By Ernest Scheyder
NEW YORK (Reuters) - A federal judge has extended an order keeping Mosaic Co
The company vowed to fight the ruling and a related lawsuit filed by the Sierra Club, an environmental group that claims Mosaic's mine operations in South Fort Meade, Florida, damage two watersheds.
The mine, which has about 15 years of phosphate reserves and produces 6.5 million tons of the fertilizer annually, representing a third of Mosaic's yearly phosphate capacity and 4 percent of the world's.
At issue is a permit from the U.S. Army Corps of Engineers that will effectively let Mosaic expand the mine.
That permit was put on hold by the U.S. District Court for the Middle District of Florida during a trial. But in April Mosaic said it would expand phosphate mining at South Fort Meade anyway, but not in wetland areas.
That move appeared to irk Judge Henry Lee Adams Jr., who said in a ruling late Friday that the mining expansion "alters the course of this very complicated case."
"Any harm to Mosaic is largely self-inflicted," Adams said in his ruling. "Mosaic has had ample time since the beginning of this lawsuit" to reapply for necessary permits.
Plymouth, Minnesota-based Mosaic said its pretax costs will likely jump by $200 million in 2012 due to the injunction.
The company, however, said it will be able to support planned finished phosphate fertilizer production levels through 2012, helped by existing phosphate rock inventories, higher output from other mines, and supplemental purchases of phosphate rock from third parties.
Mosaic processes mined phosphate rock into pebble and fine phosphate, which are then turned into diammonium phosphate, or DAP, and applied by farmers to fields.
If the Florida mine is eventually closed -- a step that is improbable but not impossible -- phosphate supply around the globe would tighten, which could boost prices for crops.
"The court's ruling is inconsistent with the overall regulatory environment in Florida and may bring significant hardship to our employees and local communities," Richard Mack, Mosaic's general counsel, said in a statement. "Mosaic continues to stand by the validity of the Army Corps' permit."
Mosaic's shares were down 3.5 percent to $68.13 in morning trading.
Mosaic is set to report its quarterly results on July 18.
(Reporting by Ernest Scheyder in New York; additional reporting by Thyagaraju Adinarayan in Bangalore; editing by John Wallace)