Mosaic Co. said Monday that it will be forced to close a phosphate mine and lay off its 221 workers if a federal judge sides with environmental groups who have sued to block an expansion of the Plymouth-based fertilizer giant's Florida operations.

The Sierra Club and two other groups last month sued the U.S. Army Corps of Engineers, contesting its issuance of a wetlands permit for the extension of Mosaic's phosphate mine in Fort Meade, Fla. The environmental groups have asked a federal judge in Florida to halt production at the mine extension.

On July 1, U.S. District Judge Henry Lee Adams Jr. issued a restraining order that temporarily does just that. "Plaintiffs have demonstrated a substantial likelihood of success on the merits of their claims that the Corps issued the permit in violation of the Clean Water Act and National Environmental Policy Act," Adams wrote.

The temporary restraining order is in effect until July 28, unless modified by the court. But on July 22 Adams is slated to hear the environmental groups' plea for a preliminary injunction. If granted, the injunction would likely shut down production at the South Fort Meade mine extension until a trial is held, a process that could take months.

Mosaic, which is 64 percent owned by Cargill Inc., said in a statement that without the Army Corps permit for an extension, "mining at South Fort Meade is not economically viable." Three of the mine's four drag lines, which strip away topsoil to extract ore, are idled and waiting to get at phosphate reserves in the extension, Mosaic said in a securities filing.

Mosaic made the filing in conjunction with a conditional "WARN" (Worker Adjustment and Retraining Notification) notice to the South Fort Meade mine's 221 employees. Federal law requires companies to give workers a 60-day WARN notice of a mass layoff. The notice will be allowed to expire without any layoffs if the court rules against the preliminary injunction, Mosaic said in a securities filing.

In their suit, the environmental groups said the Army Corps' permit authorized the destruction of 534 acres of wetlands. In the face of "enormous environmental degradation" and despite concerns from federal environmental regulators, the Corps determined that an environmental impact statement wasn't necessary for the project, the groups claim.

Mosaic, in a statement, said the South Fort Meade project has "arguably faced a higher level of scrutiny and contains more environmental protections than any prior Florida phosphate mining permit. ... The plaintiffs' claims are without merit, and we intend to vigorously support the Corps' defense of its permit."

In its annual report to securities regulators, Mosaic bills itself as the world's largest producer of concentrated phosphate fertilizer and animal feed ingredients. The company operates five phosphate mines in central Florida.

South Fort Meade is its second-biggest and accounted for 39 percent of Mosaic's phosphate production in its 2009 fiscal year. Investors seemed worried about the loss of output: Mosaic's stock closed at $42.48, down $3.65, or 7.9 percent.

Still, Mosaic recently beefed up its phosphate capacity with a joint venture -- finalized last week -- with two companies that own a Peruvian phosphate mine. Mosaic can take up to 35 percent of that mine's annual production.

Mike Hughlett • 612-673-7003