PLYMOUTH, Minn. -- The Mosaic Company announced today that repairs at its Faustina, La., plant -- where damage was more extensive than at first thought -- are expected to be completed in six to 12 weeks, depending on a further damage assessment.

Mosaic's Faustina ammonia plant suffered damage in a minor explosion earlier this month due to an apparent failure of a welded joint in a heat exchanger vessel. The explosion resulted in no injuries and minor damage to adjacent plants. Mosaic continues to review the incident and indicated that insurance coverage is available for losses which exceed a deductible of $10 million.

To effectively manage its inventory and working capital levels and to mitigate the cost of purchased ammonia, Mosaic plans to temporarily reduce phosphate fertilizer production at Faustina while repairs are being completed.

Softer than expected market conditions for phosphates and the current production plans at Faustina have resulted in the lowering of Mosaic's fiscal 2007 phosphates sales volume guidance to 8.5 to 9.3 million metric tonnes, including feed and GTSP sales, from its earlier estimate of 9.5 to 9.9 million metric tonnes. Export sales have been negatively impacted by a number of factors including a severe drought in Australia, subsidy uncertainties in Pakistan and continued poor farm economics in Brazil.

In addition, the North American fall fertilizer season is also off to a slower than anticipated start. As a result, Mosaic does not expect to meet its fiscal 2007 phosphates operating earnings improvement target of $100 million.

"While domestic sales have increased modestly in October, it appears unlikely that second quarter sales volumes for our phosphates business will exceed first quarter levels, as we had previously expected," stated Jim Prokopanko, chief operating officer of Mosaic. "The damage to our ammonia plant at Faustina was more extensive than we initially estimated, and we will promptly begin repair work so that it can be fully operational as soon as possible.

"We remain optimistic about the long-term outlook for the global fertilizer industry. North American farm economics have improved over the last year, industry fundamentals remain solid, and we believe that phosphates shipments will rebound, especially for the North American spring fertilizer season. Momentum in the potash market remains strong and our fiscal 2007 Potash sales volume guidance remains unchanged at 7.7 to 8.1 million tonnes."

The Mosaic Company is one of the world's leading producers and marketers of concentrated phosphate and potash crop nutrients. For the global agriculture industry, Mosaic is a single source of phosphates, potash, nitrogen fertilizers and feed ingredients.

SOURCE: The Mosaic Company via PR Newswire.