Mosaic Company said it has settled a lawsuit filed by environmental groups including the Sierra Club that will now allow the fertilizer producer to expand a major phosphate mine in South Fort Meade, Fla.
As part of the deal, Mosaic will donate 4,171 recently purchased acres the environmental groups want to be turned into a state park.
A U.S. District Court judge is expected to approve the agreement in a hearing next month, Mosaic said on Tuesday. Production at the South Fort Meade mine, which supplies 20 percent of North America's phosphate reserves and employs 200, should resume shortly thereafter.
Phosphate is the second-most important fertilizer for farmers to apply to fields, after nitrogen. Mosaic's shares have suffered during the dispute over the mine and are down more than 30 percent in the past year.
"Our supply of phosphate rock in Florida is secure for the next 10 years," Mosaic Chief Executive Jim Prokopanko told Reuters. "The settlement should remove a question that investors have had."
In July 2010, a judge approved a restraining order that effectively suspended a U.S. Army Corps of Engineers permit that Mosaic was using to expand the South Fort Meade phosphate mine.
The case wound through several courts before a federal appeals court ruled in Mosaic's favor last April, sending the case back to a lower court. That lower court dealt Mosaic a blow last year when it essentially reaffirmed its initial finding and blocked the permit.
The settlement, in the works for a year, ends the legal wrangling and allows Mosaic to mine. The Sierra Club gets some land preserved.
"It came down to the realization that it was unsure on either side," Prokopanko said. "We were confident that we were going to win, but it wasn't certain. They were confident, but they mustn't have been certain."
The Sierra Club was not available for comment.
Mosaic will donate a 4,100-acre ranch in southwest Florida for use as a state park. The company bought the ranch in bankruptcy auction last fall for $10 million after the Sierra Club and other environmental groups expressed interest in having it preserved.
"We understood that this would be appealing to them and that was probably the last visible thing to put the deal together," said Prokopanko. "Their interest was to preserve a certain amount of land, and this accomplished that."
Mosaic also agreed to preserve 130 acres of wetland connected to the 10,856-acre South Fort Meade mine.
The agreement to expand the South Fort Meade mine took more than nine years from when the permitting process began.
Mosaic is about to begin the process to obtain expansion permits for two other Florida mines, which it expects to take six years.
"We have a system of regulation that is suffocating and unnecessary," said Prokopanko. "Everything has to be considered and everybody has a veto. It's a lot to go through."
Prokopanko pointed to Peru, where Mosaic was able to build a new phosphate mine in less than five years with partners Vale SA and Mitsui & Co Ltd.
"I don't think it's political in the United States," he said. "It's just the nature of the regulatory system that's been developed, the complexity of the laws, and a court system that can only slow you down."