Mosaic Co. will set aside $630 million to maintain towering piles of phosphogypsum, a waste material left after phosphate mining, in Florida and Louisiana.
Mosaic, feds settle hazardous-waste case with fund expected to pay $1.8B in costs
The agreement is expected to pay for $1.8 billion in cleanup charges in Florida, Louisiana.
The company and government authorities announced the agreement on Thursday.
The phosphogypsum piles, sometimes as high as a small skyscraper and covering the area of a college campus, are one of the most visible byproducts of fertilizer production. A few dozen loom over the coastal plains of the southern U.S. that are home to large phosphate deposits.
Though not considered dangerous to humans, phosphogypsum is slightly radioactive and can't be used in building products as regular gypsum can. As well, water that collects on and in such piles turns acidic, leading efforts of regulators and producers to control it.
In the early 1950s, the forerunner to Mosaic, the then-fertilizer subsidiary of Cargill Inc., began one of the first such giant piles about 7 miles south of downtown Tampa. It eventually sprawled over 340 acres and was about 200 feet high when Cargill closed and sealed it in 1991.
In 2005, the Environmental Protection Agency filed a formal complaint against Mosaic, saying it wasn't properly treating and storing the phosphogypsum waste. It also wanted the company to provide financial assurance for handling the piles when it closed mines in the future. In 2001, the bankruptcy and collapse of one phosphate producer left the state of Florida to pay tens of millions of dollars to maintain a phosphogypsum stack near Tampa Bay.
Under the arrangement announced Thursday, a trust fund will be started with the $630 million from Mosaic. When it has grown to about $1.8 billion in size, the fund will be used to cover the expected future closure and treatment of stacks and wastewater at four Mosaic facilities — the Bartow, New Wales and Riverview plants in Florida and the Uncle Sam plant in Louisiana.
Mosaic also will spend $170 million on new procedures at its phosphogypsum piles and pay about $10 million in penalties.
"This settlement represents our most significant enforcement action in the mining and mineral processing arena, and will have a significant impact on bringing all Mosaic facilities into compliance with the law," John C. Cruden, assistant attorney general in the Justice Department's environment and natural resources unit, said in a statement.
The settlement must be approved by a federal court.
Mosaic's new chief executive, Joc O'Rourke, said the company is "pleased to be bringing this matter to a close."
The EPA said the amount of waste involved in the case — 60 billion pounds — is the most ever covered by the federal law that guides the handling and disposal of hazardous materials, called the Resource Conservation and Recovery Act, or RCRA.
Mosaic, which is based in Plymouth, said it doesn't expect that its production and operations will be affected by the settlement. It had previously alerted investors that it was likely to pay a sizable amount to reach an agreement with regulators on the cleanup of the sites in Florida and Louisiana.
"In the years since EPA began this enforcement initiative, Mosaic has voluntarily made a number of major improvements to and significant capital investments in our facilities to enhance environmental performance, and the settlements will build upon that good work," O'Rourke said in a statement.
Shares in Mosaic fell about 3 percent Thursday amid flat trading on the broader market.
Evan Ramstad • 612-673-4241
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