliberate malicious acts including acts of terrorism and armed conflict political or economic instability cyberattacks changes in permitting financial assurance or certain environmental health and safety laws or other changes in the regulatory environment in which we operate legal and regulatory proceedings our relationships with the other member of Canpotex and the other joint ventures in which we participate and their or our exit from participation in such joint ventures other changes in our commercial arrangements with unrelated third parties brine inflows at our Esterhazy Saskatchewan mine or our other shaft mines mechanical failure and accidents or other failures occurring in the course of operating activities including at our gypstacks clay settling areas and tailing dams accidents occurring in the course of operating activities lack of truck rail barge or ship transportation and other factors
Reduced oil refinery operating rates in the U S and Canada could and have in the past resulted in decreased availability of molten sulfur which could increase costs of sulfur procurement or decrease availability of sulfur needed in our phosphate fertilizer production operations If it becomes necessary to procure sulfur at higher costs and if we are unable to pass those costs on in our product prices or if we are unable to procure sulfur at volumes necessary for our operations such events could have a material adverse effect on our phosphate business and or our financial condition or operating results
Key inputs for the production of our finished goods including fertilizer sulfur and ammonia and energy used in our businesses in the past have been and may in the future be the subject of volatile pricing and availability Changes in the price or availability of these key inputs for production of finished goods have had and could again have a material adverse impact on our businesses
Fertilizer is a key input for production of our blended finished goods products Natural gas ammonia and sulfur are key raw materials used in the manufacture of phosphate crop nutrient products Natural gas is used as both a chemical feedstock and a fuel to produce anhydrous ammonia which is a raw material used in the production of concentrated phosphate products Natural gas is also a significant energy source used in the potash solution mining process From time to time our profitability has been and may in the future be adversely impacted by the price and availability of these key inputs and other energy costs For example the ongoing conflict between Russia and Ukraine and the related sanctions have led and may continue to lead to disruption and instability in global markets supply chains and volatile pricing and availability of these key inputs and raw materials Because most of our products are commodities there can be no assurance that we will be able to pass through increased costs to our customers A significant increase in the price of fertilizer natural gas ammonia sulfur or energy costs
We are subject to risks associated with our international sales and operations which could negatively affect our sales to customers in foreign countries as well as our operations and assets in foreign countries Some of these factors may also make it less attractive to distribute cash generated by our operations outside the U S to our stockholders or to utilize cash generated by our operations in one country to fund our operations or repayments of indebtedness in another country or to support other corporate purposes
In 2024 we derived approximately 64 of our net sales from customers located outside of the U S As a result we are subject to numerous risks and uncertainties relating to international sales and operations including
political and economic instability inflation and adverse economic conditions resulting from governmental attempts to reduce inflation such as imposition of higher interest rates and wage and price controls
the imposition of tariffs exchange controls trade barriers or other restrictions or government imposed increases in the cost of resources and materials necessary for the conduct of our operations or the completion of strategic initiatives including with respect to our joint ventures and
The occurrence of any of the above in the countries in which we operate or elsewhere could jeopardize or affect our ability to transact business there and could adversely affect our revenues and operating results and the value of our assets located outside of the U S
We are a global business with substantial assets located outside of North America Our operations in Brazil China India and Paraguay are fundamental to our business We have a majority interest in the joint venture entity operating the Miski Mayo Mine that supplies phosphate rock to us Volatile economic market and political conditions may have a negative impact on our operations operating results and financial condition In addition unfavorable changes in trade protection laws policies and measures or governmental actions and policies and other regulatory requirements affecting trade and the pricing and sourcing of our raw materials may also have a negative impact on our operations operating results and financial condition
Natural resource extraction is an important part of the economy in Peru and in the past there have been protests against other natural resource operations in Peru There remain numerous social conflicts that exist within the natural resource extraction sector in Peru and there is potential for active protests against natural resource extraction companies If the Government of Peru s proactive efforts to address the social and environmental issues surrounding natural resource activities are not successful protests could extend to or impact the Miski Mayo Mine and adversely affect our interest in the Miski Mayo joint venture or the supply of phosphate rock to us from the mine
Adverse weather conditions including hurricanes and excess heat cold snow rainfall and drought have in the past and may in the future adversely affect our operations and result in increased costs decreased sales or production and potential liabilities
Adverse weather conditions have in the past and may in the future adversely affect our operations particularly our Phosphates operations In the past hurricanes have resulted in physical damage to our facilities in Florida and Louisiana
Additionally water treatment costs tend to increase significantly following excess rainfall Some of our Florida and Louisiana facilities have had and others could have high water levels that have required or may require treatment High water balances in the past at phosphate facilities in Florida also led the Florida Department of Environmental Protection
to adopt rules requiring phosphate production facilities to meet more stringent process water management objectives for phosphogypsum stack systems In addition to the FDEP the U S Environmental Protection Agency
If adverse weather conditions occur in coming years our facilities may be required to take additional measures to manage process water to comply with existing or future requirements and these measures could potentially have a material effect on our business and financial condition
Adverse weather conditions may also cause a loss of production and may disrupt our supply chain or adversely affect delivery of our products to our customers For example oil refineries that supply sulfur to us may suspend operations as a result of a hurricane and incoming shipments of ammonia can be delayed disrupting production at our Florida or Louisiana facilities and delivery of our products In 2021 we experienced production impacts related to Hurricane Ida at our Louisiana operations We also experienced down time and delayed shipments caused by impacts from Hurricane Ian which occurred in 2022 In 2024 we experienced production and distribution impacts related to Hurricanes Francine Helene and Milton
Excess rainfall and drought have in the past and may in the future adversely affect us For example in 2019 we experienced the wettest year in North America in nearly 50 years which reduced fertilizer applications by farmers Excess rainfall also resulted in higher river levels which adversely affected delivery of our products Drought can reduce farmers crop yields and the uptake of phosphate and potash reducing the need for application of additional phosphate and potash for the next planting season Drought can also lower river levels adversely affecting delivery of our products to our customers For example the Mississippi River was in drought condition for parts of 2022 and 2023 affecting barge movement on the river
The impacts of climate change on our operations and those of our customers remains uncertain The impacts of climate change could include changes in rainfall patterns water shortages changing sea levels changing storm patterns and intensities and changing temperature levels and these changes could be severe These impacts could vary by geographic location Severe climate change could impact our costs and operating activities the location and cost of global grain and oilseed production and the supply and demand for grains and oilseeds A number of our sites are located in areas that are exposed to weather events and have been adversely impacted by hurricanes and excessive rainfall as described elsewhere in these risk factors To the extent climate change exacerbates these weather events our operations could experience increased costs and disruptions to our business which could be material At the present time we cannot predict the prospective impacts of climate change on our results of operations liquidity or capital resources or whether any such effects could be material to us
We do not own a controlling equity interest in our non consolidated companies some of which are foreign companies and therefore our operating results and cash flow may be materially affected by how the governing boards and majority owners operate such businesses There may also be limitations on monetary distributions from these companies that are outside of our control Together these factors may lower our equity earnings or cash flow from such businesses and negatively impact our results of operations
We hold minority ownership interests in other companies that are not controlled by us The operations and results of Ma aden and some other companies are significant to us and their operations can affect earnings Because we do not control these companies either at the board or stockholder levels and because local laws in foreign jurisdictions and contractual obligations may place restrictions on monetary distributions by these companies we cannot ensure that these companies will operate efficiently pay dividends or generally follow the desires of our management by virtue of our board or stockholder representation As a result these companies may contribute less than anticipated to our earnings and cash flow negatively impacting our results of operations and liquidity
Our financial performance is dependent on a reliable and productive work force A significant portion of our work force and that of the joint ventures in which we participate is covered by collective bargaining agreements with unions Unsuccessful contract negotiations or adverse labor relations could result in strikes or slowdowns Any disruption may decrease our production and sales or impose additional costs to resolve disputes The risk of adverse labor relations may increase as our profitability increases because labor unions expectations and demands generally rise at those times
Over the past century several potash mines experiencing water inflow problems have flooded Since December 1985 we have had inflows of brine water into our Esterhazy Saskatchewan K1 and K2 potash mines Due to an acceleration of brine inflows on June 4 2021 the Company announced a closure of our K1 and K2 potash mine shafts Our potash mines at Colonsay Saskatchewan Carlsbad New Mexico and our Esterhazy Saskatchewan K3 mine though not contiguous with the K1 K2 underground inflow region are also subject to risks from inflow Though minor inflows are regularly managed it is possible that significant water inflows could occur which may present risks to our employees and our operations and which may require us to incur brine management costs change our mining processes or abandon our operating mines
See Key Factors that can Affect Results of Operations and Financial Condition and Potash Net Sales and Gross Margin sections of our Management s Analysis in this Form 10 K and the Esterhazy closure costs in Note 26 of this Form 10 K which sections are incorporated herein by reference for a discussion of costs risks and other information relating to the brine inflows
Accidents or equipment failures occurring in the course of our operating activities could result in significant liabilities interruptions or shutdowns of facilities or the need for significant safety or other expenditures
We engage in mining and industrial activities including rail transportation that can result in serious accidents or experience equipment failures If our procedures are not effective or if an accident or equipment failure were to occur we could be subject to liabilities arising out of property damage personal injuries or death our operations could be interrupted and we might have to shut down or abandon affected facilities Accidents could cause us to expend significant amounts to remediate safety issues or to repair damaged facilities and could result in significant liabilities and or impact on the financial performance of the Company including material adverse effects on our results of operations liquidity or financial condition For example
The excavation of mines in some parts of the world can result in potential seismic events or can increase the likelihood or potential severity of a seismic event Our Esterhazy mine and Louisiana facilities have experienced minor seismic events from time to time A significant seismic event at one our facilities or mines could result in serious injuries or death or damage to or flooding of operations or damage to adjoining properties or facilities of unrelated third parties Geologic features may affect the integrity of our impoundments particularly in central Florida Our efforts to deploy new technologies to identify and repair features to mitigate impacts and risk may not be successful adversely impacting our operations or could cause us to incur significant costs
Our underground potash shaft mines are subject to risk from fire In addition fire at one of our underground shaft mines could halt our operations at the affected mine or for longer periods for remedial work or otherwise
We produce ammonia at our Faustina Louisiana phosphate concentrates plant use ammonia in significant quantities at all of our Florida and Louisiana phosphates concentrates plants and store ammonia at some of our distribution facilities In Florida ammonia is received at terminals in Tampa and transported by pipelines and trucks to our facilities We also use ammonia in our Brazil phosphate operations Our ammonia is generally stored and transported at high pressures or cryogenically Accidents at any of our ammonia facilities could result in serious injury or death and could adversely impact our operations
We also use or produce other hazardous chemicals at some of our facilities If our safety procedures are not effective an accident involving these other hazardous chemicals could result in serious injuries or death or result in the shutdown of our facilities
We use sulfuric acid to produce concentrated phosphate in our Florida and Louisiana operations and our Brazil operations We also use or produce other hazardous chemicals at some of our facilities An accident involving any of these chemicals could result in serious injuries or death or evacuation of areas near an accident An accident could also result in property damage or shutdown of our facilities or cause us to expend significant amounts to remediate safety issues or to repair damaged facilities
We depend on information systems to among other things manage our inventory process transactions operate our websites purchase and ship goods on a timely basis and maintain cost effective operations We have invested significant capital associated with the implementation and integration of our information technology systems across our businesses This process involves the replacement and consolidation of technology platforms resulting in operational efficiencies and reduced costs Our inability to effectively implement or convert our operations to the new systems could cause delays in product fulfillment and reduced efficiency in our operations and could have a material impact on our financial condition or operating results
in countries in which we operate These EHS laws govern a wide range of matters including environmental controls land reclamation discharges to air and water remediation of hazardous substance releases and in some cases demonstration of financial assurance They significantly affect our operating activities as well as the level of our operating costs and capital expenditures In some jurisdictions environmental laws change frequently and it may be challenging for us to achieve and maintain compliance with all material environmental laws at all times If we are not in compliance we may be subject to enforcement or third party claims and may require new investment in our business In those circumstances our financial condition and results of operations may be materially adversely affected
imposes liability including for cleanup costs without regard to fault or to the legality of a party s conduct on certain categories of persons including current and former owners and operators of a site and parties who are considered to have contributed to the release of hazardous substances into the environment Under CERCLA or various U S state analogues a party may under certain circumstances be required to bear more than its proportional share of cleanup costs at a site where it has liability if payments cannot be obtained from other responsible parties We periodically have incurred and may incur liabilities and cleanup costs under CERCLA and other environmental laws with regard to our current or former facilities adjacent or nearby third party facilities or offsite disposal locations
Our operations are dependent on having the required permits and approvals from governmental authorities Denial or delay by a government agency in issuing any of our permits and approvals or imposition of restrictive conditions on us with respect to these permits and approvals may impair our business and operations
Our operations including our mines are dependent on having the required permits and approvals from governmental authorities Denial or delay by a government agency in issuing modifying or renewing any of our permits and approvals or imposition of restrictive or cost prohibitive conditions on us with respect to these permits and approvals may impair our business and operations and could have a material adverse effect on our business financial condition or results of operations For example in Florida local community involvement has become an increasingly important factor in the permitting process for mining companies and various counties and other parties in Florida have in the past filed and continue to file lawsuits challenging the issuance or renewal of some of the permits we require A recent federal court decision invalidated Florida s Clean Water Act 404 dredge and fill permitting program and returned that permitting authority to the federal agencies
We have in the past been are currently and in the future may be subject to legal and regulatory proceedings that could be material to our business results of operations liquidity or financial condition Joint ventures in which we participate could also become subject to these sorts of proceedings These proceedings may be brought by the government or private parties and may arise out of a variety of matters including
Allegations that we have violated environmental health and safety laws and regulations or that we are responsible for adversely affecting nearby properties We are currently involved in proceedings alleging that or to review whether we have violated environmental laws in the U S and Brazil
The legal and regulatory proceedings to which we are currently or may in the future be subject may depending on the circumstances result in monetary damage awards fines penalties other liabilities injunctions or other court or administrative rulings that interrupt impede or otherwise materially affect our business operations or criminal sanctions
We have included additional information with respect to pending legal and regulatory proceedings in Note 23 of our Notes to Consolidated Financial Statements and in this Form 10 K in Part I Item 3 Legal Proceedings
Environmental health and safety and food and crop laws and regulations to which we are subject may become more stringent over time This could increase the effects on us of these laws and regulations and the increased effects could be materially adverse to our business operations liquidity and or results of operations
Heightened regulation on food and crop inputs including crop nutrients and environmental health and safety issues in countries in which we operate can be expected to result in requirements that apply to us and our operations that may be more stringent than those described elsewhere in this report These requirements may include
Increased levels of future investments and expenditures for environmental controls at ongoing operations which will be charged against income from future operations increased levels of the financial assurance requirements to which we are subject and increased efforts or costs to obtain permits or denial of permits
New or interpretations of existing statutes or regulations that impose new or more stringent standards restrictions or liabilities related to elevated levels of naturally occurring radiation that arise on formerly mined land and other matters that could increase our expenses capital requirements or liabilities or adversely affect our business liquidity or financial condition
In general they require governmental agencies to evaluate projects for disproportionate impacts to disadvantaged or already burdened communities If such conditions are found they might result in a permit denial or restrictive or cost prohibitive conditions imposed on our operations and may impair our business and operations and could have a material adverse effect on our business financial condition or results of operations
We are subject to financial assurance requirements as part of our routine business operations If we were unable to satisfy financial assurance requirements we might not be able to obtain or maintain permits we need to operate our business as we have in the past In addition our compliance with these requirements could materially affect our business results of operations or financial condition
In many cases as a condition to obtaining or maintaining permits and approvals or otherwise we are required to comply with financial assurance requirements of governmental authorities The purpose of these requirements is to provide comfort to the government that sufficient funds will be available for the ultimate closure post closure care or reclamation of our facilities
In some cases we comply through the satisfaction of applicable state financial strength tests but if we are unable to do so we must utilize alternative methods of complying with these requirements if we do not we would be prevented from continuing our operations and also could be subject to enforcement proceedings brought by relevant government agencies Alternative compliance methods include providing credit support in the form of cash escrows or trusts surety bonds from surety or insurance companies letters of credit from banks or other forms of financial instruments or collateral to satisfy the financial assurance requirements Use of alternative means of financial assurance imposes additional expense on us and could affect our liquidity
Various governmental initiatives to limit greenhouse gas emissions are under way or under consideration around the world These initiatives could restrict our operating activities require us to make changes in our operating activities that would increase our operating costs reduce our efficiency or limit our output require us to make capital improvements to our facilities increase our energy raw material and transportation costs or limit their availability or otherwise adversely affect our results of operations liquidity or capital resources and these effects could be material to us
The Paris Agreement which was signed by nearly 200 nations including the U S and Canada entered into force in late 2016 and sets out a goal of limiting the average rise in temperatures for this century to below 2 degrees Celsius Each signatory is expected to develop its own plan referred to as a Nationally Determined Contribution or
Various legislative or regulatory initiatives relating to greenhouse gases have been adopted or considered by the U S Congress the EPA or various states and those initiatives already adopted may be used to implement a U S NDC Additionally in the future more stringent laws and regulations may be enacted to accomplish the goals set out in the NDC
Brazil ratified the Paris Agreement in September 2016 committing to an NDC that includes economy wide greenhouse gas reduction targets by 2030 The NDC further commits to achieving climate neutrality in 2060 Complete details surrounding Brazil s plan for achieving the greenhouse gas emissions reductions and climate neutrality are uncertain The government of Brazil may intervene with new or different policy instruments to meet the goals set out in the 2020 NDC
Canada s intended NDC aims to achieve significant greenhouse gas emissions reductions The Canadian federal government has also introduced legislation establishing a long term target of net zero greenhouse gas emissions by 2050 More stringent laws and regulations may be enacted to accomplish the goals set out in Canada s NDC and Canada s own long term emissions reduction targets
In March 2024 the SEC issued final rules on climate related disclosures that if adopted will require disclosure of extensive detailed climate related information The future of the SEC climate related disclosure rule is uncertain as it was immediately challenged in litigation and implementation has been stayed pending the legal challenges Most recently the SEC issued a statement halting the defense of the climate related disclosures until the Commission decides whether to continue defending it The Company is monitoring the SEC s climate related disclosure rules and recently enacted standards in the European Union and California on climate change disclosure and is taking necessary steps to plan for the anticipated or adopted disclosure requirements It is possible that such legislation and other future legislation or regulation addressing climate change including the Paris Agreement or any new international agreements could adversely affect our operating activities energy raw material and transportation costs results of operations liquidity or capital resources and these effects could be material or adversely impact our competitive advantage In addition to the extent climate change restrictions imposed in countries where our competitors operate such as India China Russia Belarus or Morocco are less stringent than in the U S Canada or Brazil our competitors could gain cost or other competitive advantages over us
We use tailings sediments and water dams and other impoundments to manage residual materials generated by our facilities including Brazilian mining operations If our safety procedures are not effective an accident involving these
impoundments could result in serious injuries or death damage to property or the environment or result in the shutdown of our facilities any of which could materially adversely affect our results of operations
Mining and processing of potash and phosphate generate residual materials that must be managed both during the operation of the facility and upon facility closure Potash tailings consisting primarily of salt and clay are stored in surface disposal sites Phosphate residuals from mining or processing are deposited in tailings dams or clay settling areas and phosphogypsum stacks Mosaic manages its structures in accordance with all legal requirements and is implementing actions to be aligned with the major principles from the Global Industry Standard on Tailings Management GISTM established in 2020 by the ICMM International Council of Metals and Mining the UN environment program and the PRI Principles of responsible investment
impoundments at any of our operations could cause severe property and environmental damage and loss of life could result in the shut down or idling of our facilities and could have a material adverse effect on our results of operations
We cannot predict the full impact of these rules or potentially related judicial actions or future actions or whether or how it would affect our Brazilian operations or customers Any accident involving our tailings or other dams or any shut down or idling of our related mines could have a material adverse effect on our results of operations
Most of our products are readily available from a number of competitors and price and other competition in the crop nutrient industry is intense In addition crop nutrient production facilities and distribution activities frequently benefit from economies of scale As a result particularly during pronounced cyclical troughs the crop nutrient industry has a long history of consolidation Mosaic itself is the result of a number of industry consolidations We expect consolidation among crop nutrient producers to continue Our competitive position could suffer to the extent we are not able to expand our own resources either through consolidations acquisitions joint ventures or partnerships In the future we may not be able to find suitable companies to combine with assets to purchase or joint venture or partnership opportunities to pursue Even if we are able to locate desirable opportunities we may not be able to enter into transactions on economically acceptable terms If we do not successfully participate in continuing industry consolidation our ability to compete successfully could be adversely affected and result in the loss of customers or an uncompetitive cost structure which could adversely affect our sales and profitability
Our businesses are affected by fluctuations in market prices for our products the purchase price of key inputs to operations freight and shipping costs foreign currency exchange rates and interest rates We periodically enter into derivatives and forward purchase contracts to mitigate some of these risks However our strategy may not be successful in minimizing our exposure to these fluctuations See Market Risk in our Management s Analysis and Note 15 of our Notes to Consolidated Financial Statements which sections are incorporated herein by reference
A shortage or unavailability of trucks railcars tugs barges and ships for carrying our products and the raw materials we use in our business could result in customer dissatisfaction loss of production or sales and higher transportation or equipment costs
We rely heavily upon truck rail tug barge and ocean freight transportation to obtain raw materials needed at our mines and concentrates facilities and to deliver our products to our customers In addition the cost of transportation is an important part of the final sale price of our products Finding affordable and dependable transportation is important in obtaining our raw materials and to supply our customers Higher costs for these transportation services or an interruption or slowdown due to factors including high demand high fuel prices labor disputes layoffs or other factors affecting the availability of qualified transportation workers adverse weather or other environmental events or changes to rail barge or ocean freight systems could negatively affect our ability to produce our products or deliver them to our customers which could affect our performance and results of operations
Strong demand for grain and other products and a strong world economy increases the demand for and reduces the availability of transportation both domestically and internationally Shortages of railcars barges and ocean transport for carrying product and increased transit time may result in customer dissatisfaction loss of sales and higher equipment and
transportation costs In addition during periods when the shipping industry has a shortage of ships the substantial time needed to build new ships prevents rapid market response Delays and missed shipments due to transportation shortages including vessels barges railcars and trucks could result in customer dissatisfaction or loss of sales potential which could negatively affect our performance and results of operations
Our continued success depends on the collective abilities and efforts of our employees We compete for a talented workforce with other businesses particularly within the mining and chemicals industries in general and the crop nutrients industry in particular Our expansion plans are highly dependent on our ability to attract retain and train highly qualified and motivated employees who are essential to the success of our ongoing operations as well as to our expansion plans If we were to be unsuccessful in attracting retaining and training the employees we require our ongoing operations and expansion plans could be materially and adversely affected
Changes in competitors production or shifts in their marketing focus have in the past significantly affected both the prices at which we sell our products and the volumes that we sell and are likely to continue to do so in the future Increases in the global supply of DAP MAP and MOP or competitors increased sales into regions in which we have significant sales could adversely affect our prices and volumes
Competitors and new entrants in the markets for both concentrated phosphate crop nutrients and potash have in recent years expanded capacity or begun or announced plans to expand capacity or build new facilities The extent to which current global or local economic and financial conditions changes in global or local economic and financial conditions or other factors may cause delays or cancellation of some of these ongoing or planned projects or result in the acceleration of existing or new projects is unclear In addition certain of our products sold to China may be subject to additional tariffs due to ongoing trade tensions between China and the U S The level of exports by Chinese producers of concentrated phosphate crop nutrients depends to a significant extent on Chinese government actions to curb exports through among other measures prohibitive export taxes at times when the government believes it desirable to assure ample domestic supplies of concentrated phosphate crop nutrients to stimulate grain and oilseed production
ndependently expand its potash production capacity at a time when each Canpotex member s respective shares of Canpotex sales is based upon that member s respective proven peaking capacity for producing potash When a Canpotex member expands its production capacity the new capacity is added to that member s proven peaking capacity based on a proving run at the maximum production level Alternatively Canpotex members may elect to rely on an independent engineering firm and approved protocols to calculate their proven peaking capacity Antitrust and competition laws prohibit the members of Canpotex from coordinating their production decisions including the timing of their respective proving runs Worldwide potash production levels could exceed then current market demand resulting in an oversupply of potash and lower potash prices
Some of our competitors and potential competitors have greater resources than we do which may place us at a competitive disadvantage and adversely affect our sales and profitability These competitors include state owned and government subsidized entities in other countries
We compete with a number of producers throughout the world including state owned and government subsidized entities Some have greater total resources than we do and may be less dependent on earnings from crop nutrients sales than we are In addition some of these entities have access to lower cost or government subsidized natural gas supplies mining rights and reserves financing transportation and tax incentives placing us at a competitive disadvantage Furthermore certain governments as owners of some of our competitors may be willing to accept lower prices and profitability on their products in order to support domestic employment or other political or social goals To the extent other producers of crop nutrients
Future product or technological innovations by third parties such as the development of seeds that require less crop nutrients the development of substitutes for our products or developments in the application of crop nutrients if they occur could have the potential to adversely affect the demand for our products and our results of operations liquidity and capital resources
We have significant ongoing strategic initiatives They involve capital and other expenditures and require effective project management and in the case of potential strategic acquisitions successful integration To the extent the processes we or for our joint venture we together with our joint venture partners put in place to manage these initiatives or integrate and grow acquired businesses are not effective our capital expenditure and other costs may exceed our expectations or the benefits we expect from these initiatives might not be fully realized or both thereby resulting in adverse effects on our operating results and financial condition
We utilize and rely upon information technology systems in many aspects of our business including internal and external communications and the management of our accounting financial production and supply chain functions As we become more dependent on information technologies to conduct our operations and as the number and sophistication of cyberattacks increase the risks associated with cybersecurity increase These risks apply to us our employees and to third parties on whose systems we rely to conduct our business To our knowledge we have not experienced any material cybersecurity incidents of our technology systems Failure to effectively anticipate prevent detect and recover from the increasing number and sophistication of cyberattacks could result in theft loss or misuse of or damage or modification of our information and cause disruptions or delays in our business reputational damage and third party claims which could have a material adverse effect on our results of operations or financial condition
Historically the market for crop nutrients has been cyclical and prices and demand for our products have fluctuated significantly Periods of high demand increasing profits and high capacity utilization tend to lead to new plant investment and increased production in the industry This growth increases supply until the market is over saturated leading to declining prices and declining capacity utilization until the cycle repeats
As a result crop nutrient prices and volumes have been and are expected to continue to be volatile This volatility may cause our results of operations to fluctuate and potentially deteriorate The price at which we sell our crop nutrient products and our sales volumes could fall in the event of industry oversupply conditions which could have a material adverse effect on our business financial condition and results of operations In contrast high prices may lead our customers and farmers to delay purchasing decisions in anticipation of future lower prices thus impacting our sales volumes
Due to reduced market demand depressed agricultural economic conditions and other factors we have at various times suspended or curtailed production at some of our facilities The extent to which we utilize available capacity at our facilities will cause fluctuations in our results of operations as we will incur costs for any temporary or indefinite shutdowns of our facilities In addition lower sales tend to lead to higher fixed costs as a percentage of sales
We carry our inventories at the lower of cost or market In periods when the market prices for our products are falling rapidly including in response to falling market prices for raw materials it is possible that we could be required to write down the value of our inventories if market prices fall below our costs Any such write down could adversely affect our results of operations and the value of our assets Any such effect could be material
Our estimates of future selling prices reflect in part the purchase commitments we have from our customers As a result defaults on these existing purchase commitments because of the global or local economic and financial conditions or for other reasons could adversely affect our estimates of future selling prices and require additional inventory write downs
we review goodwill for impairment on an annual basis or more frequently if events or circumstances indicate that their carrying value may not be recoverable Other long lived assets including property plant and equipment are reviewed if events or circumstances indicate that their carrying value may not be recoverable The process of impairment testing involves a number of judgments and estimates made by management including the fair values of assets and liabilities future cash flows our interpretation of current economic indicators and market conditions overall economic conditions and our strategic operational plans with regard to our business units If the judgments and estimates used in our analysis are not realized or change due to external factors then actual results may not be consistent with these judgments and estimates and our goodwill and intangible assets may become impaired in future periods If our goodwill or long lived assets are determined to be impaired in the future we may be required to record non cash charges to earnings during the period in which the impairment is determined which could be significant and have an adverse effect on our financial condition and results of operations We have in the past and may in the future be required to write down the value of our goodwill or other long lived assets and such future write downs could be material
We are subject to taxes including income taxes resource taxes and royalties and non income based taxes in countries where we operate Changes in tax laws or regulations or their interpretation could result in higher taxes which could materially adversely affect our operating results and financial condition
We are subject to periodic audits by various tax authorities in all countries where we have meaningful operations The due process audit and appeal practices and procedures of such authorities may vary significantly by jurisdiction may be unpredictable and unreliable in nature and may result in significant risk to us For various reasons some governments may issue significant reassessments on audit based positions not fully grounded in law or fact even though upon disputing the reassessments a great many are overturned on administrative appeal and through the court system Certain systems involve tax litigation as a common practice In certain countries there are requirements to pay a reassessment even though the matter has not been finally decided by the tax administration or a court of law while the taxpayer has a well supported objection and appeals administratively or in court This may result in tying up significant funds and or creating adverse treasury and credit risks that may interrupt impede or otherwise materially affect our business operations
We extend trade credit to our customers and guarantee the financing that some of our customers use to purchase our products Our results of operations may be adversely affected if these customers are unable to repay the trade credit from us or financing from their banks Increases in prices for crop nutrient other agricultural inputs and grain may increase this risk
We extend trade credit to our customers throughout the world in some cases for extended periods of time In Brazil where there are fewer third party financing sources available to farmers we also have several programs under which we guarantee customers financing from financial institutions that they use to purchase our products As our exposure to longer trade credit extends throughout the world and use of guarantees in Brazil increases we are increasingly exposed to the risk that some of our customers will not pay us or the amounts we have guaranteed Additionally we become increasingly exposed to risk due to weather and crop growing conditions fluctuations in crop nutrient prices commodity prices or foreign currencies and other factors that influence the price supply and demand for agricultural commodities Significant defaults by our customers could adversely affect our financial condition and results of operations
Our primary foreign currency exposures are the Canadian dollar and Brazilian real The functional currency for our Brazilian subsidiaries is the Brazilian real However we finance our Brazilian inventory purchases with U S dollar denominated liabilities The functional currency of several of our Canadian entities is the Canadian dollar For those entities sales are primarily denominated in U S dollars but the costs are paid principally in Canadian dollars Canadian entities have significant U S dollar denominated intercompany loans and U S entities with the U S dollar as functional currency have Brazilian real denominated loans During periods of local or global economic crises local currencies may be devalued significantly against the U S dollar During times of a strengthening dollar our net earnings can be reduced due to transaction currency losses arising from these exposures of U S dollar denominated liabilities held in the Brazilian and Canadian entities and Brazilian real denominated assets held in U S entities To reduce economic risk and volatility on expected cash flows that are denominated in the Canadian dollar and Brazilian real we use financial instruments that may include forward contracts options or collars when unable to naturally offset the exposures
As a global company we utilize and rely upon information technology systems in many aspects of our business including internal and external communications and the management of our accounting financial production and supply chain functions As we become more dependent on information technologies to conduct our operations and as the number and sophistication of cyberattacks increase the risks associated with cybersecurity increase Failure to effectively anticipate prevent detect and recover from the increasing number and sophistication of cyberattacks could have a material adverse effect on our results of operations or financial condition To our knowledge we have not experienced any material cybersecurity incidents of our technology systems
Mosaic s cybersecurity program is comprised of people processes and technology that are designed to adequately protect the confidentiality integrity and availability of information technology systems and data Mosaic has strategically integrated cybersecurity risk management into our broader risk management framework to promote a company wide culture of cybersecurity risk awareness This integration ensures that cybersecurity considerations are an integral part of our decision making processes at every level We have a Governance Risk and Compliance team which is a dedicated team within the cybersecurity department that focuses on identifying and mitigating cybersecurity and compliance risk The team works closely with the Information Technology department to continuously evaluate and address cybersecurity risks in alignment with our business objectives and operational needs Our Enterprise Risk Management committee which is comprised of members of our executive leadership team reviews and evaluates key risks identified through cybersecurity risk management processes Mosaic develops and continues to refine mitigation plans that adhere to industry best practices
Regularly Mosaic engages external vendors to provide independent insight to overall cybersecurity program effectiveness and to assist with evaluating response preparedness As part of our third party risk oversight we regularly review the vendor s ratings and conduct assessments and interviews with their personnel The results are then reported to leaders in the Information Technology department
The Board of Directors oversees Mosaic s Enterprise Risk Management program and the Audit Committee is tasked with oversight of risk from cybersecurity threats The Board receives an annual cybersecurity update while the Audit Committee receives reports from the Chief Information Security Officer
regularly The reports to the Audit Committee include updates on key performance indicators and key risk indicators including short term intermediate term and emerging risks The Audit Committee then briefs the Board on these matters Ad hoc updates occur as needed
The Information Technology organization is led by the CIO who is responsible for cybersecurity and risk management with oversight by the Audit Committee The cybersecurity program is overseen by the Mosaic s CISO and supporting
cybersecurity leadership who lead teams to protect and preserve the confidentiality integrity and continued availability of all information owned by or in the care of Mosaic The CISO along with the leadership team possess many years of relevant Information Technology cybersecurity and risk management experience in the manufacturing electric defense financial and retail sectors Educational backgrounds include advanced degrees and certifications such as Certified Information Systems Security Professional During the course of leadership team s careers they have built and sustained programs protecting other Fortune 500 companies critical national infrastructure and military defense systems
The CIO and CISO regularly update the Board and or the Audit Committee on cybersecurity matters and the effectiveness of the cybersecurity program The Board and Audit Committee also engage directly with senior leaders from the Information Technology department
As used in this Form 10 K the terms mineral resource measured mineral resource indicated mineral resource inferred mineral resource mineral reserve proven mineral reserve and probable mineral reserve are defined and used in accordance with S K 1300 All determinates of mineral resources and mineral reserves have been prepared by qualified persons Under S K 1300 mineral resources may not be classified as mineral reserves unless the determination has been made by a qualified person that the mineral resources can be the basis of an economically viable project Mineral resources are not mineral reserves and do not meet the threshold for mineral reserve modifying factors such as estimated economic viability that would allow for conversion to mineral reserves There is no certainty that any part of the mineral resources estimated will be converted into mineral reserves
Except for that portion of mineral resources classified as mineral reserves mineral resources have not demonstrated economic value Inferred mineral resources are estimates based on limited geological evidence and sampling and have too high of a degree of uncertainty to apply relevant technical and economic factors likely to influence the prospects of economic extraction in a manner useful for evaluation of economic viability Estimates of inferred mineral resources may not be converted to a mineral reserve It cannot be assumed that all or any part of an inferred mineral resource will be upgraded to a higher category A significant amount of exploration must be completed to determine whether an inferred mineral resource may be upgraded to a higher category Therefore you are cautioned not to assume that all or any part of an inferred mineral resource can be the basis of an economically viable project or that it will be upgraded to a higher category
The subsections below describe the property locations overviews and mineral resource and mineral reserve estimates Our material properties as determined pursuant to S K 1300 are Florida Phosphates Esterhazy Belle Plaine and Tapira Further information about these properties can be found in the technical report summaries
Except as otherwise stated the scientific and technical information relating to Florida Phosphates contained in this Form 10 K is derived from the 2022 S K 1300 report for Florida Phosphates titled Florida Phosphate Mining Technical Report Summary effective December 31 2022 prepared by employees of Mosaic Except as otherwise stated the scientific and technical information relating to Belle Plaine is derived from the 2024 S K 1300 report titled Belle Plaine Potash Facility Technical Report Summary prepared by employees of Mosaic and the scientific and technical information relating to Esterhazy in this Form 10 K is derived from the 2021 S K 1300 report titled Esterhazy Potash Facility Technical Report Summary effective December 31 2021 prepared by employees of Mosaic
Except as otherwise stated the scientific and technical information relating to Tapira contained in this Form 10 K is derived from the 2023 S K 1300 report for Tapira titled SEC S K 1300 Technical Report Summary Mosaic Fertilizantes Complexo Mineracao de Tapira effective December 31 2023 prepared by qualified persons who are employees of WSP USA Inc which is not affiliated with Mosaic
Except as otherwise stated the mineral resource and reserve estimates are prepared by people who are qualified persons in accordance with subpart 1300 of Regulation S K 1300 who are employees of the Company and who have reviewed the mineral reserve estimates and mineral resource estimates and the material assumptions underlying the estimates and determined that the estimates and material assumptions remain current as of December 31 2024
Annual operational capacity is the expected average long term annual capacity for finished goods considering constraints represented by the grade quality and quantity of the reserves being mined as well as equipment performance and other operational factors
Actual production varies from annual operational capacity shown in the above table due to factors that include among others the level of demand for our products the quality of the reserves the nature of the geologic formations we are mining at any particular time maintenance and turnaround time mechanical failure weather conditions and other operating conditions
represents a measure of the phosphate content in phosphate rock or a phosphate ore body A higher percentage corresponds to a higher percentage of phosphate content in phosphate rock or a phosphate ore body
s annual operating capacity and production tonnes are presented at 100 economic interest These amounts are presented in wet tonnes based on average moisture levels of 3 0 to 5 0 These quantities are the production of the drying plant
Capacity is based on finished goods capacity not ore mined The annualized proven peaking capacity shown above is the capacity currently used to determine our share of Canpotex sales Canpotex members respective shares of Canpotex sales are based upon the members respective proven peaking capacities for producing potash When a Canpotex member expands its production capacity the new capacity is added to that member s proven peaking capacity based on a proving run at the maximum production level Alternatively after January 2017 Canpotex members may elect to rely on an independent engineering firm and approved protocols to calculate their proven peaking capacity The annual operational capacity reported in the table above can exceed the annualized proven peaking capacity until the proving run has been completed
Annual operational capacity is the expected average long term annual capacity considering constraints represented by the grade quality and quantity of the reserves being mined as well as equipment performance and other operational factors
Actual production varies from annual operational capacity shown in the above table due to factors that include among others the level of demand for our products the quality of the reserves the nature of the geologic formations we are mining at any particular time maintenance and turnaround time mechanical failure weather conditions and other operating conditions as well as the effect of recent initiatives intended to improve operational excellence
Equivalent to tonnes hoisted to surface at an underground shaft mine Ore mined for Belle Plaine is calculated KCl concentrate mined by solution divided by the estimated global grade of the deposit The calculation is based on actual KCl tonnes mined for January 1 2024 through December 31 2024
Following completion of our Esterhazy K3 expansion project a third party audit assessed our Esterhazy Facility s nameplate capacity at 7 8 million tonnes To date we have been unable to rely upon this audit as a basis for an increase to our Canpotex entitlement percentage We are evaluating when to take the necessary steps to complete the entitlement adjustment process
Overviews for Phosphates Potash and Mosaic Fertilizantes are shown in Table 2 3 Table 2 4 and Table 2 5 below All properties are operated by Mosaic All properties listed below are production stage except Araxá Patrocínio Araxá Patrocínio is an operating mine but is considered an exploration stage mine because Mosaic is extracting minerals from this
mine without having determined there are mineral reserves under S K 1300 Information concerning our material properties is located in this Item 2 under the headings Florida Phosphates Esterhazy Belle Plaine and Tapira
Permit conditions are dictated by operating licenses which are maintained and renewed on a regular basis As of December 31 2024 all environmental licenses were either still valid or were being renewed pursuant to applications with the Peruvian Environmental Agency within the legal deadlines
In general environmental commitments are being met however there are environmental requirements and commitments related to the expansion of Miski Mayo Line 3 of the Second Amendment of the EIA 2015 that have to be verified and implemented
Miski Mayo s environmental controls are related to monitoring the quality of wastewater surface water groundwater and air as well as waste management Additional environmental controls are in place for air emissions air quality and noise
Miski Mayo is a surface mine The phosphate deposits of Peru are located within the shallow north trending Sechura Basin in the Piura region hosting successive inter layered marine sediments of phosphate We extract phosphate ore from Miski Mayo using excavators The ore is then transported by truck for beneficiation in a plant that we own The beneficiated concentrate is then shipped to North America for use in our own production or sold to third parties
In addition we own or lease approximately 14 451 acres of mineral rights within the Colonsay area All mineral properties owned or leased by Mosaic are for the subsurface mineral commodity as defined in The Subsurface Mineral Tenure Regulations Saskatchewan
A water rights license issued by the Saskatchewan Water Security Agency is in place and expires in 2032 The license is associated with the allocation of surface water rights for the site An Approval to Operate Pollutant Control Facilities issued by the Saskatchewan Ministry of Environment is also in place and expires in July 2028 It is expected to be renewed at or before expiration
There are no other significant encumbrances including permitting requirements existing or anticipated in the future associated with the Colonsay Facility Except for the royalties we do not anticipate any future significant encumbrances based on current known regulations and existing permitting processes There are no outstanding violations and fines
The intracratonic Elk Point Basin is a major sedimentary geological feature in western Canada and the northwest U S It contains one of the world s largest stratabound potash resources that represents almost 25 of the global potash production The Prairie Evaporite hosts rich deposits of evaporite minerals including NaCl KCl and locally carnallite that occur in three potash deposits the Esterhazy Belle Plaine and Patience Lake members
The Colonsay deposit includes two potash bearing members within its local stratigraphy the Patience Lake Member and the Belle Plaine Member Mining at Colonsay is conducted within the upper portion of the Patience Lake Member using a room and pillar mining method
The Colonsay Facility uses an underground room and pillar mining method to extract potash After being transported along a network of conveyor systems to the shaft it is hoisted to the surface for onsite processing
The property consists of 89 federally owned and 11 state owned land and 40 acres of privately owned mineral rights that Mosaic leases We lease approximately 64 267 acres of mineral rights from the U S Department of Interior Bureau of Land Management
Currently 11 permits or approvals are active for the property We are in compliance with all such permits or approvals One of the 11 groundwater discharge permit DP 1399 issued by the New Mexico Environmental Department
is currently being renewed The discharge permit governs operation of the TMA A tailings management and inspection plan is in place and active The permit includes closure and post closure requirements and financial assurance requirements
A mining and reclamation plan has been developed and approved by the BLM This plan includes standards for operation and closure of the mine that comply with federal and state of New Mexico environmental regulations Current and final mine closure plans and reclamation cost estimates are completed and the closure plans have been approved by NMED and the BLM
There are no significant environmental permitting encumbrances existing or anticipated in the future associated with the Carlsbad Facility We do not anticipate any future encumbrances based on current known regulations and existing permitting processes There are no outstanding violations and fines
The Carlsbad potash district is located within the northern New Mexico portion of the Delaware Basin The Delaware Basin is the western subdivision of the greater Permian Basin one of the deepest intracratonic basins in North America
Potash mineralization at Carlsbad occurs in the Ochoan Epoch Upper Permian Age Salado Formation The Salado Formation up to a maximum of 2 200 feet 671 m ft thick is an evaporite sequence dominated by 650 to 1 300 feet 198 to 396 m of halite and muddy halite It hosts 12 ore zones 11 in the middle or McNutt Member and the 12th in the Upper Member The area underlain by the 12 ore zones is about 1 900 sq miles 4 920 sq km The 400 foot 122 m thick McNutt Member is at a depth of 300 to 1 500 feet 91 to 457 m below the surface
Pillars are cut in a manner that creates a panel panel sizes can be changed based on grade ground conditions and lease or oil and gas boundaries The mine currently has five mine panels that consist of nine to 11 rooms Drum style continuous miners are utilized for mining As the continuous miner advances ore is fed off a boom located at the back of the miner into battery powered ore haulage units These units transport the ore through the open mine workings and dump it onto an extensive belt system that conveys the ore to the surface for milling
Mosaic currently holds a total of four mining permits within the Araxá area 2 769 hectares and two mining permits and two exploration permits within the Patrocínio area 3 480 hectares Permit conditions are dictated by operating licenses which are maintained and renewed on a regular basis As of December 31 2024 all environmental licenses were valid or were being renewed pursuant to applications filed with the Brazilian Environmental Agency
There are action plans in progress to comply with the environmental conditions of the permits that are not met yet within the applicable regulations Araxá and Patrocínio s environmental controls are related to monitoring the quality of wastewater surface water groundwater and air as well as waste management Additional environmental controls are in place for air emissions air quality and noise
The tropical weather regime prevailing in the region and the inward drainage patterns developed from the weather resistant quartzite margins of the dome structures resulted in the development of an extremely thick soil cover in most of the complexes The extreme weathering was responsible for the residual concentration of apatite
The phosphate ore is extracted through surface mining by limited drilling and blasting loaded into trucks and transported to the beneficiation plants Patrocinio does not have its own beneficiation plant so the ore is transported by rail to Araxá for processing
Mining rights in Brazil are governed by the Mining Code Decree 227 dated February 27 1967 and further regulation enacted by the ANM All subsoil situated within Brazilian territory is deemed state property with the mining activities subject to specific permits granted by the ANM
Mosaic currently holds a total of eight permits within the CMC area 2 131 hectares Permit conditions are dictated by operating licenses which are maintained and renewed on a regular basis As of December 31 2024 all environmental licenses were either valid or were being renewed pursuant to applications filed with the Brazilian Environmental Agency
There are action plans in progress to comply with the environmental conditions of the permits that are not met yet within the environmental permits Cajati s environmental controls are related to monitoring the quality of wastewater surface and groundwater and air as well as waste management Additional environmental controls are in place for air emissions air quality and noise
The primary alkaline intrusive complex of interest for Cajati is the Jacupiranga Ultramafic Carbonatitic Mesozoic Complex The economically exploitable portion of the Jacupiranga Alkaline Complex is focused on phosphate mineralization within the carbonatite domain of the complex
Mining rights in Brazil are governed by the Mining Code Decree 227 dated February 27 1967 and further regulation enacted by the ANM All subsoil situated within Brazilian territory is deemed state property with the mining activities subject to specific permits granted by the ANM
Mosaic currently holds a total of eight permits within the CMC area 2 131 hectares Permit conditions are dictated by operating licenses which are maintained and renewed on a regular basis As of December 31 2024 all environmental licenses were either valid or were being renewed pursuant to applications filed with the Brazilian Environmental Agency
There are action plans in progress to comply with the environmental conditions that are not met yet within the environmental permits CMC s environmental controls are related to monitoring the quality of wastewater surface and groundwater and air as well as waste management Additional environmental controls are in place for air emissions air quality and noise
The tropical weather regime prevailing in the region and the inward drainage patterns developed from the weather resistant quartzite margins of the dome structures resulted in the development of an extremely thick soil cover in most of the complexes The extreme weathering process was responsible for the residual concentration of apatite
Mining rights in Brazil are governed by the Mining Code Decree 227 dated February 27 1967 and further regulation enacted by the ANM All subsoil situated within Brazilian territory is deemed state property with the mining activities subject to specific permits granted by the ANM
Mosaic currently holds one mining permit within the Taquari area 92 498 hectares Permit conditions are dictated by operating licenses which are maintained and renewed on a regular basis As of December 31 2024 all environmental licenses were either valid or being renewed pursuant to applications filed with the Brazilian Environmental Agency within the legal deadlines Licenses are managed through national and state databases
There are action plans in progress to comply with the environmental conditions that are not met yet within the environmental permits Taquari s environmental controls are related to monitoring the quality of wastewater surface water groundwater and air as well as waste management Additional environmental controls are in place for air emissions air quality and noise
The deposit is in the Taquari Vassouras sub basin and is a bedded evaporite where sylvinite is mined in an underground room and pillar mine at depths of 1 640 to 2 207 feet 500 to700m below surface using continuous miners The beneficiation process operation begins at the run of mine stockpile The material is conveyed to the processing circuit where it is divided into seven major units crushing concentration dissolution drying compaction storage and shipping
Mineral resources are reported exclusive of mineral reserves and except as otherwise noted are stated in situ Mineral resources are not mineral reserves and do not meet the threshold for mineral reserve modifying factors such as estimated economic viability that would allow for conversion to mineral reserves There is no certainty that any part of the mineral resources estimated will be converted into mineral reserves
represents a measure of the phosphate content in phosphate rock or a phosphate ore body A higher percentage corresponds to a higher percentage of phosphate content in phosphate rock or a phosphate ore body Brazilian grades except for Cajati are P
was applied for mineral resources A breakeven pit shell was developed with costs grade requirements and a sales price of US 97 69 tonne of phosphate concentrate 2022 price evaluation to develop the mineral resource pit shell
Measured indicated and inferred blocks were included in mineral resource estimates if they were inside mining concessions and exploration permits with a final report approved by the ANM but exclusive of physical structures For example depending on the site a physical structure may consist of a beneficiation plant crusher or waste pile
1 0 BaO 13 0 For Araxá a revenue factor of 1 0 with sales price in Brazilian Reais R of R 1 953 per tonne of phosphate concentrate was used to develop mineral resource pit shell Patrocínio BEB OXI Cut off grade P
ap 5 0 and 0 8 RCP 1 6 and MgO 12 was applied to mineral resources A revenue factor of 1 0 with a constant sales price of R 1 918 75 per tonne of phosphate concentrate was used to develop mineral resource pit shell
ap 5 0 and 0 9 RCP 3 0 was applied to mineral resources A revenue factor of 1 0 with a sales price of R 1 940 per tonne of phosphate concentrate 2023 LOM price evaluation was used to develop the mineral resource pit shell
No cut off grade is used to estimate mineral resources as the solution mining method used at the Belle Plaine Facility is not selective At no point in the cavern development and mining process can a decision be made to mine or not mine the potash mineralization that is in contact with the mining solution The mining solution dissolves the potash regardless of its grade to make a concentrate that is pumped to the surface from the mining caverns for processing A KCl commodity price of US 314 tonne was used for 2025 to 2084 to assess prospects for economic extraction for the mineral resources but is not used for cut off purposes A US CAD exchange rate of 1 32 was used to assess prospects for economic extraction for the mineral resources but was not used for cut off purposes
No cut off grade or value based on commodity price is used to estimate mineral resources as the mining method used at Colonsay or Esterhazy is not grade selective The potash mineralization is mined on one level by continuous miners following the well defined and continuous beds of mineralization with relatively consistent grades The following KCl commodity prices were used to assess prospects for economic extraction for the mineral resources but are not used for cut off purposes US 308 tonne for Esterhazy for 2025 to 2054 and US 316 tonne for 2025 to 2116 for Colonsay A US CAD exchange rate of 1 32 was used to assess prospects for economic extraction for the mineral resources but was not used for cut off purposes
O cut off grade with less than 2 kieserite is used to estimate mineral resources This is consistent with the definition of mineable potash established by the U S Geological Survey A US 300 tonne price was used for 2025 to 2064 to assess economic viability for the mineral resources but was not used for cut off purposes
A mineral reserve is the economically mineable part of a measured or indicated mineral resource which includes diluting materials and allowances for losses that may occur when the material is mined or extracted Reserves are measured as Run of Mine
grade A LOM commodity price of US 143 tonne of phosphate rock was used to assess prospects for economic extraction but is not used for cut off purposes Cut off based on productivity factors per site have been applied to estimate mineral reserves Recoverable Finished Product tonnes vs Matrix Volume Mined ranges from 9 4 to 9 9 Recoverable Finished Product tonnes vs Total Volume Mined is 2 2
Mineral reserves are presented on the basis of our 75 interest The reference point for cut off grade and pit optimization analysis is tonnes of concentrate at a price of US 97 69 tonne concentrate 2022 LOM price evaluation We applied a cut off grade of 8 P
was applied to mineral reserves Mineral reserves were proven to be economic based on an internal transfer price of R 1 067 tonne of phosphate rock 2023 LOM price evaluation that was derived in the discounted cash flow and compared to the gross margin available
ap 5 0 and 0 8 RCP 1 6 and MgO 12 was applied to mineral reserves Mineral reserves were proven to be economic based on internal transfer price of R 596 tonne of phosphate rock 2024 LOM price evaluation that was derived in the discounted cash flow and compared to the gross margin available
ap 5 0 and 0 9 RCP 3 0 was applied to mineral reserves Mineral reserves were proven to be economic based on internal transfer price of R 525 tonne of phosphate rock 2024 LOM price evaluation that was derived in the discounted cash flow and compared to the gross margin available
No cut off grade is used to estimate mineral reserves as the solution mining method used at the Belle Plaine Facility is not selective At no point in the cavern development and mining process can a decision be made to mine or not mine the potash mineralization that is in contact with the mining solution The mining solution dissolves the potash regardless of its grade to make a concentrate that is pumped to surface from the mining cavities for processing Mine designs based on a solution mining method and design criteria are used to constrain mineral reserves within mineable shapes The following KCl commodity prices were used to assess economic viability for the mineral reserves but were not used for cut off purposes 2025 211 tonne 2026 263 tonne 2027 281 tonne 2028 256 tonne 2029 261 tonne and for the LOM 319 tonne A US CAD exchange rate of 1 32 was used to assess economic viability for the mineral reserves but was not used for cut off purposes
The following KCl commodity prices were used to assess economic viability for the mineral reserves US 308 tonne for Esterhazy US 319 tonne for Belle Plaine and US 316 tonne for Colonsay A US CAD exchange rate of 1 32 was used to economic viability for the Esterhazy and Belle Plaine mineral reserves
O cut off grade with less than 2 kieserite is used to estimate mineral reserves This is consistent with the definition of mineable potash established by the U S Geological Survey A US 232 tonne price was used to assess economic viability for the mineral resources but was not used for cut off purposes
A tonnage reduction of 20 has been applied to the Probable mineral reserves to account for geological uncertainty A KCl grade downgrade of 10 was applied to the Probable mineral reserves in order to adjust in situ grades to ROM grades A mean density of 2 10 g cc was applied to all mineral reserve volumes to convert to tonnages Cut off grade of 20 KCl and a minimum sylvinite thickness of 1 8m was applied for mineral reserves The discounted cash flow utilized K
Our three phosphate production stage mining facilities South Fort Meade Four Corners and Wingate and three exploration properties DeSoto Pioneer and South Pasture in Florida consist of over 210 000 acres of property in central Florida Table 2 8 and Figure 2 3 We idled the mining and beneficiation activities at South Pasture The facilities and properties are in DeSoto Hardee Hillsborough Manatee and Polk counties Even though we continue to add real property to one or more of these locations most of the property currently being mined or planned for future mining have been in industry ownership for over 50 years The mining facilities and exploration properties are owned by or have controlling interest granted to Mosaic Fertilizer LLC South Ft Meade Land Management or South Ft Meade Land Partnership L P
We either own or have a controlling interest in the mineral rights to the current and future facilities Mineral and surface rights are joined at the Four Corners Wingate Pioneer and South Pasture properties Portions of the DeSoto property and South Fort Meade facility have the surface and mineral interests severed
Most of the property associated with this mine is west of Duette Road and north of State Road 64 There is a portion of this property that exists on the east side of Duette Road that begins approximately three miles 2 km north of State Road 64 Located at 27 504452 N 82 132221 W
This exploration property is bisected by State Road 70 and State Road 72 running east and west and the county line running north and south A portion of the DeSoto property is owned fee simple and the mining interests on the remaining portion is secured by mineral rights Located at 27 263018 N 82 035208 W
The property is situated along a ten mile stretch of State Road 64 and a seven mile stretch along Country Road 663 All parcels are bisected by County Road 663 State Road 62 State Road 64 and several local roads The mining and beneficiation activities at this location have been idled Located at 27 585787 N 81 942888 W
issued by FDEP and permits required by Section 404 of the federal Clean Water Act In connection with these permits we are required to develop a reclamation plan with respect to these areas The ERP is associated with a FDEP approved reclamation plan that requires acre for acre and type for type reclamation to reclaim mined areas Mitigation may also be required by ERP conditions which may also require conservation easements to provide permanent protection
in 2012 authorizes the withdrawal of groundwater from underground aquifers through permitted wells to provide potable and production water supplies in support of mining and other operations The IWUP addresses all of our active mining operations A separate water use permit
was issued by SWFWMD for the South Pasture property in 2017 The IWUP and the South Pasture WUP also regulate mine dewatering to avoid adverse impacts to wetlands and offsite properties Both the IWUP and the WUP are 20 year permits expiring in 2032 and 2037 respectively
Pre mining development follows the issuance of regulatory permits This involves ditch and berm construction for stormwater control groundwater draw down mitigation where applicable land clearing installation of infrastructure and pre mining dewatering only for dragline mining
There are no significant environmental permitting encumbrances existing or anticipated associated with the mining facilities and exploration properties We do not anticipate any future encumbrances based on current known regulations and existing permitting processes There are no material outstanding violations and fines
The three mining facilities are in rural central Florida located southeast of Tampa in Hardee Hillsborough Manatee and Polk counties The sites are located in agricultural zones with associated population centers and easy access to multiple transportation hubs in central Florida The three exploration properties are located south of the mining facilities Each will utilize the same water electrical railway and road networks as the active mines
The mining facilities at South Fort Meade Four Corners Wingate and South Pasture commenced operations between 1981 and 1995 as noted below under History and Exploration The phosphate mines have the infrastructure to meet our current production plans and long range production goals The current infrastructure includes major roads and highway access railway support from CSX Transportation and electricity supplied by Duke Energy TECO PRECO Florida Power and Mosaic cogeneration in associated distribution areas Water supply is from Mosaic owned deep wells and recycle sources Current clay and tailings management areas footprints are expected to meet present demands with additional capacity planned to meet the maximum volume and deposition rates from the 2024 LOM plan An integrated operations center remotely controls certain functions at our Florida phosphate mines
Additional infrastructure may be added to increase production reliability or flexibility The assets currently in place are maintained through a workflow process that focuses on proactive inspections and preventative maintenance while trying to minimize reactive maintenance Except for South Pasture which is currently idled minimal infrastructure is currently in place at the other exploration properties
We expect the sites to continue to operate effectively during the LOM while continuing to maintain the built infrastructure and renewing the long term agreements in place for the site s water electricity and logistics needs
We focus on reliability centered maintenance with the goal of extending the life of the majority of assets to align with the LOM plan We expect that some infrastructure will need to be replaced as it reaches end of life and has been factored into the relevant capital cost requirements
Phosphate mining in central Florida is a mature industry A network of suppliers machine shops fabricators and specialty contractors exist to support mining and post mining land reclamation activities Many large component vendors have branch offices in either Lakeland or Tampa Florida Engineering design and technical services are readily available in Bartow Lakeland and Tampa Florida
Our mining operations in central Florida extract phosphate using surface mining techniques The active mines utilize either electric walking draglines or dredges to remove overburden and mine phosphate ore matrix Matrix is hydraulically transported via centrifugal pumping systems to the beneficiation plant
Pre mining development follows the issuance of regulatory permits This involves ditch and berm construction for stormwater control groundwater draw down mitigation where applicable land clearing installation of infrastructure and pre mining dewatering only for dragline mining
Development of the mine plan is based on several factors including geological data equipment property boundaries geotechnical considerations clay impoundment reclamation schedule production volume and quality demands permits local state and federal and third party agreements such as agreements with local community groups neighboring properties or NGO s which do not materially impair the mine plan Production is monitored through dragline dredge monitoring systems mass flow instrumentation on slurry pumping systems and pit surveys In addition to draglines and dredges heavy mobile equipment is used to support mining activities While each mine is staffed with Mosaic personnel to handle production and maintenance contractors are used on an as needed basis
Phosphate matrix mined at the three mining facilities is processed through onsite beneficiation plants The principal production components of the beneficiation plants consist of a washer sizing system and flotation plant
Matrix at each mine is slurried for transport to the beneficiation plant After receiving matrix washers separate minerals into four separate material groups These are debris pebbles clay and under sized flotation feed The pebble is one of the final products and the under sized flotation feed material contains recoverable phosphate rock The washers separate 1 0 mm phosphate product and the 1 0 mm slurry of liberated clay sand and phosphate particles The clay is removed with hydrocyclones and pumped to clay settling areas while the 0 1 mm sand and phosphate move on to the sizing section
The 0 1 mm sand and phosphate is separated into different size fractions using hydrosizers An upward flow of water is injected into the hydrosizer that forces the fine particles to rise and overflow the sizer while the coarse particles gently fall and flow out the sizer s underflow The segregated fine and coarse particles are then sent to the flotation plant so the phosphate can be separated from the sand
The two step flotation process rougher flotation and cleaning flotation is next utilized to separate phosphate from the sand In the rougher flotation process the phosphate mineral is recovered using flotation machines by adding fatty acid oil soda ash and sodium silicate To increase the recovered rougher phosphate grade a second cleaning flotation process is used to remove the residual sand using amine
The phosphate deposits of Florida are sedimentary in origin and part of a phosphate bearing province that extends from southern Florida north along the Atlantic coast into southern Virginia Sedimentary phosphate deposits consist of rock in which the phosphate mineral s occur in grains pellets nodules and as phosphate replacement of calcium in the remains of animal skeletal material and excrement
Florida has phosphate rock distributed along the entire peninsula with varying lateral extents and abundance There are five phosphate districts recognized in Florida identified as Northern Northeast Hardrock Southeast and Central The phosphate of Florida occur in sedimentary rocks and are of secondary origin having been redeposited either by mechanical or chemical action During deposition most of the carbonate platform was drowned and deposition was widespread The intensity of reworking by marine processes allows some deposits to remain relatively near their origins and contribute to massive deposits while others were transported and winnowed into deposits of nodules grains and pellets
All our phosphate deposits are located in the central Florida Phosphate District The general description of the phosphatic deposits in central Florida consist of two geological facies The phosphate bearing units are within the Bone Valley Member of the Peace River Formation and the Undifferentiated Member of the Peace River Formation within the South Florida Extension region of the Central District The deposit characteristics transition from northeast to the southwest The major phosphate bearing units in the northeast consist of a productive Bone Valley Member with limited production in the Undifferentiated Member The phosphate bearing units in the southwest exhibit limited production in the Bone Valley Member and a productive Undifferentiated Member of the Peace River Formation
The phosphate stratigraphy consists of 5 to 50 feet 1 5 to 15 2 m thick white to brown poorly graded quartz sand with varying abundance of reworked phosphate grains as waste overburden The economic zone is 13 to 50 feet 4 0 to 15 2 m thick with a grade ranging from 27 to 35 P
It consists of tan gray to gray quartz sands dark gray to dark gray blue green clays and silts with phosphate nodules and pellets present with phosphate grains and clasts predominate There can be interbedded waste zones of 0 to 15 feet 0 0 to 4 6 m thick comprised of beds of cream to green barren sandy clay clays or dense dolomitic clays The basal units are dark gray to black clays to phosphatic limestone rubble to beds of phosphatic limestone
The geological information used to estimate the phosphate mineral resources for the mining facilities and exploration properties is based on drilling and sampling The mineral resource estimates are completed using a proprietary software that applies specific grade physical and impurity limits to the raw drill data of the property These factors are used to select material that contains sufficient grade limited impurities and is physically extractable to be included in the mineral resource estimate The confidence and classification of the mineral resources is estimated based on the drill density of the evaluated area
The methodology for estimating mineral resources consists of interpreting the available geological data to create composites of lithological units that meet the specified criteria These composites are then mapped to determine the mineral resource boundary The boundary is then trimmed to account for permit and mine boundary limitations The composite data is also used to create a geologic model composed of volume density grade and impurity grids created using inverse distance weighted as the interpolation method Elevation grids are created using triangulation based on LiDAR Light Detection and Ranging or survey data assigned to each drill hole A utility macro is used to adjust elevations to account for holes with no matrix that meets the mine requirements The data from each grid is then volumetrically combined using product volumes for the specific mineral resource shape and mineral resource classification creating a block of uniform constituents Estimation of mineralization tonnage grade and impurities is done by applying the volume weight percent of pebble feed and clay for the given mineral resource shape
Mineral resources are not mineral reserves and do not meet the threshold for mineral reserve modifying factors such as estimated economic viability that would allow for conversion to mineral reserves There is no certainty that any part of the mineral resources estimated will be converted into mineral reserves Mineral resources are reported exclusive of mineral reserves
grade including a total MER Mineral reserves have demonstrated economic viability utilizing the criteria and assumptions required at each phosphate facility and meet all the mining criteria required including but not limited to mining processing metallurgical infrastructure economic marketing legal environmental social and governmental factors
The methodology for estimating mineral reserves consists of interpreting the available geological data to create composites of lithological units that meet the specified reserve criteria A utility macro is used to apply reserve plant volume recoveries adjust insoluble limits to the geologic model and to adjust elevations grids to account for holes with no matrix that meets the mine requirements Dragline or dredge pit design work and scheduling are applied to the geologic model by the mine planner Tonnes grades and product quality are estimated by applying the mining shapes to the geological model The data from each grid is then volumetrically combined using product volumes for the specific mine pit shape creating a block of uniform constituents The recoverable tonnes of pebble and feed for the entire mine pit are calculated based on the area of the mine pit The beneficiation plant grade recoveries are then applied to the recoverable feed tonnes to estimate the mineral reserves and recoverable concentrate tonnes
Cut off based on productivity factors per site have been applied to estimate mineral reserves Recoverable finished product tonnes vs matrix volume mined ranges from 9 4 9 9 Recoverable finished product tonnes vs total volume mined is 2 2
As of December 31 2024 we had mineral reserves of 100 million tonnes compared to 112 million in the prior year resulting in a decrease of 13 for proven reserves and a decrease of 9 for probable reserves Changes in mineral reserve tonnage from the prior year are the result of mining depletion and re evaluations
The Belle Plaine Facility is in the rural municipality of Pense No 160 in the province of Saskatchewan Canada It is located north of the TransCanada Highway Hwy 1 approximately 32 miles 51 km west of Regina Figure 2 4 It is the oldest and largest potash solution mine in the world Coordinates for the Belle Plaine Facility are 50 25 39 57 105 11 53 87 50 25 39 57 105 11 53 87
We lease 53 131 acres of mineral rights from the Crown under Subsurface Mineral Lease KL 106 R Table 2 14 lists additional information regarding the lease Table 2 15 outlines the lease acreage designated by township and section The lease term is for a period of 21 years from July 2012 with renewals at the Company s option for additional 21 year periods
In addition we own 19 284 acres of mineral rights within the Belle Plaine area as shown in Table 2 16 below All mineral titles owned or leased by us include subsurface minerals which under The Subsurface Mineral Tenure Regulations 2015 Saskatchewan means all natural mineral salts of boron calcium lithium magnesium potassium sodium bromine chlorine fluorine iodine nitrogen phosphorus and sulfur and their compounds occurring more than 197 0 feet 60 0 m below the surface of the land Other commodities e g petroleum and natural gas coal etc may be included within mineral rights we lease or own but are not specifically sought after when acquired
Within the total acreage leased from the Crown or owned by us are parcels of land where we own or lease less than a 100 share of the mineral rights 100 control by lease or ownership is required for mineral extraction Acreages currently not mineable for this reason are listed in Table 2 17 below
There are no significant environmental permitting encumbrances existing or anticipated in the future associated with the Belle Plaine Facility We do not anticipate any future encumbrances based on current known regulations and existing permitting processes There are no outstanding fines or material violations
The Belle Plaine Facility consists of a mining area and a processing plant Based on the current mine life the mineral reserves support mining for 61 years The processing plant consists of a refinery and cooling pond The Belle Plaine Facility has the infrastructure in place to meet the current production goals and LOM plan The current infrastructure includes major road and highway access railway support from Canadian National Railway
The main source of water non potable required for production is provided by SaskWater from Buffalo Pound Lake an 18 mile 29 km long 0 6 mile 1 km wide lake with an average depth of 10 ft 3 m located northwest of the mine Figure 15 1 Buffalo Pound Lake also supplies potable water for the cities of Regina Moose Jaw and surrounding regions Water levels are controlled by the SaskWater Security Agency and managed through the Lake Diefenbaker Dam SaskWater operates a dedicated pumping station located on the south shore of Buffalo Pound Lake near the eastern edge of the lake with capacity of approximately 13 000 U S gallons per minute There are three on duty pumps and a fourth on standby to ensure steady supply Belle Plaine typically runs two pumps to meet the current water needs with the other pumps providing peaking capacity for future mining Potable water is supplied for the site from the Buffalo Pound Water Treatment facility that is operated by SaskWater Belle Plaine also has a tie in to the potable water line that feeds the City of Regina
SaskPower provides a portion of the power required to run the Belle Plaine Facility This power comes in off their main grid that could be fed from any number of power plants along the highline running north and south along Kalum Road A total of 138 kV comes into the Belle Plaine substation through overhead lines where it is then stepped down to 13 8 kV using two transformers 28 MVA and 33 3 MVA to their substation where there is also a 138 kV grounding transformer and a 138 kV gas insulated switchgear lineup The Belle Plaine Facility generates power from the site powerhouse from two turbine generators Typically the total required Belle Plaine power requirement is 90 in house generated power with the remaining being 10 fed from SaskPower Belle Plaine does not have the option to send power back to the SaskPower grid
From the on site substation 13 8 kV transformer secondary wires are fed to 13 8 kV switchgear lineup in the powerhouse to MCC rooms throughout the plant area and mine area Belle Plaine uses overhead and buried cables throughout the mine area and cable trays in the refinery for the 13 8 kV wires Belle Plaine owns a 138 kV air disconnect that is tied into SaskPower
SaskEnergy supplies natural gas to the Belle Plaine Facility The gas flows from the main lines into a local regulator station situated just north of the administration building and powerhouse This station takes the high pressure feed from the main lines and cuts it down through on site filtration and also does some pre heating to provide low pressure gas directly to the facility
CNR and CPR are available to the Belle Plaine Facility to move final product to port There is a tri party joint operating agreement among Mosaic CPR and CNR which governs the joint operation and interaction of all parties for freight services at the Belle Plaine Facility
The Belle Plaine Facility is located between the cities of Moose Jaw and Regina Saskatchewan Moose Jaw has a population of approximately 34 000 people and is located 17 miles 28 km west of the Belle Plaine Facility
The Belle Plaine Facility workforce primarily lives in Regina and Moose Jaw Belle Plaine Facility personnel are typically trained through a variety of trades programs offered at the Saskatchewan Polytechnic campuses the University of Regina or the University of Saskatchewan
The province of Saskatchewan offers a large variety of suppliers for the potash mine operators The potash industry in Saskatchewan is very mature which makes it easier to attract vendors to support the needs of the various mine sites throughout the province
The Belle Plaine Facility accesses the potash mineral reserves remotely by solution mining the ore Paired wells are directionally drilled cased and cemented to the base of the potash beds and are then connected underground using proprietary potash mining techniques Solution mining can target extraction of the potash
beds Current mining practices allow for all three potash beds in the Prairie Evaporite formation to be recovered Water or a weaker brine is injected into the cavern to return a salt saturated and potash rich brine This fluid is pumped through pipelines from the mining area and sent to the refinery complex as raw feed for further processing The total life cycle of each cavern is approximately 25 years Once the potash recovery is exhausted each cavern is plugged and decommissioned in accordance with local government regulations
Capability is scheduled to ramp up to support a finished tonnage projection of 3 3 million tons 3 0 million tonnes per year and will do so until drilling is completed in the year 2066 at which point there will be a ramp down in production until 2084
The Belle Plaine Facility processing plant receives KCl NaCl rich brine known as raw feed from the mine and achieves KCl recovery through the refinery and cooling pond areas Well established solubility curves of H
The refinery subjects the raw feed brine from the mining area to changing temperatures and pressures that selectively precipitates the NaCl and then the KCl out of solution in different stages of the process Selective drop out of NaCl is achieved through two parallel lines of evaporators that heat the brine with steam that is generated on site through natural gas fired boilers The heating of the raw feed brine results in water liberation causing NaCl to concentrate in the brine and then precipitate out of solution After the brine is conditioned in the evaporator circuit it is pumped to the thickener area for clarification and then pumped into a crystallizer circuit for KCl recovery The crystallizer circuit subjects the process brine to a vacuum that allows further boiling creating a cooling effect on the brine As the brine cools the KCl is forced to precipitate out of solution The solid KCl is withdrawn from the crystallizer vessel as a slurry and pumped to the dewatering and drying area The brine that overflows the crystallizer circuit which still contains some dissolved KCl and NaCl is fed to the cooling pond area for further KCl recovery
The cooling pond area consists of multiple ponds that are fed with brine from the refinery and with raw feed brine from the mining area The ponds facilitate atmospheric cooling which allows KCl to preferentially precipitate out of the brine and then settle to the bottom of the ponds The cooling pond area contains several KCl dredges that are comprised of a cutter wheel that fluidizes the deposited KCl from the bottom of a cooling pond and a slurry pump that moves the KCl slurry toward the dewatering and drying areas
The dewatering and drying area removes the bulk of the brine in the slurry through process equipment and then conveys the KCl product into natural gas fired industrial dryers The dried KCl product is then fed into the sizing area or compaction area for compacting crushing and screening processes to achieve product size specifications Finished product is then conveyed to the on site storage area where it is held until being reclaimed rescreened and shipped off site primarily through rail
Site production is expected to increase to a stabilized 3 0 million tonnes per year until the year 2066 at which time the site will stop drilling new cavities and ramp down production to 2084 The site s ability to produce at a sustained 3 0 million tonnes per year in future years is backed by a Canpotex proving run in 2016 2017 in which the Belle Plaine Facility achieved a production nameplate of 12 179 tons day Total site processing recovery will average approximately 79 throughout the remaining life of the mine and is dependent on sustained drilling activities Future projections are modeled with mass and energy balance software to predict the future production and recovery capabilities
The Belle Plaine Facility started production in 1964 after a period of significant research into solution mining potash recovery and processing plant construction Table 2 18 summarizes the important historical dates and events for the Belle Plaine Facility
A pilot solution mining project located at the current site was constructed convincing Pittsburgh Plate Glass to develop the first commercial potash solution mining operation in the world based on the pilot plant results The first exploration well drilled at the Belle Plaine property was Standard Chemical Stony Beach 1 in August 1960 Fourteen additional exploration wells were drilled from August 1960 to June 1968
Kalium Chemicals Ltd a joint subsidiary of Pittsburgh Plate Glass and Armour and Co started construction of the original processing plant for a capacity of 0 544 million tonnes annually The main plant construction consisted of the North and South evaporators all 8 crystallizers 1 to 4 1 and 2 compactor systems 1 to 5 beehive warehouses loadout building and the office and maintenance buildings
Capacity expansion to 0 9 million tonnes per year Main assets added included three more crystallizers 5 6 and 7 a third cooling tower a sixth beehive warehouse and a barn style warehouse 7 a fluid bed dryer and filter table and a third boiler
Two capacity expansions first to 1 1 million tonnes and the second to 1 5 million tonnes per year The major assets added included bucket elevators for each product the fine fluid bed dryer 4 compactor reheat system barometric additional galleries and conveyors to the warehouse 1A cooling ponds scrubbers and the Cold Leach Area
The first 3D seismic survey at the Belle Plaine Facility was completed providing critical geological information about the geology of the potash members This has become a critical tool used to provide confidence in the interpretation of the potash mineralization
The 2001 Belle Plaine Facility 3D seismic survey was completed The survey covered approximately 5 sq miles 13 sq km and was adjacent to and merged with the 2000 survey This survey program utilized 35 miles 56 km of source lines and 45 miles 72 km of receiver lines
The 2005 Belle Plaine Facility 3D seismic survey was completed The survey covered approximately 4 sq miles 11 sq km and was adjacent to and merged with previous 3D surveys This survey program utilized 29 miles 47 km of source lines and 34 miles 55 km of receiver lines
The 2008 3D seismic survey covered approximately 28 sq miles 72 sq km and was adjacent to and merged with previous 3D surveys This survey program utilized 239 miles 385 km of source lines and 235 miles 378 km of receiver lines
Capacity was expanded to 2 86 million tonnes per year Assets added the injection wells 3 and 4 reclaim brine system 4 boiler process water building cold leach motor control center room 5 compaction system 8 warehouse building 2 reclaim reclaim losses system pond return slurry tank and centrifuge upgrades rotary dryer 3 2 loadout system 37 miles 60 km of new mine field pipelines a drilling rig new substation and replacement of the 4 crystallizer
The Pense 3D seismic survey was completed that covered approximately 15 sq miles 40 sq km and was adjacent to and merged with the previous 3D surveys This survey program consisted of 136 miles 219 km of source lines and 129 miles 208 km of receiver lines
The site s ability to produce at a sustained 3 0 million tonnes per year in future years was validated through a proving run completed in 2016 when the Belle Plaine Facility achieved a proven peak capacity of 3 9 million tonnes per year
Two production wells were cored in 2020 to support the grade interpretation and calibration of the gamma geophysical logging system The recent calibration check has been evaluated by a third party potash consultant to ensure applicability of the method regarding sample quality grade estimation
The intracratonic Elk Point Basin is a major sedimentary geological feature in western Canada and the northwest U S It contains one of the world s largest stratabound potash resources The nature of this type of deposition is largely continuous with predictable depths and thickness It is mined at several locations including Mosaic s Esterhazy Facility
Potash at the Belle Plaine Facility occurs conformably within Middle Devonian age sedimentary rocks ranging in thicknesses from approximately 100 to 131 feet 30 0 to 40 0 m at a depth of approximately 5 345 to 5 740 feet 1 630 to 1 750 m
The Prairie Evaporite Formation host to the potash mineralization is divided into a basal lower salt and an overlying unnamed unit containing three potash bearing units and one unit containing thin marker beds In ascending order the potash horizons in the upper unit are the Esterhazy Member White Bear Marker Beds Belle Plaine Member and Patience Lake Member Mineralogically these members consist of sylvite and halite with minor amounts of carnallite KCl MgCl
The Esterhazy Belle Plaine and Patience Lake members underly the Belle Plaine property Also present are the White Bear Formation marker beds which occur between the Belle Plaine and Esterhazy members but are of insufficient thickness to be minable
The uppermost member of the Prairie Evaporite Formation with potash production potential Between the top of the Prairie Evaporite and the top of the Patience Lake Member is a 0 to 45 feet 0 0 to 14 0 m thick unit of halite with clay bands called the Salt Back The sylvite rich horizons within the Patience Lake Member are mined using conventional underground mining techniques along a trend from Vanscoy to Lanigan in the Saskatoon area and by solution mining techniques at Belle Plaine
The Belle Plaine Member underlies the Patience Lake Member and is separated from it by a zone of low grade sylvinite The Belle Plaine Member is mined using solution mining techniques at the Belle Plaine Facility
The White Bear Formation consists of marker beds that are a distinctive unit of thin interbedded clay halite and sylvinite horizons that are not minable due to insufficient thicknesses of only 4 0 to 5 0 feet 1 2 to 1 5 m
The Esterhazy Member is separated from the Belle Plaine Member by the White Bear Formation marker beds a sequence of clay seams low grade sylvinite and halite The Esterhazy Member is mined using conventional underground techniques at the Esterhazy Facility in southeastern Saskatchewan and by solution mining techniques at the Belle Plaine Facility
The mineable potash mineralization at Belle Plaine occurs in the three major potash bearing members all of which are included in the solution mining The potash mined at Belle Plaine is a mixture of halite and sylvite and in some parts of the mining area small amounts of carnallite There are several clay rich zones that are not recovered in the solution mining process which recovers a concentrate portion of the minerals rather than the entire bed
When considering the sequence of mining at the Belle Plaine Facility the following terminology is applied to the beds This describes the geology in a way that best summarizes the grades that are available for solution mining
Potash mineralization contains sylvinite a mixture of the iron oxide stained halite sylvite and local carnallite When present interstitially or as massive pods carnallite can deteriorate rapidly or be preferentially dissolved The color of the potash can vary from light orange to deep red rimmed crystals The mineralization can be locally bedded or massive The halite and sylvite crystals can range from small to more typically coarse to large which can be attributed to the conditions during deposition as there has been no alteration
The Belle Plaine Facility mineral resources are reported as in situ mineralization and are exclusive of mineral reserves The mineral resources occur in the Esterhazy Belle Plaine and Patience Lake members Mineral resources that are not mineral reserves have demonstrated economic viability utilizing the criteria and assumptions required at the Belle Plaine Facility
The methodology for estimating mineral resources consists of interpreting the available geological data in plan view using AutoCAD 2020 software The plan is updated to include the current mineral rights status seismic survey interpretations the limits of the current mining footprint known areas geological anomalies town sites and other surface infrastructure that make the mineral resource inaccessible and the planned cluster sites
Mineral resources are not mineral reserves and do not meet the threshold for mineral reserve modifying factors such as estimated economic viability that would allow for conversion to mineral reserves There is no certainty that any part of the mineral resources estimated will be converted into mineral reserves
No cut off grade is used to estimate mineral resources This is because the solution mining method used at the Belle Plaine Facility is not selective At no point in the cavern development and mining process can a decision be made to mine or not mine the potash mineralization that is in contact with the mining solution There is no control on what potash grade the mining solution dissolves to make a concentrate that is pumped to surface from the mining caverns for processing
The Belle Plaine Facility mineral reserves are reported as in situ mineralization accounting for all applicable modifying factors Mineral reserves meet all the mining criteria required at the Belle Plaine Facility including but not limited to mining processing metallurgical infrastructure economic marketing legal environmental social and governmental factors
The methodology for estimating mineral reserves consists of solution mining design work and scheduling and the application of mining recovery and unplanned dilution Additional details regarding the estimation methodology are listed in Section 12 of the 2024 Belle Plaine Facility TRS
No cut off grade is used to estimate mineral reserves This is because the solution mining method used at the Belle Plaine Facility is not selective At no point in the cavern development and mining process can a decision be made to mine or not mine the potash mineralization that is in contact with the mining solution There is no control on what potash grade the mining solution dissolves to make a concentrate that is pumped to surface from the mining cavities for processing
The following KCl commodity prices were used to assess economic viability for the mineral reserves but were not used for cut off purposes 2025 211 tonne 2026 263 tonne 2027 281 tonne 2028 256 tonne 2029 261 tonne and for the LOM 314 tonne
As of December 31 2024 our estimated mineral reserves were 654 million tonnes compared to 652 million as of the prior year end resulting in a change of 1 related to our proven reserves The year over year change is due to mining depletion Our probably reserves did not change
The Esterhazy Facility is approximately 10 miles 16 km to the east of the town of Esterhazy in Saskatchewan Canada 56 miles 90 km southeast of the city of Yorkton and 137 miles 220 km east of the city of Regina Figure 2 5 The K1 mill site is located nine miles 14 km northeast of Esterhazy The K2 mill site is located 12 miles 19 km east of Esterhazy The K3 mine site is located four miles east six km of Esterhazy and the K4 mineral resources are located 18 miles northeast of Esterhazy The geographic coordinates for K1 are latitude 50 726463 N and longitude 101 933506 W the K2 coordinates are latitude 50 6574 N and longitude 101 8422 W and the K3 coordinates are latitude 50 64623 N and longitude 101 99346 W
Mosaic through Mosaic Potash Esterhazy Limited Partnership a wholly owned indirect subsidiary of Mosaic leases 197 920 acres of mineral rights from the Crown under Subsurface Mineral Leases KL 105 KL 126 and KLSA 003 Table 2 22 lists additional information regarding the three Crown leases Table 2 23 outlines the total acreage of the Crown leases designated by township and range The lease terms are 21 years with renewals at our option for successive 21 year periods
We also own or lease 206 228 acres of freehold mineral rights within the Esterhazy area as shown in Table 2 24 below All mineral titles owned or leased by Mosaic include the subsurface mineral which under The Subsurface Mineral Tenure Regulations Saskatchewan means all natural mineral salts of boron calcium lithium magnesium potassium sodium bromine chlorine fluorine iodine nitrogen phosphorus and sulfur and their compounds occurring more than 60m below the surface of the land Other commodities e g petroleum and natural gas coal etc that are not specifically sought after when acquired may be on mineral titles that Mosaic leases or owns
Within the total acreage leased from the Crown or owned leased by us are parcels of land where we own or lease less than a 100 share of the mineral rights To mine these properties we would need to acquire 100 control either by lease or ownership Acres currently not mineable for this reason are listed in Table 2 25 below
There are no significant environmental permitting encumbrances existing or anticipated in the future associated with the Esterhazy Facility Except for royalties we do not anticipate any future encumbrances based on current known regulations and existing permitting processes There are no outstanding fines or material violations
The Esterhazy Facility consists of an underground mine and two processing plants that started production in 1962 The mine has an additional expected life based on mineral reserves of 30 years to 2054 The Esterhazy Facility has the infrastructure in place to meet the current production goals and LOM plan The current infrastructure includes major road and highway access railway support from CNR and CPR SaskPower supplied electricity TransGas and SaskEnergy supplied natural gas and potable and non potable water supplied from local fresh water sources The long term TMA development plan is being revised to support production at the levels indicated in the LOM plan
Process and potable water for the K1 mill is provided by three 200 ft 61 m deep wells drilled into the upper Dundurn aquifer The K2 mill water supply comes from the Cutarm Creek dam reservoir that is owned and operated by Mosaic Located 1 5 miles 2 4 km northeast of the K2 site the dam forms a reservoir approximately 5 25 miles 8 5 km long and 650 feet 200 m wide K3 mine water is supplied from K2 via a 7 4 mile 11 8 km long pipeline
The power to operate the Esterhazy Facility is supplied by the provincial utility SaskPower The K1 mill is serviced by a 72 kV line with approximately 36 MVA capacity The K2 mill has two services at 72 kV and 138 kV respectively with a combined capacity of 125 MVA The K3 mine is serviced by a 230 kV line from SaskPower with 140 MVA capacity Two transformers step down the voltage each rated at 70 MVA
TransGas provides an uninterrupted supply of natural gas to the Esterhazy Facility SaskEnergy also supplies natural gas to a few outlying areas at K2 Esterhazy has regulator stations for the natural gas at each of the sites with a low pressure distribution piping network
Regina International Airport is 140 miles 225 km by highway west of the Esterhazy mine sites while Yorkton municipal airport is 55 miles 90 km to the northwest The Town of Esterhazy maintains a paved 3 000 feet 914 m long airstrip located eight miles 13 km southwest of the K1 mill
The Esterhazy Facility s workforce lives throughout the area generally within 62 miles 100 km of the mine sites This includes the Russell and Binscarth areas of western Manitoba Education and healthcare facilities are in Esterhazy Russell Melville and Yorkton
The province of Saskatchewan offers a large variety of suppliers for the potash mine operators The potash industry in Saskatchewan is very mature making it easier to attract vendors to support the needs of the various mine sites throughout the province
At Esterhazy potash is extracted by underground mining using the room and pillar method The average planned extraction quality of the potash ore is 28 4 Pillars are left in place between mining rooms to support the overlying rock to prevent a failure of the upper rock formations preventing an inflow of brine from any overlying water bearing zones
The 2024 LOM plan for the Esterhazy Facility includes the K3 mineral reserves and the K4 mineral resources It is based on an average production rate of 17 5 million tonnes per year based on 365 production days per year
The Esterhazy Facility s processing plant consists of two separate mill facilities designated as K1 and K2 Each mill processes the raw ore feed stock received from the underground mining operations through crushing separation screening and compaction unit operations to produce on grade saleable product The plants utilize online grade analyzers to monitor the process as well as routine samples that are analyzed by the onsite lab The milling can be broken down into two main functions the wet end separates potash and salt while the dry end sizes potash for sale
The wet end of the mill begins with raw ore sizing and crushing to prepare it for the separation processes In heavy media the larger size fraction is separated into potash and salt through dense media separation that is driven by differences of buoyancy in salt and potash Flotation receives the smaller size fraction and has specific reagents added that allow the potash crystals to float while the salt is rejected as tailings material At K2 there is also a crystallizer circuit that produces potash using solubility temperature and pressure differences Dewatering and drying is the final stage in the wet end where potash is sent through centrifuges and industrial driers to remove all moisture
Once the product is dried it is sent to a screen to separate the right sized material from the over and undersize material for all the different product grades Oversized material is sent through a crushing circuit to break it down to right sized material The undersize material is upgraded through compaction to a larger product
Esterhazy plans to ramp up milling rates once the K3 mine is up to full capacity and then stabilize at a total milling rate to the end of mine life The differences in final product tonnes will be based on supplied raw ore grade as it varies throughout the mine workings The site s ability to produce at the increasing rates being forecasted in the LOM plan are supported by a proving run in 2013 when the Esterhazy plants achieved an annual production nameplate of 5 7 million tonnes overall
Inflow 10B was detected December 29 1985 in the D400 entry at a point 3 5 miles 5 6 km southwest of the K2 shaft Initial inflow was estimated to be 1 000 gpm Information obtained using seismic surveys allowed for targeted drilling and placement of calcium chloride and various grouts to reduce the inflow to manageable levels The pumping capacity was increased through a series of stages to bring online a total of 22 pumps to a maximum capacity of 4 000 gpm As a result of these efforts K1 and K2 sites continued normal mining operations
Various seismic surveys completed Hoist expansion at K2 Processing plant capacity increased to 4 8 million tonnes per year K2 TMA expansion completed Exploration drilling of ten holes including two shaft pilot holes completed as part of the K3 expansion project
K3 south shaft pre sink was completed Esterhazy exits Tolling Agreement with PCS A number of 3D seismic surveys were completed including Saskman K1 NW K1 SWD Field Seven brine injection wells were drilled at Farfield
Commissioned the K3 Koepe production and Blair service hoists Four drum miners cutting K3 shaft pillar development started Two four rotor miner assembly completed The K3 South shaft sinking was completed in November
Completion of the K3 south shaft bottom steel added a third four rotor miner installed the Mainline conveyor added a fourth rotor miner cutting and completed the K3 south headframe concrete slip K3 shaft pillar development was completed in December The K3 fifth four rotor miner started cutting in October The first ore from K3 conveyed to K1
The sixth K3 four rotor miner started cutting in January and the seventh four rotor miner started cutting in May The K1 and K2 mines were closed eight months ahead of schedule in response to brine inflow conditions
The intracratonic Elk Point Basin is a major sedimentary geological feature in western Canada and the northwest U S It contains one of the world s largest stratabound potash resources The nature of this type of deposition is largely continuous with predictable depths and thickness It is mined at several locations including the Esterhazy Facility
Potash at the Esterhazy Facility area occurs conformably within Middle Devonian age sedimentary rocks and is found in total thicknesses ranging from approximately 100 to 131 feet 30 to 40 m at a depth of approximately 5 345 to 5 740 feet 1 630 to 1 750 m
The Prairie Evaporite Formation host to the potash mineralization is divided into a basal lower salt and an overlying unnamed unit containing three potash bearing units and one unit containing thin marker beds In ascending order the potash horizons in the upper unit are the Esterhazy Member White Bear Marker Beds Belle Plaine Member and Patience Lake Member Mineralogically these members consist of sylvite and halite with minor amounts of carnallite KCl MgCl
In the Esterhazy area the Esterhazy White Bear and Belle Plaine members are present and the Patience Lake member is absent The following is a summary of the key stratigraphic units for the Esterhazy Facility area
The Belle Plaine Member underlies Second Red Bed and makes up part of the salt back that is critical to isolating the mining horizon from the formations above The Belle Plaine Member is mined using solution mining techniques at the Belle Plaine Facility and is not mined at the Esterhazy Facility
The White Bear Member consists of marker beds that are a distinctive unit of thin interbedded clay halite and sylvinite horizons that are not minable due to insufficient thickness of only 4 0 to 5 0 feet 1 2 to 1 5 m
The Esterhazy Member is separated from the Belle Plaine Member by the White Bear Member marker beds a sequence of clay seams low grade sylvinite and halite The Esterhazy Member is mined using conventional underground techniques at the Esterhazy Facility in southeastern Saskatchewan and by solution mining techniques at the Belle Plaine Facility
The sylvinite intervals within the Prairie Evaporite Formation consist of a mass of interlocked sylvite crystals that range from pink to translucent and may be rimmed by greenish grey clay or bright red iron insoluble material with minor halite randomly disseminated throughout the mineralized zones Local large one inch 2 5 cm cubic translucent to cloudy halite crystals may be present within the sylvite groundmass and overall the sylvinite ranges from a dusky brownish red color lower grade 23 to 27 K
O Carnallite is also present locally in the Prairie Evaporite Formation as a mineral fraction of the depositional sequence The intervening barren salt beds consist of brownish red vitreous to translucent halite with minor sylvite and carnallite and increased insoluble materials content
No cut off grade or value based on commodity price is used to estimate mineral resources This is because the mining method used at Esterhazy is not grade selective Potash mineralization is mined on one level by continuous miners following the well defined and continuous beds of mineralization with relatively consistent grades
The Esterhazy Facility s mineral resources are reported as in situ mineralization and are exclusive of mineral reserves The mineral resources occur in the Esterhazy White Bear and Belle Plaine members The mineralization is assumed to be
The methodology for estimating mineral resources consists of interpreting the available geological data in plan view using AutoCAD 2020 software The plan is updated to include the current mineral rights status seismic survey interpretations the limits of the current mining footprint known areas geological anomalies town sites and other surface infrastructure that make the mineral resource inaccessible property boundary pillars pillars around exploration holes and infrastructure no mining areas in the uncontrolled mineral rights locations and a pillar between the K1 and K2 mining area and the adjacent K4 mineral resource areas
Mineral resources have an effective date of December 31 2024 Mineral resources are reported exclusive of those mineral resources that have been converted to mineral reserves Unlike mineral reserves mineral resources do not have demonstrated economic viability but they do demonstrate reasonable prospects for economic extraction
Mineral resources are not mineral reserves and do not meet the threshold for mineral reserve modifying factors such as estimated economic viability that would allow for conversion to mineral reserves There is no certainty that any part of the mineral resources estimated will be converted into mineral reserves
Mineral resources amenable to underground mining methods are accessed via shaft and scheduled for extraction based on a conceptual room and pillar design using the same technical parameters as for mineral reserves
No cut off grade or value based on commodity price is used to estimate mineral resources This is because the mining method used at Esterhazy is not grade selective The potash mineralization is mined on one level by continuous miners following the well defined and continuous beds of mineralization with relatively consistent grades Section 11 2
The Esterhazy Facility s mineral reserves are reported as in situ mineralization accounting for all applicable modifying factors Mineral reserves meet all the mining criteria required at Esterhazy including but not limited to mining processing metallurgical infrastructure economic marketing legal environmental social and governmental factors
The methodology for estimating mineral reserves consists of post pillar mine design work and scheduling and the application of mining recovery and unplanned dilution Additional details regarding the estimation methodology are listed in Section 12 of the 2021 Esterhazy Facility TRS filed as an Exhibit to the 2021 Form 10 K
Underground mining standards and design criteria are used to constrain measured and indicated mineral resources within mineable shapes Only after a positive economic test and inclusion in the LOM plan is the mineral reserve estimate included as mineral reserves
At December 31 2024 we had mineral reserves of 500 million tonnes compared to 515 million tonnes in the prior year resulting in a decrease of 2 9 Proven reserves increased by 40 while probable reserves decreased 15 The year over year changes are due to mining depletion changes in mineral reserve category and increased sterilization of mineral reserves due to unmineable buffer areas
Tapira is located in the western portion of the state of Minas Gerais in the southeast of Brazil to the north of the town of Tapira and approximately 22 miles 35 km south southeast of the city of Araxá Figure 2 6 The mine is 261 miles 420 km by road to the Minas Gerais state capital of Belo Horizonte via the BR 262 highway to Araxá and then the BR 146 highway to Tapira The property extends from approximately UTM 7 805 000 N to 7 799 500 N and from 304 000 E to 310 000 E Corrego Alegre 1961 UTM Zone 23 South and is centered approximately at 19º52 S 46º51 W The Tapira complex consists of a mine and a phosphate beneficiation plant The plant produces phosphate conventional and ultrafine concentrate which is sent by pipeline conventional and truck ultrafine to local Mosaic chemical plants for finished product production
Tapira is located in a highly developed region known as Alto Parnaíba This region is known for its modern infrastructure with high standards of living compared with other regions in Brazil The local infrastructure available to Tapira is situated within a well established mining area 22 miles 35 km from the city of Araxá and within 16 miles 25 km of two other mining operations
Water intake comes from the Ribeirão do Inferno and artesian wells as well as recovered water from the tailings dams Additionally there are four artesian wells at Tapira The industrial reuse system used to recover water from the dams includes ten pumps four operating and six on stand by and 36 inch 91 cm pipes covering varying distances to the different dam areas The distance from BR1 dam is approximately six miles nine km with a rated capacity of 4 400 cubic meters per hour
Infrastructure includes a phosphate beneficiation plant with associated support infrastructure including tailings storage facilities maintenance facilities warehouses and various administrative and other support facilities The mine infrastructure
Network connectivity is in place at the mine buildings and a telephone system provides coverage throughout the mine unit A radio system provides the ability to dispatch and control the mining equipment and transport trucks as well as communicate with the control room in the beneficiation plant
Mining rights in Brazil are governed by the Mining Code Decree 227 dated February 27 1967 and further regulation enacted by the ANM This governmental agency which controls the mining activities throughout Brazil was recently created as a replacement of the former National Department of Mineral Production
The Tapira mineral assets are part of a Consortium named Consórcio Vale Fosfértil Tapira created by Decree Number 98 962 February 16 1990 Process Number 930 785 1988 4 355 76 ha granted to Vale S A previously Vale do Rio Doce S A and Vale Fertilizantes Fosfatados S A Fosfértil
Tapira has an overall surface rights area of 8 008 ha distributed in 18 different property registrations The surface area within the ultimate pit is currently mostly controlled by Mosaic There is a small area near a local village that is not within the current property rights The relocation of the village and State Highway MG 146 will be necessary to fully realize the LOM tonnages The area surrounding the village and State Highway MG 146 is currently included in the currently controlled mining permits and is therefore not seen as a significant encumbrance to Tapira
The capacity requirements are not currently in place for all tailings disposal for total LOM capacity requirements However Tapira has an ongoing permitting and development plan to support the mining operations that will continue through the LOM requirements
All required fixed and permanent infrastructure of power pipelines and primary roadways and project access are established Drainage water controls and mine access roads and ramps are established for current operations and will be expanded and continued as the pit progresses through its planned life of operations
The ore at Tapira is recovered using open pit conventional truck and shovel mining methods due to the proximity of the ore to the surface and the physical characteristics of the deposit The ore is transported via truck to a homogenization pile where it is later fed to the beneficiation plant via conveyors The beneficiation plant produces phosphate conventional and ultrafine concentrate which is sent by pipeline conventional and truck ultrafine to local Mosaic chemical plants for finished product production
The mining equipment at Tapira is leased and therefore not owned by us The beneficiation plant has been in operation since Tapira started 45 years ago The tailings dams water dams and sedimentation ponds have been active at Tapira since mining started 45 years ago as well Currently the BR1 dam is being raised to its final design height to accommodate the LOM plan
Exploration activities are ongoing for in fill drilling for phosphate production to complete the current LOM Additional areas of exploration and research include better understanding the non weathered material and titanium ore for future mining prospects
The geological structure of the alkaline complex of Tapira was first recognized in 1953 through magnetometric and radiometric investigations carried out by the Brazil Germany Project There was an agreement between the two countries to carry out regional geophysical aero survey programs performed by the Geological Survey of Brazil in the 1950s 1960s and 1970s
In 1968 three major private groups Pedro Maciel Companhia Meridional de Mineração and Companhia Brasileira de Metalurgia e Mineração had exploration research requests granted by DNPM In early1971 Vale previously known as Companhia Vale do Rio Doce joined Pedro Maciel to create the company Titan International S A which changed its name to Rio Doce Titânio in later years Vale acquired the rights of Pedro Maciel at the end of 1971 with the mining rights incorporated into the company Mineração Rio Paranaíba At the time a series of intensive and detailed systematic works were undertaken and important occurrences of phosphate titanium niobium rare earths and vermiculite were identified
Extensive exploration works were undertaken between 1971 and 1973 with particular focus on the occurrences of titanium From 1973 to 1977 the exploration priorities changed to occurrences of phosphate with the aim of replacing the massive imports of fertilizers in the agricultural sector that was then undergoing a period of expansion in Brazil In 1977 the Fosfértil Fertilizantes Fosfatados S A company was created under the administration of Petrofértil a subsidiary of Petrobras the Brazilian state oil company In 1992 Fosfértil was privatized and a pool of investors held the company shares
In 2010 Vale S A acquired complete control of Fósfertil and after created a new company Vale Fertilizantes S A which included other fertilizer assets At the start of 2018 Mosaic Fertilizantes P K S A acquired the assets of Vale Fertilizantes including the Tapira mineral deposit
The Tapira phosphate deposit is part of a series of Late Cretaceous carbonatite bearing alkaline ultramafic plutonic complexes belong to the Alto Paranaiba Igneous Province The Tapira igneous rocks intrude the phyllites schists and quartzites of the Late Proterozoic Brasília mobile belt The Tapira igneous complex is roughly elliptical 35 square kilometers
The tropical weathering regime prevailing in the region and the inward drainage patterns developed from the weathering resistant quartzite margins of the dome structures resulted in the development of an extremely thick soil cover in most of the complexes The extreme weathering process was responsible for the residual concentration of apatite The main geological types identified in the deposit are a combination of the igneous protoliths bebedourites phoscorites and carbonatites and the products of the weathering process
The mineral resources at Tapira were estimated based on the long standing exploration drilling and sampling completed at Tapira since 1967 The drilling results were loaded into the geological database verified and vetted for errors and then used in the geological model to create the lithology and weathering surfaces The geological model was used in creating the block model where geological domains based on the lithology and weathering surfaces were utilized to interpret grade density and mass recovery in a geologically appropriate manner Exploratory Data Analysis and geostatistical analysis were completed on the raw and composite data sets to help define interpolation parameters and mineral resource classifications The mineral resources were restricted based on an optimized pit limit that took into account cut off grade price mining costs infrastructure limitations and mineral licenses The mineral resources are exclusive of mineral reserves and include approximately 76 0 Mt of measured and indicated mineral resources with a P
Mineral resources are reported exclusive of mineral reserves Mineral resources are not mineral reserves and do not meet the threshold for mineral reserve modifying factors such as estimated economic viability that would allow for conversion to mineral reserves There is no certainty that any part of the mineral resources estimated will be converted into mineral reserves
RCP 3 0 was applied to mineral resources Measured indicated and inferred blocks were included in mineral resource estimates if they were inside mining concessions and exploration permits with a final report approved by ANM but exclusive of physical structures such as the crusher and waste piles A revenue factor of 1 0 with sales price of R 1 939 57 per tonne of phosphate concentrate 2023 price evaluation was used to develop the mineral resource pit shell
A mineral reserve estimate has been prepared for Tapira Mineral reserves are limited by the Tapira property boundary and the ultimate pit designed for the LOM plan which was limited with an economic optimized pit analysis
The mineral reserve estimate includes mining modifying adjustments for mining ore recovery mining dilution and ore concentration recovery factors The mineral reserve estimate is limited to a cut off grade of 5 0 P
The beneficiation plant generates conventional coarse and ultrafine concentrates from the Tapira ore The mass recovery of coarse concentrate is forecast based on the results of laboratory flotation tests performed on drill core samples The test database was subdivided into metallurgical recovery domains treating isalterite and semi weathered horizons separately For each metallurgical recovery domain a linear regression was developed capable of predicting mass recovery based on the P
The annual production estimates were used to determine annual estimates of capital and operating costs All cost estimates were in Brazilian real 2024 R terms Total capital costs included R 4 0 billion of sustaining capital and opportunity costs Annual operating costs were based predominantly on historical consumption factors and unit costs They included costs for ongoing final reclamation and closure Annual total cost of rock production varied from R 291 per concentrate tonne to R 425 per concentrate tonne with an average total cost of production for a tonne of phosphate rock concentrate at R 370
Because Tapira is a captive operation supplying rock to other Mosaic owned chemical plants there is no transparent mined phosphate rock commodities price market in Brazil Mineral reserves for Tapira were estimated based on an internal transfer price This internal transfer price was set as a constant number of US 111 76 per tonne R 525 per tonne
Mineral reserve tonnages and grade are stated as ROM tonnages The mineral reserves are constrained by a pit design that honors site specific geotechnical designs by pit sector The mine plan considers constraints required for surface and groundwater management appropriate extraction methodology labor and equipment requirements beneficiation plant mass and metallurgical recoveries and are dependent upon all permits and environmental licenses in place and continued approved status The reference point for cut off grade and pit optimization analysis is tonnes of concentrate at a price of R 1 940 tonne concentrate 2024 price evaluation Cut off grade of P
ap 5 0 and 0 9 RCP 3 0 was applied to mineral reserves Mineral reserves were proven to be economic based on internal transfer price that was derived in the discounted cash flow and compared to the gross margin available
The comparison of the Mineral Resources as of December 31 2023 and December 31 2024 can be found in Table 2 32 The Measured and Indicated Mineral Resources have increased by 9 while the Inferred Resources have decreased by an immaterial amount since December 31 2023
Qualified persons including third parties and Mosaic employees are responsible for estimating mineral resources and reserves Mosaic has a Global Review Team consisting of a broad spectrum of internal personnel outside the operating organization whose primary responsibilities include review of the mineral resources and reserves estimation reporting for compliance with SEC rules and regulations The Global Review Team includes members from Mosaic s accounting finance business units and legal departments Reports prepared by qualified persons and third parties are reviewed at various levels of the Global Review Team before they are ultimately reviewed and approved by our senior leadership team In future years Mosaic expects to modify and streamline our S K 1300 processes and internal controls
orders on imports of phosphate fertilizers from Morocco and Russia in response to petitions filed by Mosaic The purpose of the CVD order is to remedy the injury to the U S phosphate fertilizer industry caused by imports that benefit from unfair foreign subsidies and thereby restore fair competition CVD orders normally stay in place for at least five years with possible extensions
These litigation challenges remain underway The CAFC is reviewing a challenge to DOC s final determination in the CVD investigation for Russia DOC is expected to issue a second remand determination for the CVD investigation for Morocco which will then be reviewed by the CIT and the CIT is reviewing a January 2024 ITC remand determination upholding its original affirmative injury determination
When a CVD order is in place DOC normally conducts annual administrative reviews which establish a final CVD assessment rate for past imports during a defined period and a CVD cash deposit rate for future imports In November 2023 DOC announced the final results of the first administrative reviews for the CVD orders on phosphate fertilizers for Russia and Morocco covering the period November 30 2020 to December 31 2021 DOC calculated new subsidy rates of 2 12 for Moroccan producer OCP and 28 50 for Russian producer PhosAgro In addition in November and December 2024 DOC announced the final results of the second administrative reviews for the CVD orders on phosphate fertilizers for Russia and Morocco covering calendar year 2022 DOC calculated subsidy rates of 16 60 for OCP and 18 21 for PhosAgro Mosaic as well as parties that oppose the duties have appealed the final results of DOC s first and second administrative reviews to the CIT Currently DOC is conducting an administrative review for imports from Russia covering calendar year 2023 DOC is not conducting an administrative review for Morocco for this period The applicable final CVD assessment rates and cash deposit rates for imports of phosphate fertilizer from Morocco and Russia could change as a result of these various proceedings and potential associated appeals whether in federal courts or at the World Trade Organization
Acting on Mosaic s Application for Waiver and Reclamation Schedule Extension in May 2020 the Hardee County Board of County Commissioners approved 1 a waiver of the applicable reclamation deadlines of the South Pasture Development Order and Land Development Code 2 an alternative reclamation schedule and 3 a settlement agreement that resolved the NOV
Mosaic timely paid the civil penalty required by the settlement agreement and continues to implement the approved alternative reclamation schedule as required Monitoring programs are in place to ensure continued compliance with the Waiver and settlement agreement
On August 27 2020 a putative class action complaint was filed in the Circuit Court of the Thirteenth Judicial Circuit in Hillsborough County Florida against our wholly owned subsidiary Mosaic Global Operations Inc and two unrelated co defendants The complaint alleges claims related to elevated levels of radiation at two manufactured housing communities located on reclaimed mining land in Mulberry Polk County Florida allegedly due to phosphate mining and reclamation activities occurring decades ago Plaintiffs seek monetary damages including punitive damages injunctive relief requiring remediation of their properties and a medical monitoring program funded by the defendants On October 14 2021 the court substantially granted a motion to dismiss we filed late in 2020 with leave for the plaintiffs to amend their complaint
On November 3 2021 plaintiffs filed an amended complaint and in response Mosaic filed a motion to dismiss that complaint with prejudice on November 15 2021 On December 23 2021 plaintiffs opposed that motion and Mosaic replied to that opposition on January 26 2022 On April 6 2022 the court heard argument on the motions to dismiss filed by Mosaic and each other co defendant In late March 2023 the court denied Mosaic s motions to dismiss
The NOPVOC relates to a compliance evaluation inspection conducted by the EPA at the Faustina Plant from February 22 25 2022 and alleges violations of the RMP Rule We conferred with the EPA regarding the allegations in the NOPVOC on November 30 2022 We negotiated a Consent Agreement and Final Order
1 installation of ammonia monitors and monitoring at the plant for a period of two years and 2 donation of two generators to the St James Parish Department of Emergency Preparedness We completed the donation to the St James Parish Department of Emergency Preparedness on March 14 2024 and we completed installation and began operation of the ammonia monitors on April 24 2024
Information concerning mine safety violations or other regulatory matters required by Section 1503 a of the Dodd Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S K is included in Exhibit 95 to this report
performance units settled in stock The total does not include cash settled TSR performance units For purposes of the table above the number of shares to be issued under a performance unit award reflects the maximum number of shares of our common stock that may be issued pursuant to such performance award The actual number of shares to be issued under a TSR performance unit award will depend on the change in the market price of our common stock over a three year vesting period No shares will be issued if the market price of a share of our common stock at the vesting date plus dividends thereon is less than 50 of its market price on the date of grant and the maximum number will be issued only if the market price of one share of our common stock at the vesting date plus dividends thereon is at least twice its market price on the date of grant
Pursuant to our equity compensation plans we have granted and may in the future grant employee stock options to purchase shares of common stock of Mosaic for which the purchase price may be paid by means of delivery to us by the optionee of shares of common stock of Mosaic that are already owned by the optionee at a value equal to market value on the date of the option exercise During the period covered by this report no options to purchase shares of common stock of Mosaic were exercised for which the purchase price was so paid
We have included a discussion about market risks under Market Risk in the Management s Analysis that is included in this report in Part II Item 7 Management s Discussion and Analysis of Financial Condition and Results of Operations This information is incorporated herein by reference
Our Consolidated Financial Statements the Notes to Consolidated Financial Statements the report of our Independent Registered Public Accounting Firm and the information under Quarterly Results listed in the Financial Table of Contents included in this report are incorporated herein by reference All other schedules for which provision is made in the applicable accounting regulation of the SEC are not required under the related instructions or are inapplicable and therefore have been omitted
We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in our filings under the Exchange Act is i recorded processed summarized and reported within the time periods specified in the SEC s rules and forms and ii accumulated and communicated to management including our principal executive officer and our principal financial officer to allow timely decisions regarding required disclosures Our management with the participation of our principal executive officer and our principal financial officer has evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Form 10 K Our principal executive officer and our principal financial officer have concluded based on such evaluations that our disclosure controls and procedures were effective for the purpose for which they were designed as of the end of such period
We have included management s report on internal control over financial reporting under Management s Report on Internal Control Over Financial Reporting listed in the Financial Table of Contents included in this Form 10 K
We have included our registered public accounting firm s attestation report on our internal controls over financial reporting under Report of Independent Registered Public Accounting Firm listed in the Financial Table of Contents included in this Form 10 K
Our management with the participation of our principal executive officer and our principal financial officer have evaluated any changes in our internal control over financial reporting that occurred during the three months ended December 31 2024 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting During the third quarter of 2024 we completed the implementation of a new enterprise resource planning
system As a result we have modified or implemented certain annual internal controls over financial reporting to address the new control environment and processes associated with the new ERP system There were no other changes in our internal control over financial reporting during the quarter ended December 31 2024 that have materially affected or are reasonably likely to materially affect the Company s internal control over financial reporting
Committees of the Board of Directors Beneficial Ownership of Securities and Delinquent Section 16 Reports included in our definitive proxy statement for our 2025 annual meeting of stockholders and the information contained under Information About our Executive Officers in Part I Item 1 Business in this report is incorporated herein by reference
The information under the heading Corporate Governance Insider Trading Policy included in our definitive proxy statement for our 2025 annual meeting of stockholders is incorporated herein by reference A copy of our insider trading policy is filed as Exhibit 19 to this Form 10 K
We have a Code of Business Conduct and Ethics within the meaning of Item 406 of Regulation S K adopted by the SEC under the Exchange Act that applies to our principal executive officer principal financial officer and principal accounting officer Our Code of Business Conduct and Ethics is available on Mosaic s website www mosaicco com and we intend to satisfy the disclosure requirement under Item 5 05 of Form 8 K regarding any amendment to or waiver from a provision of our code of ethics by posting such information on our website The information contained on Mosaic s website is not being incorporated herein
The information under the headings Director Compensation and Executive Compensation included in our definitive proxy statement for our 2025 annual meeting of stockholders is incorporated herein by reference
The information under the headings Beneficial Ownership of Securities and Certain Relationships and Related Transactions included in our definitive proxy statement for our 2025 annual meeting of stockholders is incorporated herein by reference The table containing information related to equity compensation plans set forth in Part II Item 5 Market for Registrant s Common Equity Related Stockholder Matters and Issuer Purchases of Equity Securities of this report is also incorporated herein by reference
Policy and Procedures Regarding Transactions with Related Persons and Certain Relationships and Related Transactions included in our definitive proxy statement for our 2025 annual meeting of stockholders is incorporated herein by reference
Consolidated Financial Statements filed as part of this report are listed in the Financial Table of Contents included in this report and incorporated by reference in this report in Part II Item 8 Financial Statements and Supplementary Data
First Amendment to Credit Agreement dated as of May 10 2023 among The Mosaic Company as borrower Bank of America N A as Administrative Agent Swing Line Lender and an L C Issuer and the lenders and other L C Issuers party thereto
Registrant hereby agrees to furnish to the Commission upon request all other instruments defining the rights of holders of each issue of long term debt of the Registrant and its consolidated subsidiaries
Description of Modifications to Consent Decree dated September 30 2015 among the United States of America the Florida Department of Environmental Protection Mosaic Fertilizer LLC and The Mosaic Company filed as Exhibit 10 1 to the Current Report on Form 8 K of Mosaic dated September 30 2015 and filed on October 6 2015
Description of Modifications to Consent Decree dated September 30 2015 among the United States of America the Louisiana Department of Environmental Quality Mosaic Fertilizer LLC and The Mosaic Company filed as Exhibit 10 2 to the Current Report on Form 8 K of Mosaic dated September 30 2015 and filed on October 6 2015
Summarized financial information of 50 or less owned persons is included in Note 9 of Notes to Consolidated Financial Statements Financial statements and schedules are omitted as none of such persons are significant under the tests specified in Regulation S X under Article 3 09 of general instructions to the financial statements
Pursuant to the requirements of Section 13 or 15 d of the Securities Exchange Act of 1934 the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized
Pursuant to the requirements of the Securities Exchange Act of 1934 this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated
We produce and market concentrated phosphate and potash crop nutrients We conduct our business through wholly and majority owned subsidiaries as well as businesses in which we own less than a majority or a non controlling interest including consolidated variable interest entities and investments accounted for by the equity method
business segment owns and operates mines and production facilities in Florida which produce concentrated phosphate crop nutrients and phosphate based animal feed ingredients and processing plants in Louisiana which produce concentrated phosphate crop nutrients for sale domestically and internationally We have a 75 economic interest in the Miski Mayo Phosphate Mine
a joint venture to develop own and operate integrated phosphate production facilities in the Kingdom of Saudi Arabia On December 24 2024 we exchanged our ownership of MWSPC for shares of Saudi Arabian Mining Company
business segment owns and operates potash mines and production facilities in Canada and the U S which produce potash based crop nutrients animal feed ingredients and industrial products Potash sales include domestic and international sales We are a member of Canpotex Limited
business segment includes five phosphate rock mines four phosphate chemical plants and a potash mine in Brazil The segment also includes our distribution business in South America which consists of sales offices crop nutrient blending and bagging facilities port terminals and warehouses in Brazil and Paraguay We also have a majority interest in Fospar S A which owns and operates a single superphosphate granulation plant and a deep water port and throughput warehouse terminal facility in Brazil
Intersegment eliminations unrealized mark to market gains losses on derivatives the investment in equity securities of Ma aden debt expenses corporate functional costs and the results of the China and India distribution businesses are included within Corporate Eliminations and Other See Note 25 of the Consolidated Financial Statements in this Form 10 K for segment results
Our primary products phosphate and potash crop nutrients are to a large extent global commodities that are also available from a number of domestic and international competitors and are sold by negotiated contracts or by reference to published market prices The markets for our products are highly competitive and the most important competitive factor for our products is delivered price Business and economic conditions and governmental policies affecting the agricultural industry and customer sentiment are the most significant factors affecting worldwide demand for crop nutrients with the impact of demand for biofuels and batteries also playing an increasing role The profitability of our businesses is heavily influenced by worldwide supply and demand for our products which affects our sales prices and volumes Our costs per tonne to produce our products are also heavily influenced by fixed costs associated with owning and operating our major facilities significant raw material costs in our Phosphates and Mosaic Fertilizantes businesses water treatment costs in our Phosphates business and fluctuations in currency exchange rates
Our products are generally sold based on the market prices prevailing at the time the sales contract is signed or through contracts which are priced at the time of shipment Additionally in certain circumstances the final price of our products is determined after shipment based on the current market at the time the price is agreed to with the customer Forward sales programs at fixed prices increase the lag between prevailing market prices and our average realized selling prices The mix and parameters of these sales programs vary over time based on our marketing strategy which considers factors that include among others optimizing our production and operating efficiency within warehouse limitations as well as customer requirements The use of forward sales programs and the level of customer prepayments may vary from period to period due to changing supply and demand environments seasonality and market sentiments
World prices for the key raw material inputs for concentrated phosphate products including ammonia sulfur and phosphate rock have an effect on industry wide phosphate prices and production costs The primary feedstock for producing ammonia is natural gas The product price for ammonia is generally highly dependent on the supply and demand balance for ammonia In North America two thirds of our ammonia is sourced either through ammonia supply agreements or produced internally at our Faustina Louisiana location with the remaining one third purchased from various suppliers in the spot market We have agreements with various suppliers to ensure we have reliable sources of supply for ammonia to support competitive pricing in various market conditions In Brazil we purchase all our ammonia from a single supplier
Sulfur is a global commodity that is primarily produced as a by product of oil refining The market price is based primarily on the supply and demand balance for sulfur We believe our current and future investments in sulfur transformation and transportation assets will enhance our competitive advantage
We produce and procure most of our phosphate rock requirements through either wholly or partly owned mines In addition to producing phosphate rock Mosaic Fertilizantes purchases phosphate potash and nitrogen products which are either used to produce blended crop nutrients
Our per tonne selling prices for potash are affected by shifts in the product mix geography and customer mix Our Potash business is significantly affected by Canadian resource taxes that we pay to the Province of Saskatchewan and royalties we pay to mineral holders in order for us to mine and sell our potash products In addition cost of goods sold is affected by a number of factors including fluctuations in the Canadian dollar the level of periodic inflationary pressures on resources in western Canada where we produce most of our potash and natural gas costs for operating our potash solution mine at Belle Plaine Saskatchewan In the past we have also incurred operating costs to manage salt saturated brine inflows at our Esterhazy Saskatchewan K1 and K2 mine shafts which we closed in June 2021 due to an acceleration of brine inflows We have now transitioned mining to the K3 mine shaft which has replaced production from the K1 and K2 shafts
Our results of operations are also affected by changes in currency exchange rates due to our international footprint The most significant currency impacts are generally from the Canadian dollar and the Brazilian real
A discussion of these and other factors that affected our results of operations and financial condition for the periods covered by this Management s Discussion and Analysis of Financial Condition and Results of Operations is set forth in further detail below This Management s Discussion and Analysis of Financial Condition and Results of Operations should also be read in conjunction with the narrative description of our business in Item 1 and the risk factors described in Item 1A of Part I of this Annual Report on Form 10 K
This section of this Form 10 K discusses 2024 and 2023 items and year to year comparisons between 2024 and 2023 Discussions of 2022 items and year to year comparisons between 2023 and 2022 that are not included in this Form 10 K can be found in Management s Discussion and Analysis of Financial Condition and Results of Operations in Part II Item 7 of the Company s Form 10 K for the year ended December 31 2023 and are incorporated by reference herein
Throughout the discussion below we measure units of production sales and raw materials in metric tonnes which are the equivalent of 2 205 pounds unless we specifically state that we mean short or long ton s which are the equivalent of 2 000 pounds and 2 240 pounds respectively In addition we measure natural gas a raw material used in the production of our products in MM BTU which stands for one million British Thermal Units
One BTU is equivalent to 1 06 Joules Management uses the following metrics to monitor segment performance production volume sales volume average finished product selling price and average cost per unit consumed
Net earnings attributable to Mosaic for the year ended December 31 2024 were 174 9 million or 0 55 per diluted share compared to 1 2 billion or 3 50 per diluted share for 2023 driven by lower finished good sales pricing in our Potash and Mosaic Fertilizantes segments and lower sales volumes across our segments as discussed further below Net income for the year ended December 31 2024 was unfavorably impacted by a foreign currency transaction loss of 686 million compared to a foreign currency transaction gain of 194 million in the prior year period Current year net income benefited from a gain of 522 million on the sale of our equity investment in MWSPC as discussed further below
Significant factors that affected our results of operations and financial condition in 2024 and 2023 are listed below These factors are discussed in more detail in the following sections of this Management s Discussion and Analysis of Financial Condition and Results of Operations
In our Phosphates segment operating results for 2024 were unfavorable compared to the prior year due to lower finished goods sales volumes partially offset by higher average selling prices Sales volumes in the current year were unfavorably impacted by planned maintenance and turnaround activity at our sites as well as impacts from hurricanes Florida in the second half of the year Phosphate operating results were also unfavorably impacted by increased product costs due to our sales volumes including a larger proportion of purchased tonnes than the prior year We increased our purchases in 2024 to offset lost production in the first quarter from a fire at our Riverview Florida facility Average selling prices for the current year were favorable versus the prior year as prices have continued trending upwards since the third quarter of 2023 driven by strong demand in North America Operating results also benefited from lower raw material costs primarily sulfur compared to the prior year period
In our Potash segment operating results for 2024 were unfavorably impacted by lower global average selling prices resulting from improved global supply Operating results were also unfavorably impacted by lower sales volumes in the second half of the year resulting from production challenges in the third quarter due to electrical issues at two of our mines and supply chain delays caused by the port strike in Vancouver Canada
In our Mosaic Fertilizantes segment operating results for 2024 were unfavorably impacted by a decrease in average selling prices compared to the prior year period Sales prices of potash and nitrogen in Brazil decreased as global supply improved Sales volumes were down compared to the prior year period as a result of our decision to prioritize sales to lower credit risk customers and to focus on obtaining improved gross margin over sales volumes
In April 2024 we entered into an agreement with Ma aden to exchange our 25 ownership of the Ma aden Wa ad al Shamal Phosphate Company for 111 012 433 shares of Ma aden The transaction closed on December 24 2024 at a value of approximately 1 5 billion resulting in a pre tax gain of approximately 0 5 billion The shares are reflected in Equity Securities and Investments in Nonconsolidated Companies in our Consolidated Balance Sheet at December 31 2024
In February 2025 the U S imposed tariff increases on imports from several countries including a 25 tariff on most imports from Canada including potash Subsequently the implementation of these tariffs has been paused for 30 days following an agreement between the U S and Canada At this time we do not expect these tariffs to have a significant impact on our Potash business and operating results
For the year ended December 31 2023 operating results in all of our segments were impacted by lower average sales prices compared to the prior year Global markets softened compared to the prior year with a rebound in supply combined with buyers delaying purchases in the first half of the year in anticipation of lower prices Buyer deferral reversed in the later part of 2023 and we saw seasonal price strength in many markets
In the Phosphates segment operating results for 2023 were driven by lower average selling prices partially offset by lower raw material costs and higher sales volumes compared to the prior year Selling prices decreased due to the factors described above and were partially offset by lower raw material costs primarily sulfur and ammonia due to global supply and demand Finished product sales volumes were favorable versus the prior year driven by buyers deferring purchases in the prior year period in anticipation of lower sales prices
In the Potash segment 2023 operating results were unfavorably impacted by lower average selling prices of potash compared to the prior year period driven by the factors discussed above This was partially offset by higher sales volumes driven by the factor discussed above Operating results for 2023 were also unfavorably impacted by higher idle plant and maintenance turnaround costs due to the temporary idling of our Colonsay Saskatchewan mine in the first half of the year due to market conditions and the length of turnarounds compared to the prior year
In the Mosaic Fertilizantes segment 2023 results were unfavorably impacted by a decrease in average selling prices compared to the prior year period driven by the factors discussed above Sales volumes of finished goods including performance products were higher in 2023 compared to the same period in the prior year due to an increased customer base as a result of our growth strategy to expand our presence in Brazil Results were also favorably impacted by a decrease in product costs for our distribution business and lower sulfur and ammonia costs in our production business
The Phosphates segment s net sales were 4 5 billion for the year ended December 31 2024 compared to 4 7 billion for the same period a year ago The decrease in net sales was primarily due to lower finished goods sales volumes which unfavorably impacted net sales by approximately 310 million In addition Miski Mayo operations had an unfavorable impact of approximately 40 million compared to the prior year period due to lower selling prices These impacts were partially offset by approximately 150 million due to higher finished product selling prices in the year current period
Our average finished product selling price increased 4 to 672 per tonne for the year ended December 31 2024 compared to 646 per tonne for the same period a year ago due to the factor discussed in the Overview
The Phosphates segment s sales volumes of finished products decreased to 6 4 million tonnes for the year ended December 31 2024 compared to 7 0 million tonnes in 2023 due to the production challenges discussed in the Overview
Gross margin for the Phosphates segment decreased to 594 0 million in the current year compared with 702 1 million for the prior year Gross margin was unfavorably impacted by lower finished goods sales volumes which unfavorably impacted gross margin by approximately 130 million higher conversion of approximately 80 million and higher blended rock costs of approximately 70 million The current year gross margin was also unfavorably impacted by approximately 40 million
related to selling a higher proportion of purchased tonnes compared to the prior year period higher idle costs of approximately 40 million primarily due to impacts from Hurricane Milton and higher freight costs of approximately 10 million In addition Miski Mayo gross margin was approximately 30 million lower than the prior year primarily due to a decrease in selling prices These impacts were partially offset by favorable impacts from higher finished goods selling prices of approximately 150 million and lower raw material costs primarily sulfur as discussed below of approximately 150 million
Our average consumed price for ammonia in our North American operations increased to 435 per tonne in 2024 from 426 a year ago The average consumed price for sulfur for our North American operations decreased to 132 per long ton for the year ended December 31 2024 from 181 in the prior year period The purchase price of these raw materials is driven by global supply and demand The consumed ammonia and sulfur prices also include transportation transformation and storage costs
The average consumed cost of purchased and produced rock increased to 85 per tonne in the current year from 75 a year ago For the year ended December 31 2024 our North American phosphate rock production decreased slightly to 9 0 million tonnes from 9 1 million tonnes in the prior year
The Phosphates segment s production of crop nutrient dry concentrates and animal feed ingredients decreased to 6 3 million tonnes from 6 6 million in the prior year For the year ended December 31 2024 our operating rate for processed phosphate production decreased slightly to 64 compared to 65 in the same period of the prior year
The Potash segment s net sales decreased to 2 4 billion for the year ended December 31 2024 compared to 3 2 billion in the prior year Lower average selling prices had an unfavorable impact on net sales of approximately 760 million versus the prior year period Net sales were also unfavorably impacted by approximately 70 million due to lower finished goods sales volumes compared to the prior period
Our average finished product selling price was 273 per tonne for the year ended December 31 2024 a decrease of 92 per tonne compared with the prior year period due to the factor discussed in the Overview
The Potash segment s sales volumes decreased to 8 7 million tonnes for the year ended December 31 2024 compared to 8 9 million tonnes in the same period a year ago due to the factors discussed in the Overview
Gross margin for the Potash segment decreased to 643 2 million in the current year from 1 2 billion in the prior year period Gross margin was unfavorably impacted by approximately 760 million due to the decrease in average selling prices and approximately 50 million due to lower sales volumes This was partially offset by lower Canadian resource taxes of approximately 170 million in the current year period as discussed below Gross margin was also favorably impacted by approximately 40 million due to lower idle and maintenance turnaround costs in the current year period due to the timing of turnarounds In addition gross margin was favorably impacted by lower conversion costs of approximately 30 million
We had expense of 232 2 million from Canadian resource taxes for the year ended December 31 2024 compared to 403 4 million in the prior year Royalty expense also decreased to 40 5 million for the year ended December 31 2024 from 53 6 million in the prior year The fluctuations in Canadian resource taxes and royalties are due to lower sales volumes average selling prices and margins in the current year compared to the prior year
For the year ended December 31 2024 potash production increased to 8 8 million tonnes compared to 8 2 million tonnes in the prior year period resulting in an operating rate of 76 for 2024 compared to 73 for 2023 The increased operating rate in the current year period reflects higher production across our Canadian mines due to less maintenance downtime at our
Esterhazy and Belle Plaine locations and our Colonsay mine operating for a portion of the current year period Prior year production was impacted by maintenance downtime during the first half of the year
The Mosaic Fertilizantes segment s net sales were 4 4 billion for the year ended December 31 2024 compared to 5 7 billion for 2023 In the current period net sales were unfavorably impacted by approximately 870 million of lower finished goods sales prices and by approximately 350 million of lower finished goods sales volumes This was partially offset by a 20 million favorable impact from sales of other products primarily sulfuric acid
The Mosaic Fertilizantes segment s sales volume decreased to 9 0 million tonnes for the year ended December 31 2024 compared to 9 7 million tonnes for the prior year period due to the change in strategic focus discussed in the Overview
Gross margin for the Mosaic Fertilizantes segment increased to 406 6 million for the year ended December 31 2024 from 211 6 million in the prior year The increase in gross margin was primarily due to the focus on obtaining margin over sales volume as discussed in the Overview and lower costs which had a favorable impact of 1 13 billion driven by a decrease in product costs for our distribution business and lower sulfur and ammonia costs in our production business This was partially offset by approximately 870 million related to the decrease in average selling prices during the current year period and approximately 40 million due to lower sales volumes in the current year period
The average consumed price for ammonia for our Brazilian operations was 627 per tonne for the year ended December 31 2024 compared to 807 per tonne in the prior year The average consumed sulfur price for our Brazilian operations was 173 per long tonne for the year ended December 31 2024 compared to 232 in the prior year The purchase prices of these raw materials are driven by global supply and demand and include transportation transformation and storage costs
The Mosaic Fertilizantes segment s production of crop nutrient dry concentrates and animal feed ingredients increased 1 compared to the prior year For the year ended December 31 2024 our phosphate operating rate was 78 compared to 77 in the prior year
In addition to our three operating segments we assign certain costs to Corporate Eliminations and Other which is presented separately in Note 25 of our Notes to Consolidated Financial Statements The Corporate Eliminations and Other category includes intersegment eliminations including profit on intersegment sales unrealized mark to market gains and losses on derivatives and the investment in equity securities of Ma aden debt expenses corporate functional costs and the results of the China and India distribution businesses
Gross margin for Corporate Eliminations and Other was a loss of 131 9 million for the year ended December 31 2024 compared to a gain of 81 9 million in the same period a year ago Gross margin was unfavorably impacted by higher elimination of profit on intersegment sales in the current year period of approximately 139 million compared to the prior year Gross margin was also unfavorably impacted by a 101 million net unrealized loss on derivatives in the current year period primarily foreign currency derivatives compared to a 29 million net unrealized gain in the prior year period Distribution operations in India and China had revenues and gross margin of 519 6 million and 39 7 million respectively for the year ended December 31 2024 compared to revenues and gross margin of 898 9 million and 16 8 million respectively for the year ended December 31 2023 China and India gross margin was favorably impacted by lower product costs in the current year period compared to the prior year This was partially offset by the impact of lower selling prices compared to the prior year period
Selling general and administrative expenses were 496 9 million for the year ended December 31 2024 compared to 500 5 million for the same period a year ago The decrease was primarily due to approximately 20 million of lower consulting and professional services and lower compensation and other employee related costs of approximately 15 million in the current year period This was largely offset by approximately 30 million of bad debt reserve in our Mosaic Fertilizantes segment
Other operating expenses were 393 5 million for the year ended December 31 2024 compared to 372 0 million for the prior year period Other operating expenses typically relate to five major categories 1 AROs 2 environmental and legal reserves 3 idle facility costs 4 insurance reimbursements and 5 gain loss on sale or disposal of fixed assets The change from the prior year was primarily due to an arbitration reserve of approximately 52 million in the current year Other operating expense was also impacted by lower estimated closure costs for our asset retirement obligations
at our closed facilities which were approximately 53 million lower than the prior year In addition environmental reserves in our Phosphates segment were lower compared to the prior year by approximately 13 million The prior year included a gain on the sale of the Streamsong Resort of approximately 57 million
Net interest expense increased to 182 8 million for the year ended December 31 2024 compared to 129 4 million in 2023 The increase was primarily due to higher short term debt levels in the current year period and lower interest income The prior year included approximately 10 million on tax credit refunds from our Brazilian subsidiaries
In 2024 we recorded a foreign currency transaction loss of 685 8 million compared to a gain of 194 0 million in 2023 The loss was the result of the effect of the strengthening of the U S dollar relative to the Brazilian real on intercompany loans and U S dollar denominated payables held by our Brazilian subsidiaries and the impact of the U S dollar relative to the Canadian dollar on intercompany loans Our reported foreign currency gains and losses are often non cash in nature because they are related to intercompany transactions
On December 24 2024 we exchanged our 25 ownership of MWSPC for 111 012 433 shares of Ma aden at a value of approximately 1 5 billion resulting in a pre tax gain net of expenses of 522 2 million See further discussion of this transaction in Note 9 of our Notes to Consolidated Financial Statements
For the year ended December 31 2024 we had other income of 40 3 million compared to expense of 76 8 million in the prior year The change from the prior year is primarily due to an unrealized gain of approximately 28 million related to our investment in shares of Ma aden being marked to market at period end In the current year we had a gain of approximately 8 million on the finalization of amounts related to the 2023 termination of a pension plan compared to a settlement loss of approximately 42 million in the prior year We also had a realized gain on the marketable securities held in the RCRA Trusts of approximately 2 million compared to a loss of 19 million in the prior year
For all years our income tax is impacted by the mix of earnings across jurisdictions in which we operate by a benefit associated with depletion and by the impact of certain entities being taxed in both their foreign jurisdiction and the U S including foreign tax credits for various taxes incurred
For the year ended December 31 2024 tax expense specific to the period included a net expense of 125 9 million The net expense relates to the following 99 9 million related to the impact of accruing withholding tax expense on expected foreign distributions associated with changes in management s indefinite reinvestment assertion on select foreign earnings under ASC 740 30 formerly APB 23 7 1 million related to true up of estimates from our U S and non U S tax return provisions 24 2 million related to changes to valuation allowances in Brazil the Netherlands and the U S 4 0 million related to share based excess benefit 2 5 million related to changes in tax rates and 6 2 million related to other
For the year ended December 31 2024 we had a gain from equity of nonconsolidated companies of 73 3 million net of tax compared to a gain of 60 3 million net of tax for the prior year These results were primarily related to the operations of MWSPC
We prepare our Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America which requires us to make various judgments estimates and assumptions that could have a significant impact on our reported results and disclosures We base these estimates on historical experience and other assumptions we believe to be reasonable at the time we prepare our financial statements Changes in these estimates could have a material effect on our Consolidated Financial Statements
Our significant accounting policies can be found in Note 2 of our Notes to Consolidated Financial Statements We believe the following accounting policies include a higher degree of judgment and complexity in their application and are most critical to aid in fully understanding and evaluating our reported financial condition and results of operations
Goodwill is the excess of the purchase price consideration over the estimated fair value of net assets of acquired businesses The carrying value of goodwill in our reporting units is tested annually as of October 31 for possible impairment We typically use an income approach valuation model representing present value of future cash flows to determine the fair value of a reporting unit Growth rates for sales and profits are determined using inputs from our annual strategic and long range planning process The rates used to discount projected future cash flows reflect a weighted average cost of capital based on the Company s industry capital structure and risk premiums including those reflected in the current market capitalization When preparing these estimates management considers each reporting unit s historical results current operating trends and specific plans in place These estimates are impacted by various factors including inflation the general health of the economy and market competition In addition events and circumstances that might be indicators of possible impairment are assessed during other interim periods As of October 31 2024 the date of our annual impairment testing the Company concluded that the fair values of the reporting units which include goodwill Potash Mosaic Fertilizantes and Corporate Eliminations and Other were in substantial excess of their respective carrying values and the goodwill for those units was not impaired
See Note 10 of our Notes to Consolidated Financial Statements for additional information regarding the goodwill impairment analysis including the methodologies and assumptions used in estimating the fair values of our reporting units As of December 31 2024 we had 1 1 billion of goodwill
Contingent environmental liabilities are described in Note 23 of our Notes to Consolidated Financial Statements Accruals for environmental matters are based primarily on third party estimates for the cost of remediation at previously operated sites and estimates of legal costs for ongoing environmental litigation We regularly assess the likelihood of material adverse judgments or outcomes and the effects of potential indemnification as well as potential ranges or probability of losses We determine the amount of accruals required if any for contingencies after carefully analyzing each individual matter Estimating the ultimate settlement of environmental matters requires us to develop complex and interrelated assumptions based on experience with similar matters our history precedents evidence and facts specific to each matter Actual costs incurred in future periods may vary from the estimates given the inherent uncertainties in evaluating environmental exposures As of December 31 2024 and 2023 we had accrued 197 5 million and 203 2 million respectively for environmental matters
As indicated in Note 14 of our Notes to Consolidated Financial Statements we recognize AROs in the period in which we have an existing legal obligation and the amount of the liability can be reasonably estimated We utilize internal engineering experts as well as third party consultants to assist in determining the costs of retiring certain of our long term operating assets Assumptions and estimates reflect our historical experience and our best judgments regarding future expenditures The assumed costs are inflated based on an estimated inflation factor and discounted based on a credit adjusted risk free rate For active facilities fluctuations in the estimated costs including those resulting from a change in environmental regulations inflation rates and discount rates can have a significant impact on the corresponding assets and liabilities recorded in the Consolidated Balance Sheets However changes in the assumptions for our active facilities would not have a significant impact on the Consolidated Statements of Earnings in the year they are identified For closed facilities fluctuations in the estimated costs inflation and discount rates have an impact on the Consolidated Statements of Earnings in the year they are identified as there is no asset related to these items Phosphate land reclamation activities in North America generally occur concurrently with mining operations as such we accrue and expense reclamation costs as we mine In addition we regularly perform post mining evaluations to ensure we have established a sufficient liability to meet permitting requirements As of December 31 2024 and 2023 2 6 billion and 2 2 billion respectively was accrued for AROs including both current and noncurrent amounts in North and South America In August 2016 Mosaic deposited 630 million into two trust funds as financial assurance to support certain estimated future AROs See Note 14 of our Notes to Consolidated Financial Statements for additional information regarding the Environmental Protection Agency
A valuation allowance is provided for deferred tax assets for which it is more likely than not that the related tax benefits will not be realized Significant judgment is required in evaluating the need for and magnitude of appropriate valuation allowances The realization of the Company s deferred tax assets specifically the evaluation of net operating loss carryforwards and foreign tax credit carryforwards is dependent on generating certain types of future taxable income using both historical and projected future operating results the source of future income the reversal of existing taxable temporary differences taxable income in prior carry back years if permitted and the availability of tax planning strategies As of December 31 2024 and 2023 we had a valuation allowance of 1 5 billion and 1 4 billion respectively Changes in tax laws assumptions with respect to future taxable income tax planning strategies resolution of matters under tax audit and foreign currency exchange rates could result in adjustment to these allowances
Due to Mosaic s global operations we assess uncertainties and judgments in the application of complex tax regulations in a multitude of jurisdictions Future changes in judgment related to the expected ultimate resolution of uncertain tax positions will affect earnings in the quarter of such change While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position our liabilities for income taxes reflect what we believe to be the more likely than not outcome We adjust these liabilities as well as the related interest in light of changing facts and circumstances including negotiations with taxing authorities in various jurisdictions outcomes of tax litigation and resolution of disputes arising from tax audits in the normal course of business Settlement of any particular position may require the use of cash Based upon an analysis of tax positions taken on prior year returns and expected positions to be taken on the current year return management has identified gross uncertain income tax positions of 14 2 million as of December 31 2024
Any dividends from controlled foreign corporations are tax free from a U S income tax perspective Additionally there will not be any foreign tax credits associated with foreign non branch dividends Therefore there are no material federal U S implications of future repatriations on non U S subsidiaries undistributed earnings However since there are no U S foreign tax credits associated with foreign dividends any foreign withholding tax associated with a future repatriation will need to be accrued if the earnings are not permanently reinvested
We define liquidity as the ability to generate or access adequate amounts of cash to meet current cash needs We remain committed to a disciplined capital allocation strategy and assess our liquidity in terms of our ability to fund working capital requirements fund sustaining and opportunistic capital projects pursue strategic opportunities and make capital management decisions which include making payments on and issuing indebtedness and making distributions to our stockholders either
We have a target liquidity buffer of up to 3 0 billion including cash and available credit facilities We expect our liquidity to fluctuate from time to time especially in the first quarter of each year to manage through the seasonality of our business We also target debt leverage ratios that are consistent with investment grade credit metrics Our capital allocation priorities include maintaining our target investment grade metrics and financial strength sustaining our assets including ensuring the safety and reliability of our assets investing to grow our business either through organic growth or taking advantage of strategic opportunities and returning excess cash to stockholders including paying our dividend During 2024 we returned capital to our stockholders through share repurchases of 235 4 million and by paying dividends of 270 7 million
As of December 31 2024 we had cash and cash equivalents of 272 8 million marketable securities held in trusts to fund future obligations of 695 2 million long term debt including current maturities of 3 4 billion short term debt of 847 1 million and stockholders equity of 11 6 billion In addition we had 402 3 million of commercial arrangements for certain customer purchases in Brazil through structured payable arrangements as discussed in Note 11 of our Notes to Consolidated Financial Statements
All of our cash and cash equivalents are diversified in highly rated investment vehicles Our cash and cash equivalents are held either in the U S or held by non U S subsidiaries and are not subject to significant foreign currency exposures as the majority are held in investments denominated in U S dollars as of December 31 2024 These funds may create foreign currency transaction gains or losses however depending on the functional currency of the entity holding the cash In addition there are no significant restrictions that would preclude us from bringing funds held by non U S subsidiaries back to the U S aside from withholding taxes
As of December 31 2024 we had cash and cash equivalents and restricted cash of 272 8 million Funds generated by operating activities available cash and cash equivalents and our revolving credit facility continue to be our most significant sources of liquidity We believe funds generated from the expected results of operations and available cash cash equivalents and borrowings either under our revolving credit facility or through long term borrowings will be sufficient to finance our operations including our expansion plans existing strategic initiatives and expected dividend payments for the foreseeable future We expect our capital expenditures to be approximately 1 3 billion in 2025 There can be no assurance however that we will continue to generate cash flows at or above current levels At December 31 2024 we had 2 5 billion available under our 2 5 billion revolving credit facility See Note 11 of our Notes to Consolidated Financial Statements for additional information relating to our financing arrangements which is hereby incorporated by reference
We have certain contractual obligations that require us to make cash payments on a scheduled basis These include among other things long term debt payments interest payments operating leases unconditional purchase obligations and funding requirements of pension and postretirement obligations Our long term debt has maturities ranging from one year to 19 years Unconditional purchase obligations are our largest contractual cash obligations These include obligations for contracts to purchase raw materials such as sulfur ammonia phosphate rock and natural gas obligations to purchase raw materials for our international distribution activities and maintenance and services Other large cash obligations are our AROs and other environmental obligations primarily related to our Phosphates and Mosaic Fertilizantes segments We expect to fund our AROs and other environmental obligations purchase obligations long term debt and capital expenditures with a combination of operating cash flows cash and cash equivalents and borrowings
The 2025 pension plan payments are based on minimum funding requirements For years thereafter pension plan payments are based on expected benefits paid The postretirement plan payments are based on projected benefit payments The above amounts include our North America and Brazil plans
The following table represents a comparison of the net cash provided by operating activities net cash used in investing activities and net cash used in financing activities for calendar years 2024 2023 and 2022
In 2024 net cash flow from operating activities provided us with a significant source of liquidity For the year ended December 31 2024 net cash provided by operating activities was 1 3 billion compared to 2 4 billion in the prior year Our results of operations after non cash adjustments to net earnings contributed 1 3 billion to cash flows from operating activities during 2024 compared to 2 0 billion during 2023 During 2024 we had a favorable change in assets and liabilities of 21 1 million compared to 401 7 million in 2023
The change in assets and liabilities for the year ended December 31 2024 was primarily driven by unfavorable changes in inventories of 275 6 million and other current and long term assets of 79 2 million These changes were mostly offset by favorable impacts from changes in accounts payable and accrued liabilities of 96 4 million and other noncurrent liabilities of 220 3 million The change in inventories was driven primarily by an increase in inventory volumes in Brazil The change in other current and noncurrent assets was primarily due to an increase in supplier prepayments and cloud computing costs in the current year The increase in accounts payable and accrued liabilities was primarily driven by the timing of payments The increase in other noncurrent liabilities was primarily due to an increase in environmental reserves in the current year
Net cash used in financing activities was 131 9 million for the year ended December 31 2024 compared to 1 5 billion in the prior year In 2024 we made paid dividends of 302 6 million and made repurchases of our common stock for 235 4 million We also made net payments on our long term debt of 3 1 million and had net payments on structured accounts payable of 17 7 million In 2024 we received net proceeds from short term borrowings of 253 2 million
See Note 11 and Note 16 of our Notes to Consolidated Financial Statements for additional information relating to our financing arrangements and fair value measurements which is hereby incorporated by reference
In addition to various operational and environmental regulations primarily related to our Phosphates segment we incur liabilities for reclamation activities under which we are subject to financial assurance requirements In various jurisdictions in which we operate particularly Florida and Louisiana we are required to pass a financial strength test or provide credit support typically in the form of cash deposits surety bonds or letters of credit See Other Commercial Commitments under Off Balance Sheet Arrangements and Obligations and Note 22 of our Notes to Consolidated Financial Statements for additional information about these requirements which is hereby incorporated by reference
any obligation including a contingent obligation under a contract that would be accounted for as derivative instruments except that it is both indexed to the registrant s own stock and classified as equity and
any obligation arising out of a variable interest in an unconsolidated entity that is held by and material to the registrant where such entity provides financing liquidity market risk or credit risk support to the registrant or engages in leasing hedging or research and development services with the registrant
Information regarding guarantees that meet the above requirements is included in Note 17 of our Notes to Consolidated Financial Statements and is hereby incorporated by reference We do not have any contingent interest in assets transferred derivative instruments or variable interest entities that qualify as off balance sheet arrangements under SEC rules
The surety bonds and letters of credit generally expire within one year or less but a substantial portion of these instruments provide financial assurance for continuing obligations and therefore in most cases must be renewed on an annual basis We issue letters of credit through our revolving credit facility and bilateral agreements As of December 31 2024 we had no outstanding letters of credit through our credit facility and 63 8 million outstanding through bilateral agreements We primarily incur liabilities for reclamation activities in our Florida operations and for phosphogypsum management system
closure in our Florida and Louisiana operations where for permitting purposes we must either pass a test of financial strength or provide credit support typically in the form of cash deposits surety bonds or letters of credit As of December 31 2024 we had 411 8 million in surety bonds and a 50 million letter of credit included in the total amount above These bonds and letters of credit are outstanding for reclamation obligations primarily related to mining in Florida We also have a surety bond of 327 1 million with the EPA which was delivered as a substitute for the financial assurance provided through a trust the
We are subject to financial assurance requirements related to the closure and post closure care of our Gypstacks in Florida and Louisiana These requirements include Florida and Louisiana state financial assurance regulations and financial assurance requirements under the terms of consent decrees that we have entered into with respect to our facilities in Florida and Louisiana These include a consent decree the
with federal and state regulators that include financial assurance requirements for the closure and post closure care of substantially all of our Gypstacks in Florida and Louisiana other than those acquired as part of the CF Phosphate Assets Acquisition which are discussed separately below
See Note 14 of our Notes to Consolidated Financial Statements for additional information relating to our financial assurance obligations including the Plant City Consent Decree and the 2015 Consent Decrees which information is incorporated by reference
Currently state financial assurance requirements in Florida and Louisiana for the closure and post closure care of Gypstacks are in general terms based upon the same assumptions and associated estimated values as the AROs recognized for financial reporting purposes For financial reporting purposes we recognize the AROs based on the estimated future closure and post closure costs of Gypstacks the undiscounted value of our North America Gypstacks is approximately 3 0 billion The value of the AROs for closure and post closure care of our North America Gypstacks discounted to the present value based on a credit adjusted risk free rate is reflected on our Consolidated Balance Sheets in the amount of approximately 1 5 billion as of December 31 2024 Compliance with the financial assurance requirements in Florida and Louisiana is generally based on the undiscounted Gypstack closure estimates
We satisfy substantially all of our Florida Louisiana and federal financial assurance requirements through compliance with the financial assurance requirements under the 2015 Consent Decrees by providing third party credit support in the form of surety bonds including under the Plant City Consent Decree and a financial test mechanism supported by a corporate guarantee
as discussed below We comply with our remaining state financial assurance requirements because our financial strength permits us to meet applicable financial strength tests There have been times in the past that we have not met the applicable financial strength tests and there can be no assurance that we will be able to meet the applicable financial strength tests in the future In the event we do not meet either financial strength test we could be required to seek an alternate financial strength test acceptable to state regulatory authorities or provide credit support which may include surety bonds letters of credit and cash escrows or trust funds Cash escrows or trust funds would be classified as restricted cash on our
Consolidated Balance Sheets Assuming we maintain our current levels of liquidity and capital resources we do not expect that these Florida and Louisiana requirements will have a material effect on our results of operations liquidity or capital resources
at both the Plant City Facility and the Bonnie Facility Associated with these assets are two related financial assurance arrangements for which we became responsible and that provided sources of funds for the estimated Gypstack Closure Costs for these facilities pursuant to federal or state law which the government can draw against in the event we cannot perform such closure activities One was initially the Plant City Trust established to meet the requirements under a consent decree with EPA and the FDEP with respect to U S Resource Conservation and Recovery Act
compliance at Plant City that also satisfied Florida financial assurance requirements at that site Beginning in September 2016 as a substitute for the financial assurance provided through the Plant City Trust we have provided financial assurance for Plant City in the form of a surety bond delivered to EPA the
established to meet the requirements under Florida financial assurance regulations that apply to the Bonnie Facility On July 27 2018 we received 21 0 million from the Bonnie Facility Trust by substituting the trust fund for the Bonnie Financial Test supported by a corporate guarantee as allowed by state regulations Both financial assurance funding obligations require estimates of future expenditures that could be impacted by refinements in scope technological developments new information cost inflation changes in regulations discount rates and the timing of activities Under our current approach to satisfying applicable requirements additional financial assurance would be required in the future if increases in cost estimates exceed the face amount of the Plant City Bond or the amount supported by the Bonnie Financial Test
Represents the undiscounted estimated cash outflows required to settle the AROs For the Potash segment this excludes the subsequent years of tailings area management for activities such as dissolution and reclamation of land which are estimated to require an additional 161 to 391 years until completion The corresponding present value of all future expenditures is 2 6 billion as of December 31 2024 and is reflected in our accrued liabilities and other noncurrent liabilities in our Consolidated Balance Sheets
Most of our export sales of potash crop nutrients are marketed through a North American export association Canpotex which funds its operations in part through third party financing facilities As a member Mosaic and our subsidiaries are subject to certain conditions and exceptions and contractually obligated to reimburse Canpotex for their pro rata share of any operating expenses or other liabilities incurred The reimbursements are made through reductions to members cash receipts from Canpotex
Gross uncertain tax positions as of December 31 2024 of 14 2 million are not included in the other long term obligations table presented above because the timing of the settlement of unrecognized tax benefits cannot be reasonably determined For further discussion refer to Note 13 of our Notes to Consolidated Financial Statements
We are exposed to the impact of fluctuations in the relative value of currencies fluctuations in interest rates fluctuations in the purchase prices of natural gas nitrogen ammonia and sulfur consumed in operations and changes in freight costs as well as changes in the market value of our financial instruments We periodically enter into derivatives in order to mitigate our
interest rate risks foreign currency risks and the effects of changing commodity prices and freight prices but not for speculative purposes Unrealized mark to market gains and losses on derivatives are recorded in Corporate Eliminations and Other Once realized they are recorded in the related business segment
Due to the global nature of our operations we are exposed to currency exchange rate changes which may cause fluctuations in our earnings and cash flows Our primary foreign currency exposures are the Canadian dollar and Brazilian real To reduce economic risk and volatility on expected cash flows that are denominated in the Canadian dollar and Brazilian real we use financial instruments that may include forward contracts zero cost collars and or futures
The functional currency of several of our Canadian entities is the Canadian dollar For those entities sales are primarily denominated in U S dollars but the costs are paid principally in Canadian dollars We generally enter into derivative instruments for a portion of the currency risk exposure on anticipated cash inflows and outflows including outflows for capital expenditures denominated in Canadian dollars Mosaic hedges cash flows on a declining basis up to 18 months for the Canadian dollar A stronger Canadian dollar generally reduces these entities operating earnings A weaker Canadian dollar has the opposite effect Depending on the underlying exposure such derivatives can create additional earnings volatility because we do not apply hedge accounting Gains or losses on these derivative contracts both for open contracts at quarter end unrealized and settled contracts realized are recorded in either cost of goods sold or foreign currency transaction gain loss
The functional currency for our Brazilian subsidiaries is the Brazilian real We finance our Brazilian inventory purchases with U S dollar denominated liabilities We hedge a portion of cash flows on a declining basis up to 12 months for the Brazilian real A stronger Brazilian real relative to the U S dollar has the impact of reducing these liabilities on a functional currency basis When this occurs an associated foreign currency transaction gain is recorded as non operating income A weaker Brazilian real generally has the opposite effect We also enter into derivative instruments for a portion of our currency risk exposure on anticipated Brazilian real cash flows and record an associated gain or loss in either cost of goods sold or foreign currency transaction gain loss line in the Consolidated Statements of Earnings A stronger Brazilian real generally reduces our Brazilian subsidiaries operating earnings A weaker Brazilian real has the opposite effect
As discussed above we have Canadian dollar Brazilian real and other foreign currency exchange contracts As of December 31 2024 and 2023 the fair value of our major foreign currency exchange contracts was an asset of 82 6 million and a liability of 28 4 million respectively We recorded an unrealized loss of 108 0 million in cost of goods sold and recorded an unrealized loss of 2 1 million in foreign currency transaction gain loss in the Consolidated Statements of Earnings for 2024
As of December 31 2024 and 2023 the fair value of our major commodities contracts was 1 8 million and 10 3 million respectively We recorded an unrealized gain of 7 2 million in cost of goods sold in the Consolidated Statements of Earnings for 2024
From time to time we enter into interest rate swap agreements to hedge our exposure to changes in future interest rates related to anticipated debt issuances At December 31 2024 and 2023 we had no interest rate swap agreements in effect
Overall there have been no material changes in our primary market risk exposures since the prior year In 2025 we do not expect any material changes in our primary risk exposures Additional information about market risk associated with our investments held in the RCRA Trusts is provided in Note 12 of our Notes to Consolidated Financial Statements For additional information related to derivatives see Notes 15 and 16 of our Notes to Consolidated Financial Statements
policies that govern the production distribution and use of crop nutrients and animal feed ingredients These EHS standards regulate or propose to regulate i conduct of mining production and supply chain operations including employee safety and facility security procedures ii management or remediation of potential impacts to air soil and water quality from our operations iii disposal of waste materials iv beneficial use of co products and residuals v reclamation of lands after mining vi management and handling of raw materials vii product content and viii use of products by both us and our customers
We have a comprehensive EHS management program that seeks to achieve sustainable predictable and verifiable EHS performance Key elements of our EHS program include i identifying and managing EHS risk ii complying with legal requirements iii improving our EHS procedures and protocols iv educating employees regarding EHS obligations v retaining and developing professional qualified EHS staff vi evaluating facility conditions vii evaluating and enhancing safe workplace behaviors viii performing audits ix formulating EHS action plans and x assuring accountability of all managers and other employees for EHS performance Our business units are responsible for implementing day to day elements of our EHS program assisted by integrated EHS professionals We conduct audits to verify that each facility has identified risks achieved regulatory compliance improved EHS performance and incorporated EHS management systems into day to day business functions
New or proposed regulatory programs or policies can present significant challenges in ascertaining future compliance obligations implementing compliance plans and estimating future costs until implementing regulations are finalized and definitive regulatory interpretations are adopted New or proposed regulatory standards may require modifications to our facilities or to operating procedures and these modifications may involve significant capital costs or increases in operating costs For example the Company is monitoring recently enacted standards in the European Union and California on climate change disclosure and is taking steps to address those new requirements
We have expended and anticipate that we will continue to expend substantial financial and managerial resources to comply with EHS standards and to continue to improve our environmental stewardship In 2025 excluding capital expenditures arising out of the consent decrees referred to under EPA RCRA Initiative in Note 14 of our Notes to Consolidated Financial Statements we expect environmental capital expenditures to total approximately 480 million primarily related to
i modification or construction of waste management infrastructure and water treatment systems ii construction and modification projects associated with Gypstacks and clay settling ponds at our Phosphates facilities and tailings management areas for our Potash mining and processing facilities iii upgrading or new construction of air pollution control equipment at some of the concentrates plants and iv capital projects associated with remediation of contamination at current or former operations Additional expenditures for land reclamation Gypstack closure and water treatment activities are expected to total approximately 275 million in 2025 In 2026 we estimate environmental capital expenditures will be approximately 465 million and expenditures for land reclamation activities Gypstack closure and water treatment activities are expected to be approximately 215 million We spent approximately 545 million and 470 million for the years ended December 31 2024 and 2023 respectively for environmental capital expenditures land reclamation activities Gypstack closure and water treatment activities No assurance can be given that greater than anticipated EHS capital expenditures or land reclamation Gypstack closure or water treatment expenditures will not be required in 2025 or in the future
We hold numerous environmental mining and other permits and approvals authorizing operations at our facilities Our ability to continue operations at a facility could be materially affected by a government agency decision to deny or delay issuing a new or renewed permit or approval to revoke or substantially modify an existing permit or approval or to substantially change conditions applicable to a permit modification or by legal actions that successfully challenge our permits
Expanding our operations or extending operations into new areas is also predicated upon securing the necessary environmental or other permits or approvals We have been engaged in and over the next several years will be continuing efforts to obtain permits in support of our planned Florida operations at certain of our properties For years we have successfully permitted properties and anticipate that we will be able to permit these properties as well
A denial of our permits the issuance of permits with cost prohibitive conditions substantial delays in issuing key permits legal actions that prevent us from relying on permits or revocation of permits can prevent or delay our mining or operations at the affected properties and thereby materially affect our business results of operations liquidity or financial condition
In addition in the U S local stakeholder involvement has become an increasingly important factor in the permitting process for companies like ours and various counties and other parties particularly in Florida have in the past filed and continue to file lawsuits or administrative appeals challenging the issuance of some of the permits we require These actions can significantly delay permit issuance Additional information regarding certain potential or pending permit challenges is provided in Note 23 to our Consolidated Financial Statements and is incorporated herein by reference
authorizes federal jurisdiction over navigable waters defined in the Act as waters of the United States and often abbreviated as WOTUS As it relates to Mosaic s operations and facilities the scope of the term WOTUS dictates legal requirements for our national pollutant discharge elimination system wastewater discharge permits and for impacts to surface waters and wetlands associated with our phosphate mining and some production operations A broad definition of WOTUS and thus the scope of federal jurisdiction increases the time required to identify wetlands and waterways subject to federal regulatory and permitting requirements and the amount and type of mitigation required to compensate for impacts to jurisdictional WOTUS caused by our mining operations
As a result of ongoing litigation the January 2023 WOTUS rule as conformed by the September 2023 rule is being implemented in 23 states including New Mexico In the other 27 states including Florida WOTUS is being interpreted consistent with the pre 2015 regulatory regime and the Supreme Court s Sackett decision
Environmental Protection Agency in 1997 to coordinate activities with twelve states within the Mississippi River Basin to reduce nutrient loading in streams and tributaries through regulatory and voluntary actions The strategy calls for among other matters reduction of the flow of excess nutrients into the Gulf of America through state nutrient reduction frameworks new nutrient reduction approaches and reduction of agricultural and urban sources of excess nutrients Implementation of the strategy will require legislative or regulatory action at the state level Through these heightened actions by the states some are also leveraging groundwater protection initiatives to mandate nutrient use restrictions for fall applications in specific agricultural regions to limit nutrient losses While some of the legislative actions have changed application timing of nutrient use we cannot overall predict what the requirements of any such legislative or regulatory action could be or whether or how it would affect us or our customers
During phosphate mining we remove overburden to retrieve phosphate rock reserves Once we have finished mining in an area we use the overburden and sand tailings produced by the beneficiation process to reclaim the area in accordance with approved reclamation plans and applicable laws We have incurred and will continue to incur significant costs to fulfill our reclamation obligations
Mining and processing of potash and phosphate generate residual materials that must be managed both during the operation of the facility and after facility closure Potash tailings consisting primarily of salt and clay are stored in surface disposal sites Phosphate clay residuals from mining are deposited in clay storage areas
During the life of the tailings management areas CSAs and Gypstacks we have incurred and will continue to incur significant costs to manage residual materials in accordance with environmental laws and regulations and with permit requirements Additional legal and permit requirements will take effect when these facilities are closed Our AROs are further discussed in Note 14 of our Notes to Consolidated Financial Statements
In August 2016 a sinkhole developed under one of the two cells of the Phase II Gypstack at our New Wales facility in Polk County Florida resulting in process water from the stack draining into the sinkhole The incident was reported to the FDEP and EPA In connection with the incident our subsidiary Mosaic Fertilizer LLC
with the FDEP in October 2016 Pursuant to the Order Mosaic Fertilizer agreed to among other things implement an approved repair plan to close the sinkhole perform additional water monitoring and if necessary assessment and rehabilitation activities in the event of identified offsite impacts provide financial assurance and evaluate the risk of potential future sinkhole formation at our active Florida Gypstack operations
Separate from our accounting treatment for reclamation and closure liabilities some jurisdictions in which we operate require us either to pass a test of financial strength or provide credit support typically cash deposits surety bonds financial guarantees or letters of credit to address phosphate mining reclamation liabilities and closure liabilities for clay settling areas and Gypstacks See Other Commercial Commitments under Off Balance Sheet Arrangements and Obligations above for additional information about these requirements We also have obligations under certain consent decrees and a separate financial assurance arrangement relating to our facilities in Florida and Louisiana Two consent decrees that became effective in 2016 resolved claims under RCRA and state hazardous waste laws relating to our management of certain waste materials onsite at certain fertilizer manufacturing facilities in Florida and Louisiana Under these consent decrees in 2016 we deposited 630 million in cash into two trust funds to provide additional financial assurance for the estimated costs of closure and post closure care of our phosphogypsum management systems In addition in 2017 we issued a letter of credit in the amount of 50 million to further support our financial assurance obligation under the Florida 2015 Consent Decree While our actual Gypstack Closure Costs are generally expected to be paid by us in the normal course of our Phosphates business over a period that may not end until three decades or more after a Gypstack has been closed the funds on deposit in the RCRA Trusts can be drawn by the applicable governmental authority in the event we cannot perform our closure and long term care obligations If and when our estimated Gypstack Closure Costs with respect to the facilities associated with a RCRA Trust are sufficiently lower than the amount on deposit in that RCRA Trust we have the right to request that the excess funds be released to us The same is true for the RCRA Trust balance remaining after the completion of our obligations which will be performed over a period that may not end until three decades or more after a Gypstack has been closed See the discussion under EPA RCRA Initiative in Note 14 of our Notes to Consolidated Financial Statements for additional information about these matters
We have fully funded a trust valued at 25 million Canadian dollars in satisfaction of financial assurance requirements for closure of our Saskatchewan Potash facilities Trust performance is subject to review by the Province of Saskatchewan every five years during its existence
In 2020 we executed and thereafter have maintained a surety bond in the amount of approximately 82 million to establish financial assurance for closure of our Carlsbad New Mexico potash facility with the U S Department of the Interior Bureau of Land Management and the New Mexico Environment Department
We are committed to meeting the challenges of crop nutrient and animal feed ingredient production while working to mitigate greenhouse gas emissions We have implemented innovative energy recovery technologies that result in our generation of much of the energy we need particularly in our U S Phosphates operations from high efficiency heat recovery systems In 2021 we announced our goal to achieve net zero greenhouse gas emissions companywide by 2040
Various governmental initiatives to limit greenhouse gas emissions are under way or under consideration around the world These initiatives could restrict our operating activities require us to make changes in our operating activities that would increase our operating costs reduce our efficiency or limit our output require us to make capital improvements to our facilities increase our energy raw material and transportation costs or limit their availability or otherwise adversely affect our results of operations liquidity or capital resources and these effects could be material to us
Combustion of natural gas to produce steam and dry potash products at our Belle Plaine Saskatchewan potash solution mine To a lesser extent at our potash shaft mines natural gas is used as a fuel to heat fresh air supplied to the shaft mines and for drying potash products
In addition the production of energy and raw materials that we purchase from unrelated parties for use in our business and energy used in the transportation of our products and raw materials are sources of greenhouse gas emissions
which was the outcome of the 21st session of the Conference of the Parties under the United Nations Framework Convention on Climate Change The Paris Agreement which was signed by nearly 200 nations including the U S and Canada entered into force in 2016 and sets out a goal of limiting the average rise in temperatures for this century to below 2 degrees Celsius Each signatory is expected to develop its own plan referred to as a Nationally Determined Contribution or
Various legislative or regulatory initiatives relating to greenhouse gases have been adopted or considered by the U S Congress EPA or various states and those initiatives already adopted may be used to implement a U S NDC in the future We will continue to monitor climate related policy in the U S
Brazil ratified the Paris Agreement in September 2016 committing to a NDC that includes economy wide greenhouse gas reduction targets by 2030 Since 2020 the Brazilian Congress has been active in proposing climate related legislation and could approve new instruments to combat climate change in this current legislature
Canada s intended NDC aims to achieve significant greenhouse gas emission reductions In 2016 the Canadian federal government announced plans for a comprehensive tax on carbon emissions under which provinces opting out of the tax would have the option of adopting a cap and trade system In the plans the federal government also committed to implementing a federal carbon pricing backstop system that will apply in any province or territory that does not have a carbon pricing system in place by 2018 As of April 1 2024 a carbon tax of 80 per tonne now applies in Canada for any emitter not covered under the federal backstop program or approved provincial program A revised plan was submitted by Saskatchewan to the federal government in 2022 which was subsequently approved in its entirety in November 2022 Our Saskatchewan Potash facilities are subject to the Saskatchewan climate change plan regarding emissions at our facilities however indirect
costs from the carbon tax associated with electricity natural gas consumption and transportation are currently passed through to Mosaic More stringent laws and regulations may be enacted to accomplish the goals set out in Canada s NDC
It is possible that future legislation or regulation addressing climate change including in response to the Paris Agreement or any new international agreements could adversely affect our operating activities energy raw material and transportation costs results of operations liquidity or capital resources and these effects could be material or adversely impact our competitive advantage In addition to the extent climate change restrictions imposed in countries where our competitors operate such as China India former Soviet Union countries or Morocco are less stringent than in our production regions our competitors could gain cost or other competitive advantages over us
The prospective impact of climate change on our operations and those of our customers and farmers remains uncertain The impacts of climate change could include changes in rainfall patterns water shortages changing sea levels changing storm patterns and intensities and changing temperature levels These changes could be severe These impacts could vary by geographic location Severe climate change could impact our costs and operating activities the location and cost of global grain and oilseed production and the supply and demand for grains and oilseeds At the present time we cannot predict the prospective impact of climate change on our results of operations liquidity or capital resources or whether any such effects could be material to us
aka Superfund and state analogues impose liability without regard to fault or to the legality of a party s conduct on certain categories of persons including those who have disposed of hazardous substances at a location Under Superfund or its various state analogues one party may be responsible for the entire site regardless of fault or the locality of its disposal activity We have contingent environmental remedial liabilities that arise principally from three sources which are further discussed below i facilities currently or formerly owned by our subsidiaries or their predecessors ii facilities adjacent to currently or formerly owned facilities and iii third party Superfund or state equivalent sites where we are alleged to have disposed of hazardous materials Taking into consideration established accruals for environmental remedial matters of approximately 197 5 million as of December 31 2024 expenditures for these known conditions currently are not expected individually or in the aggregate to have a material effect on our business or financial condition However material expenditures could be required in the future to remediate the contamination at known sites or at other current or former sites
Many of our formerly owned or current facilities have been in operation for decades The historical use and handling of regulated chemical substances crop and animal nutrients and additives as well as by product or process tailings at these facilities by us and predecessor operators have resulted in soil surface water and groundwater impacts
At many of these facilities spills or other releases of regulated substances have occurred previously and potentially could occur in the future possibly requiring us to undertake or fund cleanup efforts under Superfund or otherwise In some instances we have agreed pursuant to consent orders or agreements with the appropriate governmental agencies to undertake certain investigations which currently are in progress to determine whether remedial action may be required to address site impacts At other locations we have entered into consent orders or agreements with appropriate governmental agencies to perform required remedial activities that will address identified site conditions Taking into account established accruals future expenditures for these known conditions currently are not expected individually or in the aggregate to have a material adverse effect on our business or financial condition However material expenditures by us could be required in the future to remediate the environmental impacts at these or at other current or former sites
Various third parties have alleged that our historical operations have impacted neighboring offsite areas or nearby third party facilities In some instances we have agreed pursuant to orders from or agreements with appropriate governmental agencies or agreements with private parties to undertake or fund investigations some of which currently are in progress to determine whether remedial action under Superfund or otherwise may be required to address offsite impacts Our remedial liability at these sites either alone or in the aggregate taking into account established accruals currently is not expected to have a material adverse effect on our business or financial condition As more information is obtained regarding these sites this expectation could change
Currently we are involved or concluding involvement for offsite disposal at several Superfund or equivalent state sites Moreover we previously have entered into settlements to resolve liability with regard to
Superfund or equivalent state sites In some cases such settlements have included reopeners which could result in additional liability at such sites in the event of newly discovered contamination or other circumstances Our remedial liability at such disposal sites either alone or in the aggregate currently is not expected to have a material adverse effect on our business or financial condition As more information is obtained regarding these sites and the potentially responsible parties involved this expectation could change
International federal state and provincial standards require us to register many of our products before these products can be sold The standards also impose labeling requirements on these products and require us to manufacture the products to formulations set forth on the labels We believe that when handled and used as intended based on the available data crop nutrient materials do not pose harm to human health or the environment and that any additional standards or regulatory requirements relating to product requirements and impacts will not have a material adverse effect on our business or financial condition
Some state governments have adopted or are adopting standards or policies requiring environmental justice reviews in some permitting actions In general they require governmental agencies to evaluate projects for disproportionate impacts to disadvantaged or already burdened communities If such conditions are found they might result in a permit denial or restrictive or cost prohibitive conditions imposed on our operations and may impair our business and operations and could have a material adverse effect on our business financial condition or results of operations
We are committed to making informed choices that improve our corporate governance financial strength operational efficiency environmental stewardship community engagement and resource management Through these efforts we intend to sustain our business and experience lasting success
We have included or incorporate by reference throughout this Form 10 K discussions of various matters relating to our sustainability in its broadest sense that we believe may be material to our investors These matters include but are not limited to discussions about corporate governance including the leadership and respective roles of our Board of Directors and its committees and management recent and prospective developments in our business product development risk enterprise risk management and risk oversight the regulatory and permitting environment for our business and ongoing regulatory and permitting initiatives executive compensation practices employee and contractor safety human capital matters and other EHS matters including climate change water management energy and other operational efficiency initiatives reclamation and AROs Other matters relating to sustainability are included in our sustainability reports that are available on our website at www mosaicco com ourresponsibility Our sustainability reports are not incorporated by reference in this Form 10 K
For additional information about phosphate mine permitting in Florida our environmental liabilities the environmental proceedings in which we are involved our AROs related to environmental matters and our related accounting policies see Environmental Liabilities and AROs under Critical Accounting Estimates above and Notes 2 14 and 23 of our Notes to Consolidated Financial Statements
All statements other than statements of historical fact appearing in this report constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 These forward looking statements include among other things statements about our expectations beliefs intentions or strategies for the future including statements about proposed or pending future transactions or strategic plans statements concerning our future operations financial condition and prospects statements regarding our expectations for capital expenditures statements concerning our level of indebtedness and other information and any statements of assumptions regarding any of the foregoing In particular forward looking statements may include words such as anticipate believe could estimate expect intend may potential predict project or should These statements involve certain risks and uncertainties that may cause actual results to differ materially from expectations as of the date of this filing
business and economic conditions and governmental policies affecting the agricultural industry where we or our customers operate including price and demand volatility resulting from periodic imbalances of supply and demand
because of political and economic instability civil unrest or changes in government policies in Brazil Peru or other countries in which we do business our operations could be disrupted as higher costs of doing business could result including those associated with implementation of new freight tables and new mining legislation
the expansion or contraction of production capacity or selling efforts by competitors or new entrants in the industries in which we operate including the effects of actions by members of Canpotex to prove the production capacity of potash expansion projects through proving runs or otherwise
seasonality in our business that results in the need to carry significant amounts of inventory and seasonal peaks in working capital requirements which may result in excess inventory or product shortages
declines in our selling prices or significant increases in costs that can require us to write down our inventories to the lower of cost or market or require us to impair goodwill or other long lived assets or establish a valuation allowance against deferred tax assets
the lag in realizing the benefit of falling market prices for the raw materials we use to produce our products that can occur while we consume raw materials that we purchased or committed to purchase in the past at higher prices
difficulties or delays in receiving challenges to increased costs of obtaining or satisfying conditions of or revocation or withdrawal of required governmental and regulatory approvals including permitting activities
changes in the environmental and other governmental regulation that applies to our operations including federal legislation or regulatory action expanding the types and extent of water resources regulated under federal law and the possibility of further federal or state legislation or regulatory action affecting or related to greenhouse gas emissions including carbon taxes or other measures that may be implemented in Canada or other jurisdictions in which we operate or of restrictions or liabilities related to elevated levels of naturally occurring radiation that arise from disturbing the ground in the course of mining activities or possible efforts to reduce the flow of nutrients into the Gulf of America the Mississippi River basin or elsewhere
the costs and effects of legal and administrative proceedings and regulatory matters affecting us including environmental tax or administrative proceedings complaints that our operations are adversely impacting nearby farms businesses other property uses or properties settlements thereof and actions taken by courts with respect to approvals of settlements costs related to defending and resolving global audit appeal or court activity and other further developments in legal proceedings and regulatory matters
strikes labor stoppages or slowdowns by our work force or increased costs resulting from unsuccessful labor contract negotiations and the potential costs and effects of compliance with new regulations affecting our workforce which increasingly focus on wages and hours healthcare retirement and other employee benefits
accidents or other incidents involving our properties or operations including potential fires explosions seismic events sinkholes unsuccessful tailings management ineffective mine safety procedures or releases of hazardous or volatile chemicals
terrorism armed conflict or other malicious intentional acts including cybersecurity risks such as attempts to gain unauthorized access to or disable our information technology systems or our costs of addressing malicious intentional acts
changes in our relationship with the other member of Canpotex or any joint venture in which we participate or their or our exit from participation in Canpotex or any such export association or joint venture and other changes in our commercial arrangements with unrelated third parties and
Material uncertainties and other factors known to us are discussed in Item 1A Risk Factors of our Form 10 K for the year ended December 31 2024 and incorporated by reference herein as if fully stated herein
We base our forward looking statements on information currently available to us and we undertake no obligation to update or revise any of these statements whether as a result of changes in underlying factors new information future events or other developments
We have audited the accompanying consolidated balance sheets of The Mosaic Company and subsidiaries the Company as of December 31 2024 and 2023 the related consolidated statements of earnings comprehensive income loss equity and cash flows for each of the years in the three year period ended December 31 2024 and the related notes collectively the consolidated financial statements In our opinion the consolidated financial statements present fairly in all material respects the financial position of the Company as of December 31 2024 and 2023 and the results of its operations and its cash flows for each of the years in the three year period ended December 31 2024 in conformity with U S generally accepted accounting principles
We also have audited in accordance with the standards of the Public Company Accounting Oversight Board United States PCAOB the Company s internal control over financial reporting as of December 31 2024 based on criteria established in Internal Control Integrated Framework 2013 issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 3 2025 expressed an unqualified opinion on the effectiveness of the Company s internal control over financial reporting
These consolidated financial statements are the responsibility of the Company s management Our responsibility is to express an opinion on these consolidated financial statements based on our audits We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U S federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB
We conducted our audits in accordance with the standards of the PCAOB Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement whether due to error or fraud Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements whether due to error or fraud and performing procedures that respond to those risks Such procedures included examining on a test basis evidence regarding the amounts and disclosures in the consolidated financial statements Our audits also included evaluating the accounting principles used and significant estimates made by management as well as evaluating the overall presentation of the consolidated financial statements We believe that our audits provide a reasonable basis for our opinion
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that 1 relates to accounts or disclosures that are material to the consolidated financial statements and 2 involved our especially challenging subjective or complex judgments The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements taken as a whole and we are not by communicating the critical audit matter below providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates
As discussed in Note 14 to the consolidated financial statements the Company has recorded asset retirement obligations AROs of 2 572 2 million as of December 31 2024 The ARO includes the planned treatment of contaminated water water treatment costs and other asset retirement activities at the Company s Florida and Louisiana facilities
We identified the evaluation of asset retirement obligations for water treatment costs as a critical audit matter Specialized skills and knowledge were required to evaluate the Company s selection of planned water treatment activities to satisfy their legal obligation In addition there was a high degree of subjective auditor judgment due to the sensitivity of the AROs to minor changes to significant assumptions such as the volume of contaminated water and the forecasted level of contamination used to estimate the water treatment costs per thousand gallons unit costs
The following are the primary procedures performed to address this critical audit matter We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company s ARO process This included controls related
to the knowledge skill and ability of third party specialists and their relationship to the Company determination of necessary activities required to treat contaminated water and the development of the significant assumptions utilized in the process We compared water treatment unit cost estimates to actual spending and water quality measurements We evaluated the Company s ability to accurately estimate water treatment costs by comparing the Company s prior year estimates to the actual water treatment costs incurred We performed sensitivity analyses over the volume of contaminated water and the unit costs assumptions to assess their impact on the water treatment costs estimate Due to the specialized skills and knowledge used by the Company to select water treatment activities we involved an environmental engineering professional with specialized skills and knowledge This professional assisted in assessing the professional qualifications of the Company s environmental engineers and engineering firm including the knowledge skill and ability of the engineers and the relationship of the engineers and engineering firm to the Company In addition the environmental engineering professional evaluated the Company s planned asset retirement activities by analyzing the Company s specialist s reports This professional evaluated significant engineering assumptions listed above and compared the planned activities per the specialist s reports to other information obtained during the audit such as
We evaluated the Company s changes in assumptions for the volume of contaminated water and the forecasted level of contamination by comparing them to actual results from the prior year as well as assessing operational changes that could impact estimated water volumes contamination levels or necessary treatment activities
We have audited The Mosaic Company and subsidiaries the Company internal control over financial reporting as of December 31 2024 based on criteria established in Internal Control Integrated Framework 2013 issued by the Committee of Sponsoring Organizations of the Treadway Commission In our opinion the Company maintained in all material respects effective internal control over financial reporting as of December 31 2024 based on criteria established in Internal Control Integrated Framework 2013 issued by the Committee of Sponsoring Organizations of the Treadway Commission
We also have audited in accordance with the standards of the Public Company Accounting Oversight Board United States PCAOB the consolidated balance sheets of the Company as of December 31 2024 and 2023 the related consolidated statements of earnings comprehensive income loss equity and cash flows for each of the years in the three year period ended December 31 2024 and the related notes collectively the consolidated financial statements and our report dated March 3 2025 expressed an unqualified opinion on those consolidated financial statements
The Company s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management s Report on Internal Control Over Financial Reporting Our responsibility is to express an opinion on the Company s internal control over financial reporting based on our audit We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U S federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB
We conducted our audit in accordance with the standards of the PCAOB Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk Our audit also included performing such other procedures as we considered necessary in the circumstances We believe that our audit provides a reasonable basis for our opinion
A company s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles A company s internal control over financial reporting includes those policies and procedures that 1 pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company 2 provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company and 3 provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition use or disposition of the company s assets that could have a material effect on the financial statements
Because of its inherent limitations internal control over financial reporting may not prevent or detect misstatements Also projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate
Common stock 0 01 par value 1 000 000 000 shares authorized 394 648 654 shares issued and 316 932 047 shares outstanding as of December 31 2024 393 875 241 shares issued and 324 103 141 shares outstanding as of December 31 2023
produces and markets concentrated phosphate and potash crop nutrients We conduct our business through wholly and majority owned subsidiaries and businesses in which we own less than a majority or a noncontrolling interest including consolidated variable interest entities and investments accounted for by the equity method
business segment owns and operates mines and production facilities in Florida which produce concentrated phosphate crop nutrients and phosphate based animal feed ingredients and processing plants in Louisiana which produce concentrated phosphate crop nutrients We have a 75 economic interest in the Miski Mayo Phosphate Mine in Peru These results are consolidated in the Phosphates segment Through December 24 2024 the Phosphates segment included our prior 25 interest in the Ma aden Wa ad Al Shamal Phosphate Company
a joint venture to develop own and operate integrated phosphate production facilities in the Kingdom of Saudi Arabia On December 24 2024 we exchanged our ownership of MWSPC for shares of Ma aden Our equity in the net earnings or losses relating to MWSPC were recognized on a one quarter lag in our Consolidated Statements of Earnings
business segment owns and operates potash mines and production facilities in Canada and the U S which produce potash based crop nutrients animal feed ingredients and industrial products Potash sales include domestic and international sales We are a member of Canpotex Limited
business segment includes five Brazilian phosphate rock mines four phosphate chemical plants and a potash mine in Brazil The segment also includes our distribution business in South America which consists of sales offices crop nutrient blending and bagging facilities port terminals and warehouses in Brazil and Paraguay We also have a majority interest in Fospar S A which owns and operates a single superphosphate granulation plant and a deep water port and throughput warehouse terminal facility in Brazil
Intersegment eliminations unrealized mark to market gains losses on derivatives and investment in equity securities of Ma aden debt expenses and the results of the China and India distribution businesses are included within Corporate Eliminations and Other
The accompanying Consolidated Financial Statements include the accounts of Mosaic and its majority owned subsidiaries Certain investments in companies in which we do not have control but have the ability to exercise significant influence are accounted for by the equity method
Preparation of the Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting periods The most significant estimates made by management relate to the recoverability of non current assets including goodwill the useful lives and net realizable values of long lived assets environmental and reclamation liabilities including asset retirement obligations
We generate revenues primarily by producing and marketing phosphate and potash crop nutrients Revenue is recognized when control of the product is transferred to the customer which is generally upon transfer of title to the customer based on the contractual terms of each arrangement Title is typically transferred to the customer upon shipment of the product In certain circumstances which are referred to as final price deferred arrangements we ship product prior to the establishment of a valid sales contract In such cases we retain control of the product and do not recognize revenue until a sales contract has been agreed to with the customer
Revenue is measured as the amount of consideration we expect to receive in exchange for the transfer of our goods Our products are generally sold based on market prices prevailing at the time the sales contract is signed or through contracts which are priced at the time of shipment except for the final priced deferred arrangements discussed above Sales incentives are volumetric based annual programs and recorded as a reduction of revenue at the time of sale We estimate the variable consideration related to our sales incentive programs based on the sales terms with customers and historical experience Historically sales incentives have represented 1 or less of total revenue and there have not been significant adjustments to such estimates in the financial statements
We sell Canadian sourced potash outside Canada and the U S exclusively through Canpotex distribution Canpotex sells potash to buyers in export markets pursuant to term and spot contracts at agreed upon prices For sales through this channel our revenue is recognized at the amount received from Canpotex representing proceeds from their sale of potash less net costs of Canpotex Sales are recognized when control is transferred to Canpotex typically upon shipment of the product to Canpotex and adjusted at the end of each reporting period based upon the updated estimated pricing or final pricing from Canpotex Prior to final pricing revenue is recognized only to the extent that it is probable a significant reversal of revenue will not occur The constraint is estimated each period based on historical experience market trends and industry data The estimated constraint is not material to the Company s financial statements
Due to our membership in Canpotex we eliminate the intra entity profit with Canpotex at the end of each reporting period and present that profit elimination by reversing revenue and cost of goods sold for the inventory remaining at Canpotex For more information regarding our relationship with Canpotex and accounting considerations see Note 9 of our Notes to Consolidated Financial Statements For information regarding sales by product type and by geographic area see Note 25 of our Notes to Consolidated Financial Statements
The timing of recognition of revenue related to our performance obligations may be different than the timing of collection of cash related to those performance obligations Specifically we collect prepayments from certain customers in Brazil In addition cash collection from Canpotex may occur prior to delivery of product to the end customer We generally satisfy our contractual liabilities within one quarter of incurring the liability
We pay Canadian resource taxes consisting of the Potash Production Tax and resource surcharge The Potash Production Tax is a Saskatchewan provincial tax on potash production and consists of a base payment and a profits tax In addition to the Canadian resource taxes royalties are payable to the mineral owners with respect to potash reserves or production of potash These resource taxes and royalties are recorded in our cost of goods sold Our Canadian resource tax and royalty expenses were 272 7 million 457 0 million and 1 0 billion during 2024 2023 and 2022 respectively
We have approximately 96 2 million of assets recorded as of December 31 2024 related to PIS and Cofins which is a Brazilian federal value added tax This amount was mostly earned in 2008 through 2022 we believe that it will be realized through offsetting income tax payments or other federal taxes or receiving cash refunds As of December 31 2023 we had approximately 136 5 million of assets recorded for these matters Should the Brazilian government determine that these are not valid credits upon audit this could impact our results in such period We have recorded the PIS and Cofins credits at
The Company s reporting currency is the U S dollar however for operations located in Canada and Brazil the functional currency is the local currency Assets and liabilities of these foreign operations are translated to U S dollars at exchange rates in effect at the balance sheet date while income statement accounts and cash flows are translated to U S dollars at the average exchange rates for the period For these operations translation gains and losses are recorded as a component of accumulated other comprehensive income in equity until the foreign entity is sold or liquidated Transaction gains and losses result from transactions that are denominated in a currency other than the functional currency of the operation primarily accounts receivable and intercompany loans in our Canadian entities denominated in U S dollars intercompany loans receivable in our U S entities denominated in Brazilian real and accounts payable in Brazil denominated in U S dollars These foreign currency transaction gains and losses are presented separately in the Consolidated Statement of Earnings
Cash and cash equivalents include short term highly liquid investments with original maturities of 90 days or less and other highly liquid investments that are payable on demand such as money market accounts certain certificates of deposit and repurchase agreements The carrying amount of such cash equivalents approximates their fair value due to the short term and highly liquid nature of these instruments
In the U S we sell our products to manufacturers distributors and retailers primarily in the Midwest and Southeast Internationally our potash products are sold primarily through Canpotex an export association A concentration of credit risk arises from our sales and accounts receivable associated with the international sales of potash product through Canpotex We consider our concentration risk related to the Canpotex receivable to be mitigated by their credit policy which requires the underlying receivables to be substantially insured or secured by letters of credit As of December 31 2024 and 2023 there were 65 1 million and 193 1 million respectively of trade accounts receivable due from Canpotex During 2024 2023 and 2022 sales to Canpotex were 884 3 million 1 3 billion and 3 0 billion respectively
Inventories of raw materials work in process products finished goods and operating materials and supplies are stated at the lower of cost or net realizable value Costs for substantially all inventories are determined using the weighted average cost basis To determine the cost of inventory we allocate fixed expense to the costs of production based on the normal capacity which refers to a range of production levels and is considered the production expected to be achieved over a number of periods or seasons under normal circumstances taking into account the loss of capacity resulting from planned maintenance Fixed overhead costs allocated to each unit of production should not increase due to abnormally low production Those excess costs are recognized as a current period expense When a production facility is completely shut down temporarily it is considered idle and all related expenses are charged to cost of goods sold
Net realizable value of our inventory is defined as forecasted selling prices less reasonably predictable selling costs Significant management judgment is involved in estimating forecasted selling prices including various demand and supply variables Examples of demand variables include grain and oilseed prices stock to use ratios and changes in inventories in the crop nutrients distribution channels Examples of supply variables include forecasted prices of raw materials such as phosphate rock sulfur ammonia and natural gas estimated operating rates and industry crop nutrient inventory levels Results could differ materially if actual selling prices differ materially from forecasted selling prices Charges for lower of cost or market are recognized in our Consolidated Statements of Earnings in the period when there is evidence of a decline of market value below cost
Property plant and equipment are stated at cost Costs of significant assets include capitalized interest incurred during the construction and development period Repairs and maintenance including planned major maintenance and plant turnaround costs are expensed when incurred
Currently we do not have any material exploration or development stage mining projects When we transition to new mining areas within our current properties we incur minimal pre mining costs related to the permitting process and land preparation activities such as water management control and construction of roads and access points These costs are capitalized as part of our mineral properties and rights Mineral properties and rights at our operations include mineral reserves and mineral resources Mineral resources have not yet been scheduled in formal mine plans and therefore are not subject to depletion Depletion expenses for mining operations including mineral reserves are generally determined using the units of production method based on estimates of proven and probable reserves Depreciation is computed principally using the straight line method and units of production method over the following useful lives machinery and equipment three to 25 years and buildings and leasehold improvements three to 40 years
We estimate initial useful lives based on experience and current technology These estimates may be extended through sustaining capital programs Factors affecting the fair value of our assets or periods of expected use may also affect the estimated useful lives of our assets and these factors can change Therefore we periodically review the estimated remaining lives of our facilities and other significant assets and adjust our depreciation rates prospectively where appropriate
Long lived assets including fixed assets and right of use assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable An impairment assessment involves management judgment and estimates of factors such as industry and market conditions the economic life of the asset sales volume and prices inflation raw materials costs cost of capital tax rates and capital spending The carrying amount of a long lived asset group is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset group If it is determined that an impairment loss has occurred the loss is measured as the amount by which the carrying amount of the long lived asset group exceeds its fair value
assets represent our right to use an underlying asset for the lease term Lease liabilities represent our obligation to make lease payments arising from the lease Operating lease ROU assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term As most of our leases do not provide an implicit rate we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments The Company s incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms For both operating and finance leases the initial ROU asset equals the lease liability plus initial direct costs less lease incentives received Our lease agreements may include options to extend or terminate the lease which are included in the lease term at the commencement date when it is reasonably certain that we will exercise that option In general we do not consider optional periods included in our lease agreements as reasonably certain of exercise at inception
At inception we determine whether an arrangement is a lease and the appropriate lease classification Operating leases with terms greater than twelve months are included as operating lease ROU assets within other assets and the associated lease liabilities within accrued liabilities and other noncurrent liabilities on our consolidated balance sheets Finance leases with terms greater than twelve months are included as finance ROU assets within property and equipment and the associated finance lease liabilities within current maturities of long term debt and long term debt on our consolidated balance sheets
We have lease agreements with lease and non lease components which are generally accounted for separately For full service railcar leases we account for the lease and non lease components as a single lease component Additionally for certain equipment leases we apply assumptions using a portfolio approach given the generally consistent terms of the agreements Lease payments based on usage for example per mile or per hour charges referred to as variable lease costs are recorded separately from the determination of the ROU asset and lease liability
Accruals for environmental remediation efforts are recorded when costs are probable and can be reasonably estimated In determining these accruals we use the most current information available including similar past experiences available technology consultant evaluations regulations in effect the timing of remediation and cost sharing arrangements Adjustments to accruals recorded as needed in our Consolidated Statement of Earnings each quarter are made to reflect changes in and current status of these factors
We are involved from time to time in claims and legal actions incidental to our operations both as plaintiff and defendant We have established what we currently believe to be adequate accruals for pending legal matters These accruals are established as part of an ongoing worldwide assessment of claims and legal actions that takes into consideration such items as advice of legal counsel individual developments in court proceedings changes in the law changes in business focus changes in the litigation environment changes in opponent strategy and tactics new developments as a result of ongoing discovery and our experience in defending and settling similar claims The litigation accruals at any time reflect updated assessments of the then existing claims and legal actions The final outcome or potential settlement of litigation matters could differ materially from the accruals which we have established Legal costs are expensed as incurred
Mosaic offers a number of benefit plans that provide pension and other benefits to qualified employees These plans include defined benefit pension plans supplemental pension plans defined contribution plans and other postretirement benefit plans
We accrue the funded status of our plans which is representative of our obligations under employee benefit plans and the related costs net of plan assets measured at fair value The cost of pensions and other retirement benefits earned by employees is generally determined with the assistance of an actuary using the projected benefit method prorated on service and management s best estimate of expected plan investment performance salary escalation retirement ages of employees and expected healthcare costs
To facilitate a better understanding of our consolidated financial statements we have disclosed the following significant accounting policies with the exception of those identified above throughout the following notes with the related financial disclosures by major caption
issued guidance which requires that a buyer in a supplier financing program make annual disclosures about the program s key terms the balance sheet presentation of related amounts the confirmed amount outstanding at the end of the period and associated rollforward information We have historically presented supplier financing programs separately on the face of the balance sheet as structured accounts payable arrangements and disclosed key terms of such programs Payments and proceeds rollforward information on structured accounts payable arrangements has historically been provided on the face of the statement of cash flows As such adoption of this standard did not impact our balance sheet presentation or footnote disclosures
In November 2023 the FASB issued guidance to improve reportable segment disclosure requirements primarily through additional disclosures about significant segment expenses The standard is effective for fiscal years beginning after December 15 2023 our fiscal 2024 and interim periods within fiscal years beginning after December 15 2024 our fiscal 2025 with early adoption permitted The amendments are to be applied retrospectively to all prior periods presented in the financial statements We adopted this standard as of December 31 2024 While this standard required enhanced segment disclosures adoption of this guidance did not have a material effect on our consolidated financial statements
In December 2023 the FASB issued guidance to provide more disaggregation of income tax disclosures mainly related to the reconciliations of the income tax rate and income taxes paid by jurisdiction We expect the adoption of the standard to result in additional disaggregation of our income tax footnote disclosure We will begin providing the enhanced disclosure related to income taxes effective with our quarterly report of Form 10 Q for the quarter ending March 31 2025
In November 2024 the FASB issued guidance which requires more detailed disclosure about specified categories of expenses purchases of inventory employee compensation depreciation intangible asset amortization and depletion included in certain expense captions on the face of the income statement Additionally the amendments require disclosure of the total amount of selling expenses and an annual disclosure of the definition of selling expenses These amendments are effective for fiscal years beginning after December 15 2026 and for interim periods within fiscal years beginning after December 15 2027 with early adoption permitted The disclosures may be applied either prospectively or retrospectively to any or all prior periods presented in the financial statements We are currently evaluating the impact this new guidance will have on our disclosures
We have operating and finance leases for heavy mobile equipment railcars fleet vehicles field and plant equipment river and cross gulf vessels corporate offices land and computer equipment Our leases have remaining lease terms of one year to 38 years some of which include options to extend the lease for up to 20 years and some of which include options to terminate the lease within one year
Lease expense is generally included within cost of goods sold and selling general and administrative expenses except for interest on lease liabilities which is recorded within net interest The components of lease expense were as follows
Implementation costs eligible for capitalization related to cloud computing arrangements that are a service contract are recorded within Prepaid expenses and Other assets in the Consolidated Balance Sheets and amortized over the reasonably certain term of the associated hosting arrangement
Depreciation and depletion expense was 1 012 5 million 958 9 million and 932 1 million for 2024 2023 and 2022 respectively Interest capitalized on major construction projects was 42 3 million 35 2 million and 26 8 million for 2024 2023 and 2022 respectively
is net earnings attributable to Mosaic The denominator for basic EPS is the weighted average number of shares outstanding during the period The denominator for diluted EPS also includes the weighted average number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued unless the shares are anti dilutive
A total of 1 0 million shares for 2024 0 5 million shares for 2023 and 0 1 million shares for 2022 of common stock subject to issuance related to share based awards have been excluded from the calculation of diluted EPS because the effect would have been anti dilutive
Acquiring or constructing property plant and equipment by incurring a liability does not result in a cash outflow for us until the liability is paid In the period the liability is incurred the change in operating accounts payable on the Consolidated Statements of Cash Flows is adjusted by such amount In the period the liability is paid the amount is reflected as a cash outflow from investing activities The applicable net change in operating accounts payable that was classified to investing activities on the Consolidated Statements of Cash Flows was 20 3 million 19 5 million and 65 2 million for 2024 2023 and 2022 respectively
We accrued 74 1 million related to the dividends declared in 2024 that will be paid in 2025 At December 31 2023 and 2022 we had accrued dividends of 72 3 million and 72 9 million which were paid in 2024 and 2023 respectively
Included in proceeds from issuance of short term debt and payments of short term debt were 16 8 billion and 16 6 billion and 9 6 billion and 9 5 billion for 2024 and 2023 respectively related to our commercial paper arrangement
We had non cash investing and financing transactions related to right of use assets obtained in exchange for lease obligations assets under finance leases in 2024 of 9 0 million Non cash investing and financing transactions related to assets acquired under capital leases were 35 8 million and 27 2 million for 2023 and 2022 respectively
We had non cash transactions related to the exchange of our 25 ownership MWSPC for 111 012 433 shares of Ma aden at a value of approximately 1 5 billion resulting in a gain before transaction expenses of 538 2 million
Depreciation depletion and amortization includes 1 012 5 million 958 9 million and 932 1 million related to depreciation and depletion of property plant and equipment and 13 0 million 1 7 million and 1 8 million related to the amortization of intangible assets and cloud computing costs for 2024 2023 and 2022 respectively
We have investments in various international and domestic entities and ventures The equity method of accounting is applied to such investments when the ownership structure prevents us from exercising a controlling influence over operating and financial policies of the businesses but still allow us to have significant influence Under this method our equity in the net earnings or losses of the investments is reflected as equity in net earnings of non consolidated companies on our Consolidated Statements of Earnings The effects of material intercompany transactions with these equity method investments are eliminated including the gross profit on sales to and purchases from our equity method investments which is deferred until the time of sale to the final third party customer The cash flow presentation of dividends received from equity method investees is determined by evaluation of the facts circumstances and nature of the distribution
MWSPC owns and operates a mine and two chemical complexes that produce phosphate fertilizers and other downstream phosphate products in the Kingdom of Saudi Arabia As of December 31 2023 our cash investment was 770 0 million and we marketed approximately 25 of the phosphate production of this joint venture As of December 31 2023 MWSPC represented 77 of the total assets and 68 of the total liabilities in the table above In 2024 2023 and 2022 our share of equity in net earnings of MWSPC was 70 8 million 57 6 million and 194 5 million respectively On April 29 2024 Saudi Arabian Mining Company
and Mosaic entered into a Share Purchase and Subscription Agreement to exchange our 25 ownership of the Ma aden Wa ad al Shamal Phosphate Company for 111 012 433 shares of Ma aden This transaction closed on December 24 2024 at a value of approximately 1 5 billion resulting in a gain of 522 2 million net of transaction costs The shares received by Mosaic are subject to transfer and sale restrictions which will be released over a five year period The shares are included in equity securities and investments in nonconsolidated companies on our Consolidated Balance Sheets They are carried at fair value based on the unadjusted quoted price on the Saudi Exchange Tadawul with the changes in fair value reported in non operating income expense At December 31 2024 the unrealized gain on the Ma aden shares was 28 3 million
Canpotex is a Saskatchewan export association used by two Canadian potash producers to market sell and distribute Canadian potash products outside of Canada and the U S It operates as a break even entity and therefore has insignificant equity earnings or loss We have concluded that the sales to Canpotex are not at arm s length due to the unique pricing and payment structure and financial obligations of the stockholders Therefore the full profit on sales to Canpotex is eliminated until Canpotex no longer has control of the related inventory and has sold it to an unrelated third party customer We
eliminate the intra entity profit with Canpotex at the end of each reporting period and present that profit elimination by reversing revenue and cost of goods sold for the inventory remaining at Canpotex
Goodwill is carried at cost not amortized and represents the excess of the purchase price and related costs over the fair value assigned to the net identifiable assets of a business acquired We test goodwill for impairment on a quantitative basis at the reporting unit level on an annual basis or upon the occurrence of events that may indicate possible impairment Impairment is measured as the excess carrying value over the fair value of goodwill
As of October 31 2024 we performed our annual quantitative assessment In performing our assessment we estimated the fair value of each of our reporting units using the income approach also known as the discounted cash flow
method The income approach utilized the present value of cash flows to estimate fair value The future cash flows for our reporting units were projected based on our estimates at that time for revenue operating income and other factors such as working capital and capital expenditures for each reporting unit To determine if the fair value of each of our reporting units with goodwill exceeded its carrying value we assumed sales volume growth rates based on our long term expectations our internal selling prices and projected raw material prices for years one through five which were anchored in projections from CRU International Limited
an independent third party data source Selling prices and raw material prices for years six and beyond were based on anticipated market growth and long term CRU outlooks The discount rates used in our DCF method were based on a weighted average cost of capital
determined from relevant market comparisons A terminal value growth rate of 2 was applied to all years thereafter for the projected period and reflected our estimate of stable growth We then calculated a present value of the respective cash flows for each reporting unit to arrive at an estimate of fair value under the income approach Finally we compared our estimates of fair values for our reporting units to our October 31 2024 total public market capitalization based on our common stock price at that date
In making this assessment we considered among other things expectations of projected net sales and cash flows assumptions impacting the WACC changes in our stock price and changes in the carrying values of our reporting units with goodwill We also considered overall business conditions
with a maturity date of August 19 2026 which is intended to serve as our primary senior unsecured bank credit facility The Mosaic Credit Facility has cross default provisions that in general provide that a failure to pay principal or interest under or any other amount payable under any indebtedness with an outstanding principal amount of 100 million or more or breach or default under such indebtedness that permits the holders thereof to accelerate the maturity thereof will result in a cross default
The Mosaic Credit Facility requires Mosaic to maintain certain financial ratios including a ratio of Consolidated Indebtedness which has been redefined to exclude unrestricted cash and cash equivalents to Consolidated Capitalization Ratio as defined of no greater than 0 65 to 1 0 as well as a minimum Interest Coverage Ratio as defined of not less than 3 0 to 1 0 We were in compliance with these ratios as of December 31 2024
The Mosaic Credit Facility also contains other events of default and covenants that limit various matters These provisions include limitations on indebtedness liens investments and acquisitions other than capital expenditures certain mergers certain sales of assets and other matters customary for credit facilities of this nature
As of December 31 2024 and 2023 we had outstanding letters of credit that utilized a portion of the amount available for revolving loans under the Mosaic Credit Facility of 0 0 million and 10 5 million respectively The net available borrowings for revolving loans under the Mosaic Credit Facility were approximately 2 50 billion and 2 49 billion as of December 31 2024 and December 31 2023 respectively As of December 31 2024 2023 and 2022 unused commitment fees accrued at an average rate of 0 15 generating expenses of 3 8 million in each period
Short term debt consists of the revolving credit facility under the Mosaic Credit Facility under which there were no borrowings as of December 31 2024 working capital financing arrangements and various other short term borrowings related to our international operations in India China and Brazil These other short term borrowings outstanding were 847 1 million and 399 7 million as of December 31 2024 and 2023 respectively
We have an inventory financing arrangement whereby we can sell up to 625 million of certain inventory for cash and subsequently repurchase the inventory at an agreed upon price and time in the future not to exceed 180 days Under the terms of the agreement we may borrow up to 90 of the value of the inventory It is later repurchased by Mosaic at the original sale price plus interest and any transaction costs As of December 31 2024 and 2023 we had financed inventory of 199 5 million and 0 0 million respectively under this arrangement which is included in short term debt on the Consolidated Balance Sheet
with banks whereby from time to time we sell certain receivables The net face value of the purchased receivables may not exceed 600 million at any point in time The purchase price of the receivable sold under the RPA is the face value of the receivable less an agreed upon discount The receivables sold under the RPAs are accounted for as true sales Upon sale these receivables are removed from the Consolidated Balance Sheets Cash received is presented as cash provided by operating activities in the Consolidated Statements of Cash Flows
The Company sold approximately 430 7 million and 1 3 billion during December 31 2024 and 2023 respectively of accounts receivable under these arrangements Discounts on sold receivables were not material for any period presented Following the sale to the banks we continue to service the collection of the receivables on behalf of the banks without further consideration As of December 31 2024 and 2023 there was no amount outstanding to be remitted to the bank Any outstanding amount would be classified in accrued liabilities on the Consolidated Balance Sheets Cash collected and remitted is presented as cash used in financing activities in the Consolidated Statements of Cash Flows
We have a commercial paper program which allows us to issue unsecured commercial paper notes with maturities that vary but do not exceed 397 days from the date of issue up to a maximum aggregate face or principal amount outstanding at any time of 2 5 billion We plan to use the revolving credit facility as a liquidity backstop for borrowings under the commercial paper program As of December 31 2024 we had 609 2 million outstanding under this program with a weighted average interest rate of 4 74 and a remaining average term of 10 days As of December 31 2023 we had 399 5 million outstanding under this program with a weighted average interest rate of 5 62 and a remaining average term of nine days
We had additional outstanding bilateral letters of credit of 63 8 million as of December 31 2024 which includes 50 0 million as required by the 2015 Consent Decrees as described further in Note 14 of our Consolidated Financial Statements
In May 2023 we entered into a ten year senior unsecured term loan facility pursuant to which we can draw up to 700 million The term loan matures on May 18 2033 We may voluntarily prepay the outstanding principal without premium or penalty As of December 31 2024 and 2023 570 million and 500 million respectively has been drawn under
The Senior Notes of 2011 the Senior Notes of 2013 the Senior Notes of 2017 and the Senior Notes of 2023 are Mosaic s senior unsecured obligations and rank equally in right of payment with Mosaic s existing and future senior unsecured indebtedness The indenture governing these notes contains restrictive covenants limiting debt secured by liens sale and leaseback transactions and mergers consolidations and sales of substantially all assets as well as other events of default
is outstanding as of December 31 2024 with a balance of 147 1 million The indenture governing the 2028 Debenture also contains restrictive covenants limiting debt secured by liens sale and leaseback transactions and mergers consolidations and sales of substantially all assets as well as events of default The obligations under the 2028 Debenture are guaranteed by the Company and several of its subsidiaries
In Brazil we finance some of our potash based fertilizer sulfur ammonia and other raw material product purchases through third party contractual arrangements These arrangements provide that the third party intermediary advance the amount of the scheduled payment to the vendor less an appropriate discount at a scheduled payment date and Mosaic makes payment to the third party intermediary at dates ranging from 105 to 164 days from date of shipment At December 31 2024 and 2023 these structured accounts payable arrangements were 402 3 million and 399 9 million respectively Payments and proceeds rollforward information on structured payable arrangements are provided on the Consolidated Statements of Cash Flows During 2024 the interest expense component of such programs was 22 9 million
as described further in Note 14 of our Notes to Consolidated Financial Statements Our actual Gypstack Closure Costs are generally expected to be paid by us in the normal course of our Phosphates business however funds held in each of the RCRA Trusts can be drawn by the applicable governmental authority in the event we cannot perform our closure and long term care obligations When our estimated Gypstack Closure Costs with respect to the facilities associated with a RCRA Trust are sufficiently lower than the amount on deposit in that RCRA Trust we have the right to request that the excess funds be released to us The same is true for the RCRA Trust balance remaining after the completion of our obligations which will be performed over a period that may not end until three decades or more after a Gypstack has been closed The investments held by the RCRA Trusts are managed by independent investment managers with discretion to buy sell and invest pursuant to the objectives and standards set forth in the related trust agreements Amounts reserved to be held or held in the RCRA Trusts including losses or reinvested earnings are included in other assets on our Consolidated Balance Sheets
The RCRA Trusts hold investments which are restricted from our general use in marketable debt securities classified as available for sale and are carried at fair value As a result unrealized gains and losses are included in other comprehensive income until realized unless it is determined that the entire unamortized cost basis of the investment is not expected to be recovered A credit loss would then be recognized in operations for the amount of the expected credit loss As of December 31 2024 we expect to recover our amortized cost on all available for sale securities and have not established an allowance for credit loss
We review the fair value hierarchy classification on a quarterly basis Changes in the ability to observe valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy We determine the fair market values of our available for sale securities and certain other assets based on the fair value hierarchy described below
Level 2 Values based on quoted prices for similar instruments in active markets quoted prices for identical or similar instruments in markets that are not active or model based valuation techniques for which all significant assumptions are observable in the market
Level 3 Values generated from model based techniques that use significant assumptions not observable in the market These unobservable assumptions reflect our own estimates of assumptions that market participants would use in pricing the asset or liability Valuation techniques include use of option pricing models discounted cash flow models and similar techniques
The following tables show gross unrealized losses and fair values of the RCRA Trusts available for sale securities that have been in a continuous unrealized loss position for which an allowance for credit losses has not been recorded as of December 31 2024 and December 31 2023
The following table summarizes the balance by contractual maturity of the available for sale debt securities invested by the RCRA Trusts as of December 31 2024 Actual maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations before the underlying contracts mature
In preparing our Consolidated Financial Statements we utilize the asset and liability approach in accounting for income taxes We recognize income taxes in each of the jurisdictions in which we have a presence For each jurisdiction we estimate the actual amount of income taxes currently payable or receivable as well as deferred income tax assets and liabilities attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which these temporary differences are expected to be recovered or settled The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date
The tax impact of our ordinary business operations is affected by the mix of earnings across jurisdictions in which we operate by a benefit associated with depletion changes in valuation allowances and by the impact of certain entities being taxed in both their foreign jurisdiction and the U S including foreign tax credits for various taxes incurred
tax expense specific to the period included a net expense of 125 9 million The net expense relates to the following 99 9 million related to the impact of accruing withholding tax expense on expected foreign distributions associated with changes in management s indefinite reinvestment assertion on select foreign earnings under ASC 740 30 formerly APB 23 7 1 million related to true up of estimates from our U S and non U S tax return provisions 24 2 million related to changes to valuation allowances in Brazil the Netherlands and the U S 4 0 million related to share based excess benefit 2 5 million related to changes in tax rates and 6 2 million related to other miscellaneous expenses The tax expenses are partially offset by a net tax benefit related to changes in U S state tax law of 18 1 million
The tax impact of our ordinary business operations is affected by the mix of earnings across jurisdictions in which we operate by a benefit associated with depletion by a benefit associated with non U S incentives changes in valuation allowances and by the impact of certain entities being taxed in both their foreign jurisdiction and the U S including foreign tax credits for various taxes incurred
Tax expense specific to the period included a net benefit of 43 4 million The net benefit relates to the following 38 1 million related to true up of estimates primarily related to our U S tax return 24 4 million related to changes to
valuation allowances in Brazil and 11 6 million related to an increase in a U S deferred tax asset The tax benefits are partially offset by a net tax cost of 29 3 million related to income tax expense on undistributed earnings and 1 4 million of other miscellaneous costs
The tax impact of our ordinary business operations is affected by the mix of earnings across jurisdictions in which we operate by a benefit associated with depletion by a benefit associated with non U S incentives changes in valuation allowances and by the impact of certain entities being taxed in both their foreign jurisdiction and the U S including foreign tax credits for various taxes incurred
Tax expense specific to the period included a net expense of 26 2 million The net expense relates to the following 29 0 million related to true up of estimates primarily related to our U S tax return 4 8 million related to changes to valuation allowances in Brazil 4 0 million related to interest of effectively settled unrecognized tax benefits and 1 2 million of other miscellaneous costs The tax expenses are partially offset by a net tax benefit related to 12 8 million of RSUs vested in CY22 above grant price
We have certain non U S entities that are taxed in both their local jurisdiction and the U S As a result we have deferred tax balances for both jurisdictions As of December 31 2024 and 2023 these non U S deferred taxes are offset by approximately 199 6 million and 220 5 million respectively of anticipated foreign tax credits included within our depreciation and depletion components of deferred tax liabilities above We have recorded a valuation allowance against the anticipated foreign tax credits of 199 6 million and 220 5 million for December 31 2024 and 2023 respectively
As of December 31 2024 we had estimated carryforwards for tax purposes as follows net operating losses of 1 7 billion capital losses of 63 4 million foreign tax credits of 1 4 billion and 3 9 million of non U S business credits These carryforward benefits may be subject to limitations imposed by the Internal Revenue Code and in certain cases provisions of foreign law Approximately 1 1 billion of our net operating loss carryforwards relate to Brazil and can be carried forward indefinitely but are limited to 30 percent of taxable income each year The majority of the remaining net operating loss carryforwards relate to U S federal and certain U S states and can be carried forward indefinitely Of the 1 4 billion of foreign tax credits approximately 222 1 million have an expiration date of 2026 approximately 18 5 million have an expiration date of 2029 approximately 14 7 million have an expiration date of 2030 and approximately 52 2 million have an expiration date of 2034 The realization of our foreign tax credit carryforwards is dependent on market conditions tax law changes and other business outcomes including our ability to generate certain types of taxable income in the future Due to current business operations and future forecasts the Company has determined that no valuation allowance is required on its general basket foreign tax credits As a result of changes in U S tax law due to the Tax Cuts and Jobs Act the Company recorded valuation allowances against its branch basket foreign tax credits of 1 1 billion as of December 31 2024
As of December 31 2024 we have not recognized a deferred tax liability for un remitted earnings of approximately 873 7 million from certain foreign operations because we believe our subsidiaries have invested the undistributed earnings indefinitely or the earnings will be remitted in a tax neutral transaction It is not practicable for us to determine the amount of unrecognized deferred tax liability on these reinvested earnings As part of the accounting for the Tax Cuts and Jobs Act we recorded local country withholding taxes related to certain entities from which we began repatriating undistributed earnings and will continue to record local country withholding taxes including foreign exchange impacts on all future earnings
In assessing the need for a valuation allowance we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized We evaluate our ability to realize the tax benefits associated with deferred tax assets by analyzing the relative impact of all the available positive and negative evidence regarding our forecasted taxable income using both historical and projected future operating results the reversal of existing taxable temporary differences taxable income in prior carry back years if permitted and the availability of tax planning strategies The ultimate realization of deferred tax assets is dependent upon the generation of certain types of future taxable income during the periods in which those temporary differences become deductible In making this assessment we consider the scheduled reversal of deferred tax liabilities our ability to carry back the deferred tax asset projected future taxable income and tax planning strategies A valuation allowance will be recorded in each jurisdiction in which a deferred income tax asset is recorded when it is more likely than not that the deferred income tax asset will not be realized Changes in deferred tax asset valuation allowances typically impact income tax expense
For the year ended December 31 2024 the valuation allowance increased by 107 4 million of which a 105 4 million increase related to changes in the valuation allowance to U S branch foreign tax credits 11 3 million related to changes in the valuation allowance to U S state net operating losses and tax credits and a 2 8 million increase related to changes in valuation allowances in Canada These increases to the valuation allowance were partially offset by a decrease of 9 0 million related to changes in valuation allowances and currency translation in Brazil and 3 1 million changes in valuation allowances in other foreign jurisdictions
For the year ended December 31 2023 the valuation allowance increased by 512 0 million of which a 531 0 million increase related to changes in the valuation allowance to U S branch foreign tax credits and a 0 2 million increase related to changes in valuation allowances in other foreign jurisdictions These increases to the valuation allowance were partially offset by a decrease of 12 7 million related to changes in valuation allowances and currency translation in Brazil and 6 5 million changes in valuation allowances in other foreign jurisdictions
For the year ended December 31 2022 the valuation allowance increased by 135 2 million of which a 83 6 million increase related to changes in the valuation allowance to U S branch foreign tax credits a 13 2 million increase related to changes in valuation allowances and currency translation in Brazil and 46 8 million changes in valuation allowances in other foreign jurisdictions These increases to the valuation allowance were partially offset by a decrease of 1 5 million to net operating losses for certain U S states and 7 0 million changes in valuation allowances in other foreign jurisdictions
Accounting for uncertain income tax positions is determined by prescribing a minimum probability threshold that a tax position must meet before a financial statement benefit is recognized This minimum threshold is that a tax position is more likely than not to be sustained upon examination by the applicable taxing authority including resolution of any related appeals or litigation processes based on the technical merits of the position The tax benefit to be recognized is measured as the largest amount of benefit that is greater than a fifty percent likelihood of being realized upon ultimate settlement
As of December 31 2024 we had 14 2 million of gross uncertain tax positions If recognized the benefit to our effective tax rate in future periods would be approximately 11 5 million of that amount During 2024 we recorded net decreases in our uncertain tax positions of 11 6 million related to certain U S and non U S tax matters of which 11 1 million impacted the effective tax rate This decrease was offset by items not included in gross uncertain tax positions
Based upon the information available as of December 31 2024 it is reasonably possible that the amount of unrecognized tax benefits will change in the next twelve months however the change cannot reasonably be estimated
We recognize interest and penalties related to unrecognized tax benefits as a component of our income tax expense Interest and penalties accrued in our Consolidated Balance Sheets as of December 31 2024 and 2023 were 5 4 million and 6 4 million respectively and are included in other noncurrent liabilities in the Consolidated Balance Sheets
We operate in multiple tax jurisdictions both within the U S and outside the U S and face audits from various tax authorities regarding transfer pricing deductibility of certain expenses and intercompany transactions as well as other matters With few exceptions we are no longer subject to examination for tax years prior to 2017
Mosaic is continually under audit by various tax authorities in the normal course of business Such tax authorities may raise issues contrary to positions taken by the Company If such positions are ultimately not sustained by the Company this could result in material assessments to the Company The costs related to defending if needed such positions on appeal or in court may be material The Company believes that any issues considered are properly accounted for
We are currently under audit by the Internal Revenue Service for the tax years ended December 31 2018 and December 31 2020 Based on the information available we do not anticipate significant changes to our unrecognized tax benefits as a result of these examinations other than the amounts discussed above
We are currently under audit by the Canada Revenue Agency for the tax year ended December 31 2020 Based on the information available we do not anticipate significant changes to our unrecognized tax benefits as a result of these examinations other than the amounts discussed above
s in the period in which we have an existing legal obligation associated with the retirement of a tangible long lived asset and the amount of the liability can be reasonably estimated The ARO is recognized at fair value when the liability is incurred with a corresponding increase in the carrying amount of the related long lived asset We depreciate the tangible asset over its estimated useful life The liability is adjusted in subsequent periods through accretion expense which represents the increase in the present value of the liability due to the passage of time Such depreciation and accretion expenses are included in cost of goods sold for operating facilities and other operating expense for indefinitely closed facilities
Our legal obligations related to asset retirement require us to i reclaim lands disturbed by mining as a condition to receive permits to mine phosphate ore reserves ii treat low pH process water in Gypstacks to neutralize acidity iii close and monitor Gypstacks at our Florida and Louisiana facilities at the end of their useful lives iv remediate certain other conditional obligations v remove all surface structures and equipment plug and abandon mine shafts contour and revegetate as necessary and monitor for five years after closing our Carlsbad New Mexico facility vi decommission facilities manage tailings and execute site reclamation at our Saskatchewan potash mines at the end of their useful lives vii decommission mines in Brazil and Peru and viii decommission plant sites and closed Gypstacks in Brazil The estimated liability for these legal obligations is based on the estimated cost to satisfy the above obligations which is discounted using a credit adjusted risk free rate
A majority of our ARO relates to Gypstack Closure Costs in Florida and Louisiana For financial reporting purposes we recognize our estimated Gypstack Closure Costs at their present value This present value determined for financial reporting purposes is reflected on our Consolidated Balance Sheets in accrued liabilities and other noncurrent liabilities As of December 31 2024 and 2023 the present value of our North American Gypstack Closure Costs ARO reflected in our Consolidated Balance Sheet was approximately 1 5 billion and 1 2 billion respectively
to resolve claims relating to our management of certain waste materials onsite at our Riverview New Wales Green Bay South Pierce and Bartow fertilizer manufacturing facilities in Florida and our Faustina and Uncle Sam facilities in Louisiana This followed a 2003 announcement by the EPA Office of Enforcement and Compliance Assurance that it would be targeting facilities in mineral processing industries including phosphoric acid producers for a thorough review under the U S Resource Conservation and Recovery Act
and related state laws As discussed below a separate consent decree was previously entered into with the EPA and the FDEP with respect to RCRA compliance at the Plant City Facility that we acquired as part of our acquisition of the Florida phosphate assets and assumption of certain related liabilities of CF Industries Inc
The remaining monetary obligations under the 2015 Consent Decrees include a provision of additional financial assurance for the estimated Gypstack Closure Costs for Gypstacks at the covered facilities The RCRA Trusts are discussed in Note 12 to our Consolidated Financial Statements In addition we have agreed to guarantee the difference between the amounts held in each RCRA Trust including any earnings and the estimated closure and long term care costs
ARO associated with the facilities covered by the 2015 Consent Decrees determined using the assumptions used for financial reporting purposes was approximately 2 3 billion and the present value of our Gypstack Closure Costs ARO reflected in our Consolidated Balance Sheet for those facilities was approximately 1 1 billion
As part of the CF Phosphate Assets Acquisition we assumed certain AROs related to Gypstack Closure Costs at both the Plant City Facility and a closed Florida phosphate concentrates facility in Bartow Florida the
that we acquired Associated with these assets are two related financial assurance arrangements for which we became responsible and that provided sources of funds for the estimated Gypstack Closure Costs for these facilities Pursuant to federal or state laws the applicable government entities are permitted to draw against such amounts in the event we cannot perform such closure activities One of the financial assurance arrangements was initially a trust the
established to meet the requirements under a consent decree with the EPA and the FDEP with respect to RCRA compliance at the Plant City Facility The Plant City Trust also satisfied Florida financial assurance requirements at that site Beginning in September 2016 as a substitute for the financial assurance provided through the Plant City Trust we have provided financial assurance for the Plant City Facility in the form of a surety bond the
established to meet the requirements under Florida financial assurance regulations that apply to the Bonnie Facility In July 2018 we received 21 0 million from the Bonnie Facility Trust by substituting for the trust fund a financial test mechanism
supported by a corporate guarantee as allowed by state regulations Both financial assurance funding obligations require estimates of future expenditures that could be impacted by refinements in scope technological developments new information cost inflation changes in regulations discount rates and the timing of activities Under our current approach to satisfying applicable requirements additional financial assurance would be required in the future if increases in cost estimates exceed the face amount of the Plant City Bond or the amount supported by the Bonnie Financial Test
As of December 31 2024 and 2023 the aggregate amounts of AROs associated with the combined Plant City Facility and Bonnie Facility Gypstack Closure Costs included in our consolidated balance sheet were 368 7 million and 361 8 million respectively The aggregate amount represented by the Plant City Bond exceeds the present value of the aggregate amount of ARO associated with that facility This is because the amount of financial assurance we are required to provide represents the aggregate undiscounted estimated amount to be paid by us in the normal course of our Phosphates business over a period that may not end until three decades or more after the Gypstack has been closed whereas the ARO included in our Consolidated Balance Sheet reflects the discounted present value of those estimated amounts
We periodically enter into derivatives to mitigate our exposure to foreign currency risks interest rate movements and the effects of changing commodity prices We record all derivatives on the Consolidated Balance Sheets at fair value The fair value of these instruments is determined by using quoted market prices third party comparables or internal estimates We net our derivative asset and liability positions when we have a master netting arrangement in place Changes in the fair value of the foreign currency commodity and freight derivatives are immediately recognized in earnings As of December 31 2024 and 2023 the gross asset position of our derivative instruments was 3 1 million and 36 4 million respectively and the gross liability position of our liability instruments was 87 8 million and 17 2 million respectively
We do not apply hedge accounting treatments to our foreign currency exchange contracts commodities contracts or freight contracts Unrealized gains and losses on foreign currency exchange contracts used to hedge cash flows related to the production of our products are included in cost of goods sold in the Consolidated Statements of Earnings Unrealized gains and losses on commodities contracts and certain forward freight agreements are also recorded in cost of goods sold in the Consolidated Statements of Earnings Unrealized gains or losses on foreign currency exchange contracts used to hedge cash flows that are not related to the production of our products are included in the foreign currency transaction gain loss caption in the Consolidated Statements of Earnings
From time to time we enter into fixed to floating interest rate contracts We apply fair value hedge accounting treatment to these contracts Under these arrangements we agree to exchange at specified intervals the difference between fixed and floating interest amounts calculated by reference to an agreed upon notional principal amount The mark to market of these fair value hedges is recorded as gains or losses in interest expense We had no fixed to floating interest rate swap agreements in effect as of December 31 2024 and 2023
Certain of our derivative instruments contain provisions that are governed by International Swap and Derivatives Association agreements with the counterparties These agreements contain provisions that allow us to settle for the net amount between payments and receipts and also state that if our debt were to be rated below investment grade certain counterparties to the derivative instruments could request full collateralization on derivative instruments in net liability positions The aggregate fair value of all derivative instruments with credit risk related contingent features that were in a liability position as of December 31 2024 and 2023 was 58 1 million and 15 6 million respectively We have no cash collateral posted in association with these contracts If the credit risk related contingent features underlying these agreements were triggered on December 31 2024 we would have been required to post an additional 54 9 million of collateral assets which are either cash or U S Treasury instruments to the counterparties
Financial instruments that may subject us to concentrations of credit risk consist primarily of derivatives cash and cash equivalents and accounts receivable We enter into foreign exchange certain commodity and interest rate derivatives and place our cash and cash equivalents with a diversified group of highly rated counterparties We have a diverse base of customers to which we grant credit terms in the normal course of business which are designed to mitigate concentrations of credit risk We continually monitor our positions and the credit ratings of the counterparties involved and limit the amount of credit exposure to any one party We manage our exposure to counterparty credit risk through specific minimum credit standards establishing credit limits diversification of counterparties monitoring procedures and utilization of credit insurance or cash collateral in certain circumstances While we may be exposed to potential losses due to the credit risk of non performance by these counterparties material losses are not anticipated We closely monitor the credit risk associated with our counterparties and customers and to date have not experienced material losses
The foreign currency derivative instruments that we currently use are forward contracts and zero cost collars which typically expire within 18 months Most of the valuations are adjusted by a forward yield curve or interest rates In such cases these derivative contracts are classified within Level 2 Some valuations are based on exchange quoted prices which are classified as Level 1 As of December 31 2024 our foreign currency contracts were Level 2 Changes in the fair market values of these contracts are recognized in the Consolidated Financial Statements as a component
of cost of goods sold in our Corporate Eliminations and Other segment or foreign currency transaction gain loss As of December 31 2024 and 2023 the gross asset position of our foreign currency derivative instruments was 3 1 million and 36 4 million respectively and the gross liability position of our foreign currency derivative instruments was 86 1 million and 8 0 million respectively and is included in Accrued Liabilities in the Consolidated Balance Sheets
The commodity contracts primarily relate to natural gas The commodity derivative instruments that we currently use are forward purchase contracts swaps and three way collars The natural gas contracts settle using NYMEX futures or AECO price indexes which represent fair value at any given time The contracts maturities and settlements are scheduled for future months and settlements are scheduled to coincide with anticipated gas purchases during those future periods Quoted market prices from NYMEX and AECO are used to determine the fair value of these instruments These market prices are adjusted by a forward yield curve and are classified within Level 2 Changes in the fair market values of these contracts are recognized in the Consolidated Financial Statements as a component of cost of goods sold in our Corporate Eliminations and Other segment As of December 31 2024 and 2023 the gross asset position of our commodity derivative instruments was zero and the gross liability position of our commodity derivative instruments was 1 7 million and 9 2 million respectively
We manage interest expense through interest rate contracts to convert a portion of our fixed rate debt into floating rate debt From time to time we also enter into interest rate swap agreements to hedge our exposure to changes in future interest rates related to anticipated debt issuances Valuations are based on external pricing sources and are classified as Level 2 Changes in the fair market values of these contracts are recognized in the Consolidated Financial Statements as a component of interest expense We did not hold any interest rate derivative positions as of December 31 2024 or 2023
For cash and cash equivalents accounts receivable net accounts payable structured accounts payable arrangements and short term debt the carrying amount approximates fair value because of the short term maturity of those instruments
of our Notes to Consolidated Financial Statements Included in long term debt is floating rate debt of 570 million Our floating rate debt is non public and bears a variable SOFR based rate and consists of our borrowings under our term loan facility Th
e fair value of our floating rate debt approximates the carrying value and is estimated based on market based inputs including interest rates and credit spreads which results in a Level 2 classification The fair value of fixed rate long term debt including the current portion is estimated using quoted market prices for the publicly registered notes and debentures classified as Level 1 and Level 2 respectively within the fair value hierarchy depending on the market liquidity of the debt For information regarding the fair value of our marketable securities held in trusts see Note 12 of our Notes to Consolidated Financial Statements
We enter into various contracts that include indemnification and guarantee provisions as a routine part of our business activities Examples of these contracts include asset purchase and sale agreements surety bonds financial assurances to regulatory agencies in connection with reclamation and closure obligations commodity sale and purchase agreements and other types of contractual agreements with vendors and other third parties These agreements indemnify counterparties for matters such as reclamation and closure obligations tax liabilities environmental liabilities litigation and other matters as well as breaches by Mosaic of representations warranties and covenants set forth in these agreements In many cases we are essentially guaranteeing our own performance in which case the guarantees do not fall within the scope of the accounting and disclosures requirements under U S GAAP Our maximum potential exposure under our indemnification arrangements can range from a specified dollar amount to an unlimited amount depending on the nature of the transaction Many of the guarantees and indemnities we issue to third parties do not limit the amount or duration of our obligations to perform under them For these guarantees and indemnities we may not be able to estimate what our liability would be until a claim is made for payment or performance due to the contingent nature of these arrangements Based on our current understanding of the relevant facts we do not believe that we will be required to make any material payments under these indemnity provisions
We sponsor pension and postretirement benefits through a variety of plans including defined benefit plans defined contribution plans and postretirement benefit plans in North America and certain of our international locations We reserve the right to amend modify or terminate the Mosaic sponsored plans at any time subject to provisions of the Employee Retirement Income Security Act of 1974
During fiscal 2022 we terminated the defined benefit pension plan in the U S which was frozen at the time of termination In connection with the plan termination we settled all future obligations under the terminated plan through a combination of lump sum payments to eligible participants who elected to receive them through a lump sum window and the transfer of any remaining benefit obligations under the terminated plans to a third party insurance company under a group annuity contract As a result of these actions we recognized a non cash pre tax pension settlement charge of 41 9 million in our 2022 Consolidated Statements of Earnings in Other income expense
We sponsor various defined benefit pension plans in Canada which are closed to new participants Benefits are based on different combinations of years of service and compensation levels depending on the plan Generally contributions to Canadian plans are made in accordance with the Pension Benefits Act instituted by the province of Saskatchewan Certain employees in Canada whose pension benefits exceed Canada Revenue Agency limitations are covered by supplementary non qualified unfunded pension plans During 2023 we terminated certain defined pension plans in Canada by transferring remaining benefit obligations for participants to a third party insurance company under a group annuity contract As a result of these actions we recognized a non cash pre tax settlement charge of 42 4 million in our 2023 Consolidated Statements of Earnings in Other income expense
We sponsor various defined benefit pension plans in Brazil and we acquired multi employer pension plans for certain of our Brazil associates All our pension plans are governed by the Brazilian pension plans regulatory agency National Superintendence of Supplementary Pensions Our Brazil plans are not individually significant to the Company s consolidated financial statements after factoring in the multi employer pension plan indemnification that we acquired through an acquisition We made contributions to these plans net of indemnification of 0 4 million and 0 1 million for the years ended December 31 2024 and 2023 respectively
The accumulated benefit obligation for the defined benefit pension plans was 114 6 million and 119 6 million as of December 31 2024 and 2023 respectively In 2025 we expect the related plans to pay benefit payments of approximately 3 4 million and to contribute cash of at least 0 8 million to the pension plans to meet minimum funding requirements
The Company s overall investment strategy is to obtain sufficient return and provide adequate liquidity to meet the benefit obligations of our pension plans The primary investment objective is to secure the promised pension benefits through capital preservation and appreciation to better manage the asset liability gap and interest rate risk A secondary investment objective is to most effectively manage investment volatility to reduce the variability of the Company s required contributions A significant amount of the assets are invested in funds that are managed by Mosaic s investment advisor and reviewed by Mosaic management Plan assets are primarily valued based on external pricing sources and are classified as Level 2 We do not have significant concentrations of credit risk or industry sectors within the plan assets Fair value measurements of plan assets was 146 3 million at December 31 2024 and was invested approximately 75 in fixed income securities 20 in equity securities and 5 in other investment funds and cash
Eligible salaried and non union hourly employees in the U S participate in a defined contribution investment plan which permits employees to defer a portion of their compensation through payroll deductions and provides matching contributions We match 100 of the first 3 of the participant s contributed pay plus 50 of the next 3 of the participant s contributed pay subject to Internal Revenue Service limits Participant contributions matching contributions and the related earnings immediately vest Mosaic also provides an annual non elective employer contribution feature for eligible salaried and non union hourly employees based on the employee s age and eligible pay Participants are generally vested in the non elective employer contributions after three years of service In addition a discretionary feature of the plan allows the Company to make additional contributions to employees Certain union employees participate in a defined contribution retirement plan based on collective bargaining agreements
Canadian salaried and non union hourly employees participate in an employer funded plan with employer contributions similar to the U S plan The plan provides a profit sharing component which is paid each year We also sponsor one mandatory union plan in Canada Benefits in these plans vest after two years of consecutive service
The North American Retiree Health Plans are unfunded and the projected benefit obligation was 20 6 million and 22 8 million as of December 31 2024 and 2023 respectively This liability should continue to decrease due to our limited exposure The related income statement effects of the Retiree Health Plans are not material to the Company We anticipate contributing cash of at least 1 9 million in 2025 to the postretirement medical benefit plans to fund anticipated benefit payments
In 2022 our Board of Directors approved two share repurchase programs for a total of 3 0 billion Our repurchase programs allow the Company to repurchase shares of our Common Stock through open market purchases accelerated share repurchase arrangements privately negotiated transactions or otherwise and have no set expiration date
with a third party financial institution to repurchase 300 million of our Common Stock At inception we paid the financial institution 300 million and took initial delivery of 4 659 290 shares of our Common Stock representing an estimated 80 of the total shares expected to be delivered under the 2023 ASR Agreement In March 2023 the transaction was completed and we received an additional 965 284 shares of Common Stock In total 5 624 574 shares were delivered under the 2023 ASR Agreement at an average purchase price of 53 34 per share
During the year ended December 31 2023 we repurchased 16 879 059 shares of Common Stock in the open market for approximately 748 0 million at an average purchase price per share of 44 31 This includes the 5 624 574 shares purchased under the 2023 ASR Agreement
The extent to which we repurchase our shares and the timing of any such repurchases depend on a number of factors including market and business conditions the price of our shares our ability to access capital resources our liquidity and corporate regulatory and other considerations
was approved by our stockholders and became effective on May 25 2023 It permits up to 18 million shares of common stock to be issued under share based awards granted under this plan The 2023 Stock and Incentive Plan provides for grants of stock options restricted stock restricted stock units performance units and a variety of other share based and non share based awards Our employees officers directors consultants agents advisors and independent contractors as well as other designated individuals are eligible to participate in the 2023 Stock and Incentive Plan
was approved by our stockholders and became effective on May 15 2014 It permits up to 25 million shares of common stock to be issued under share based awards granted under this plan The 2014 Stock and Incentive Plan provides for grants of stock options restricted stock restricted stock units performance units and a variety of other share based and non share based awards Our employees officers directors consultants agents advisors and independent contractors as well as other designated individuals are eligible to participate in the 2014 Stock and Incentive Plan
which was approved by our stockholders and became effective in 2004 and subsequently amended provided for the grant of shares and share options to employees for up to 25 million shares of common stock While awards may no longer be made under the Omnibus Plan it will remain in effect with respect to the awards that had been granted thereunder prior to its termination
Mosaic settles stock option exercises restricted stock units and certain performance units and performance shares with newly issued common shares The Compensation Committee of the Board of Directors administers these plans subject to their respective provisions and applicable law
Stock options are granted with an exercise price equal to the market price of our stock at the date of grant and have a ten year contractual term The fair value of each option award is estimated on the date of the grant using the Black Scholes option valuation model Stock options generally vest in equal annual installments in the first three years following the date of grant graded vesting Stock options are expensed on a straight line basis over the required service period based on the estimated fair value of the award on the date of grant net of estimated forfeitures
Assumptions used to calculate the fair value of stock options awarded in 2017 are noted in the following table There were no stock options granted or issued in 2024 2023 or 2022 Expected volatility is based on the simple average of implied and historical volatility using the daily closing prices of the Company s stock for a period equal to the expected term of the option The risk free interest rate is based on the U S Treasury rate at the time of the grant for instruments of comparable life
Restricted stock units are issued to various employees officers and directors at a value equal to the market price of our stock at the date of grant The fair value of restricted stock units is equal to the market price of our stock at the date of grant Restricted stock units generally cliff vest after three years of continuous service and are expensed on a straight line basis over the required service period based on the estimated grant date fair value net of estimated forfeitures
performance units were granted respectively Final performance units are awarded based on the increase or decrease subject to certain limitations in Mosaic s share price from the grant date to the third anniversary of the award plus dividends a measure of total stockholder return or TSR The beginning and ending stock prices are based on a 30 trading day average stock price Holders of the awards must be employed at the end of the performance period in order for any units to vest except in the event of death disability or retirement at or after age 60 certain changes in control or the exercise of Committee or Board discretion as provided in the related award agreements
The fair value of each TSR performance unit is determined using a Monte Carlo simulation This valuation methodology utilizes assumptions consistent with those of our other share based awards and a range of ending stock prices however the expected term of the awards is three years which impacts the assumptions used to calculate the fair value of performance units as shown in the table below 241 189 354 500 and 195 755 of the TSR performance awards issued in 2024 2023 and 2022 respectively are to be settled in cash and are therefore accounted for as a liability with changes in value recorded through earnings during the service period The remaining TSR performance units issued in 2024 2023 and 2022 are considered equity classified fixed awards measured at grant date fair value and not subsequently re measured All of the TSR performance units cliff vest after three years of continuous service and are expensed on a straight line basis over the required service period based on the estimated grant date fair value of the award net of estimated forfeitures
We recorded share based compensation expense of 20 2 million 37 8 million and 61 1 million for 2024 2023 and 2022 respectively The tax benefit related to share exercises and lapses in the year was 1 0 million 9 0 million and 7 5 million for 2024 2023 and 2022 respectively
As of December 31 2024 there was 15 8 million of total unrecognized compensation cost related to options restricted stock units and performance units and shares granted under the 2014 Stock and Incentive Plan and the Omnibus Plan The unrecognized compensation cost is expected to be recognized over a weighted average period of one year No options vested in 2024 2023 and 2022
We received 16 0 million from exercises of share based payment arrangements for 2022 There was no cash received from exercises of share based payment arrangements for 2024 and 2023 We incurred a tax benefit for tax deductions from options of 4 1 million 7 9 million and 13 4 million in 2024 2023 and 2022 respectively
We lease certain plants warehouses terminals office facilities railcars and various types of equipment under operating leases some of which include rent payment escalation clauses with lease terms ranging from one to 43 years In addition to minimum lease payments some of our office facility leases require payment of our proportionate share of real estate taxes
We also have purchase obligations to purchase goods and services primarily for raw materials used in products sold to customers In 2013 we entered into an ammonia supply agreement with CF that commenced in 2017 under which Mosaic agreed to purchase approximately 545 000 to 725 000 tonnes of ammonia per year at a price tied to the prevailing price of U S natural gas This agreement ended effective January 1 2025
We have long term agreements for the purchase of sulfur which is used in the production of phosphoric acid and natural gas which is a significant raw material used primarily in the solution mining process in our Potash segment as well as in our phosphate concentrates plants
Most of our export sales of potash crop nutrients are marketed through a North American export association Canpotex which may fund its operations in part through third party financing facilities As a member Mosaic or our subsidiaries are contractually obligated to reimburse Canpotex for their pro rata share of any operating expenses or other liabilities incurred The reimbursements are made through reductions to members cash receipts from Canpotex
We incur liabilities for reclamation activities and Gypstack closures in our Florida and Louisiana operations where in order to obtain necessary permits we must either pass a test of financial strength or provide credit support typically in the form of cash deposits surety bonds or letters of credit The surety bonds generally expire within one year or less but a substantial portion of these instruments provide financial assurance for continuing obligations and therefore in most cases must be renewed on an annual basis As of December 31 2024 we had 793 7 million in surety bonds outstanding of which 411 8 million is for reclamation obligations primarily related to mining in Florida In addition included in the total amount is 327 1 million reflecting our updated closure cost estimates delivered to the EPA as a substitute for the financial assurance provided through the Plant City Trust The remaining balance in surety bonds outstanding of 54 8 million is for other matters
We have contingent environmental liabilities that arise principally from three sources i facilities currently or formerly owned by our subsidiaries or their predecessors ii facilities adjacent to currently or formerly owned facilities and iii third party Superfund or state equivalent sites At facilities currently or formerly owned by our subsidiaries or their predecessors the historical use and handling of regulated chemical substances crop and animal nutrients and additives and by product or process tailings have resulted in soil surface water and or groundwater contamination Spills or other releases of regulated substances subsidence from mining operations and other incidents arising out of operations including accidents have occurred previously at these facilities and potentially could occur in the future possibly requiring us to undertake or fund cleanup or result in monetary damage awards fines penalties other liabilities injunctions or other court or administrative rulings In some instances pursuant to consent orders or agreements with governmental agencies we are
undertaking certain remedial actions or investigations to determine whether remedial action may be required to address contamination At other locations we have entered into consent orders or agreements with appropriate governmental agencies to perform required remedial activities that will address identified site conditions Taking into consideration established reserves of approximately 197 5 million and 203 2 million as of December 31 2024 and 2023 respectively of which 90 8 million and 148 9 million are included in Accrued Liabilities and 106 7 million and 54 3 million in Other Non Current Liabilities in the Consolidated Balance Sheets as of December 31 2024 and 2023 respectively expenditures for these known conditions currently are not expected individually or in the aggregate to have a material effect on our business or financial condition However material expenditures could be required in the future to remediate the contamination at known sites or at other current or former sites or as a result of other environmental health and safety matters Below is a discussion of certain environmental matters
In April 2022 we confirmed the presence of a cavity in and liner tear beneath the southern part of the active phosphogypsum stack at the Company s New Wales facility in Florida This resulted in process water draining beneath the stack The circumstances were reported to the FDEP and the EPA Phase I of the repairs consisting of stabilizing
the cavity by depositing low pressure grout into it began in July 2022 and now is complete Phase II work which consists of injecting high pressure grout beneath the stack to restore the geological confining layer beneath it began in early in 2023 and the work is now complete
As of December 31 2024 we have a reserve of 14 7 million included in the above amount for the estimated repairs We are unable to estimate at this time potential future additional financial impacts or a range of loss if any due to the ongoing evaluation
In October 2023 we observed a series of seismic acoustic emissions and changes to piezometric water levels in a part of the Phase II West phosphogypsum stack at the New Wales Florida facility These observations may be an indication of a breach in the stack liner system and were reported to the FDEP and EPA We have begun repairs stabilization grouting is now complete and high pressure grouting began in October 2024 The area of the stack is not in use for either process water storage or additional gypsum placement It lies within a zone of capture of a recovery groundwater well which is operating as intended No offsite impacts are known or expected
As of December 31 2024 we have a reserve of 81 5 million included in the above established reserves for estimated repairs We are unable to estimate at this time potential future additional financial impacts or a range of loss if any due to the ongoing evaluation
We have certain financial assurance and other obligations under consent decrees and a separate financial assurance arrangement relating to our facilities in Florida and Louisiana These obligations are discussed in Note 14 of our Notes to Consolidated Financial Statements
Superfund and equivalent state statutes impose liability without regard to fault or to the legality of a party s conduct on certain categories of persons who are considered to have contributed to the release of hazardous substances into the environment Under Superfund or its various state analogues one party may under certain circumstances be required to bear more than its proportionate share of cleanup costs at a site where it has liability if payments cannot be obtained from other responsible parties Currently certain of our subsidiaries are involved or concluding involvement at several Superfund or equivalent state sites Our remedial liability from these sites alone or in the aggregate currently is not expected to have a material effect on our business or financial condition As more information is obtained regarding these sites and the potentially responsible parties involved this expectation could change
We believe that pursuant to several indemnification agreements our subsidiaries are entitled to at least partial and in many instances complete indemnification for the costs that may be expended by us or our subsidiaries to remedy environmental issues at certain facilities These agreements address issues that resulted from activities occurring prior to our acquisition of facilities or businesses from parties including but not limited to ARCO BP Beatrice Fund for Environmental Liabilities Conoco Conserv Estech Inc Kaiser Aluminum Chemical Corporation Kerr McGee Inc PPG Industries Inc The Williams Companies CF and certain other private parties Our subsidiaries have already received and anticipate receiving amounts pursuant to the indemnification agreements for certain of their expenses incurred to date as well as future anticipated expenditures We record potential indemnifications as an offset to the established accruals when they are realizable or realized The failure of an indemnitor to fulfill its obligations could result in future costs that could be material
Our Brazilian subsidiaries are engaged in a number of judicial and administrative proceedings regarding labor environmental mining and civil claims that allege aggregate damages and or fines of approximately 559 2 million We estimate that our probable aggregate loss with respect to these claims is approximately 79 3 million which is included in our accrued liabilities in our Consolidated Balance Sheets at December 31 2024 Approximately 377 1 million of the maximum potential loss above relates to labor claims of which approximately 62 0 million is included in accrued liabilities in our Consolidated Balance Sheets at December 31 2024
Based on Brazil legislation and the current status of similar labor cases involving unrelated companies we believe we have recorded adequate loss contingency reserves sufficient to cover our estimate of probable losses If the status of similar cases involving unrelated companies were to adversely change in the future our maximum exposure could increase and additional accruals could be required
Our Brazilian subsidiaries are engaged in a number of judicial and administrative proceedings relating to various non income tax matters We estimate that our maximum potential liability with respect to these matters is approximately 601 8 million of which 204 0 million is subject to an indemnification agreement entered into with Vale S A in connection with an acquisition
Approximately 311 9 million of the maximum potential liability relates to a Brazilian federal value added tax PIS and COFINS and tax credit cases while the majority of the remaining amount relates to various other non income tax cases The maximum potential liability can increase with new audits from Brazilian tax authorities Based on Brazil tax legislation and the current status of similar tax cases involving unrelated taxpayers we believe we have recorded adequate loss contingency reserves sufficient to cover our estimate of probable losses which are immaterial If the status of similar tax cases involving unrelated taxpayer changes in the future additional accruals could be required
We also have certain other contingent liabilities with respect to judicial administrative and arbitration proceedings and claims of third parties including tax matters arising in the ordinary course of business We do not believe that any of these contingent liabilities will have a material adverse impact on our business or financial condition results of operations and cash flows
We enter into transactions and agreements with certain of our non consolidated companies and other related parties from time to time As of December 31 2024 and 2023 we had amounts included in Accounts Receivable and Accounts Payable on our Consolidated Balances due to our non consolidated companies of which the net amount totaled 46 5 million and 0 8 million respectively
As part of the MWSPC joint venture which was in place through December 24 2024 we marketed approximately 25 of the MWSPC production for which approximately 18 4 million 17 5 million and 23 1 million is included in revenue for the years ended December 31 2024 2023 and 2022 respectively
The reportable segments are determined by management based upon factors such as products and services production processes technologies market dynamics and for which segment financial information is available for our chief operating decision maker Our chief operating decision maker is our chief executive officer
For a description of our business segments see Note 1 of our Notes to Consolidated Financial Statements The accounting policies of the segments are the same as those described in the summary of significant accounting policies We evaluate performance based on the gross margin and operating earnings of the respective business segments which includes certain allocations of corporate selling general and administrative expenses The segment results may not represent the actual results that would be expected if they were independent stand alone businesses Intersegment eliminations including profit on intersegment sales mark to market gains losses on derivatives debt expenses and the results of the China and India distribution business are included within Corporate Eliminations and Other Certain selling general and administrative costs that are not controllable by the business segments are included within Corporate Eliminations and Other
For the Phosphates Potash and Mosaic Fertilizantes segments the chief operating decision maker uses both segment gross margin and operating earnings to allocate resources to each segment predominantly in the annual budget and forecasting process The chief operating decision maker considers forecast to actual variances on a monthly basis for both profit measures when making decisions about allocating capital and personnel to the segments The chief operating decision maker also uses segment gross margin for evaluating product pricing and segment profit or loss from operations to assess the performance for each segment by comparing the results and return on assets of each segment with one another
The Corporate Eliminations and Other category includes the results of our ancillary distribution operations in India and China For the years ended December 31 2024 2023 and 2022 distribution operations in India and China had revenues of 519 6 million 898 9 million and 1 1 billion respectively and gross margins of 39 7 million 16 8 million and 130 9 million respectively These operations do not meet the quantitative thresholds for determining reportable segments
Other operating expenses typically relate to five major categories 1 AROs 2 environmental and legal reserves 3 idle facility costs 4 insurance reimbursements and 5 gain loss on sale or disposal of fixed assets
Canpotex sales to the ultimate third party customers are made to customers in various countries The countries with the largest portion of third party customer sales are Brazil China India and Indonesia
The Company s management is responsible for establishing and maintaining effective internal control over financial reporting as defined in Rule 13a 15 f under the Securities Exchange Act of 1934 The Company s internal control system is a process designed to provide reasonable assurance to our management Board of Directors and stockholders regarding the reliability of financial reporting and the preparation and fair presentation of our consolidated financial statements for external reporting purposes in accordance with U S GAAP and includes those policies and procedures that
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in conformity with U S GAAP and that receipts and expenditures are being made only in accordance with authorizations from our management and Board of Directors and
Because of its inherent limitations internal control over financial reporting may not prevent or detect misstatements Also projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate
Management assessed the effectiveness of the Company s internal control over financial reporting as of December 31 2024 In assessing the effectiveness of our internal control over financial reporting as of December 31 2024 management used the control criteria framework of the Committee of Sponsoring Organizations COSO of the Treadway Commission published in its report entitled
Based on their evaluation management concluded that the Company s internal control over financial reporting was effective as of December 31 2024 KPMG LLP the independent registered public accounting firm that audited the financial statements included in this Form 10 K has issued an auditors report on the Company s internal control over financial reporting as of December 31 2024

Company Name	MOSAIC CO Vist SEC web-site
Category	AGRICULTURE CHEMICALS
Trading Symbol	MOS