EDGAR 10-K Filing

Company CIK: 1285785
Filing Year: 2023
Filename: 1285785_10-K_2023_0001618034-23-000003.json

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ITEM 1. BUSINESS
Item 1. Business.
OVERVIEW
The Mosaic Company is the world’s leading producer and marketer of concentrated phosphate and potash crop nutrients. Through our broad product offering, we are a single source supplier of phosphate- and potash-based crop nutrients and animal feed ingredients. We serve customers in approximately 40 countries. We are the second largest integrated phosphate producer in the world and one of the largest producers and marketers of phosphate-based animal feed ingredients in North America and Brazil. We are the leading fertilizer production and distribution company in Brazil. We mine phosphate rock in Florida, Brazil and Peru. We process rock into finished phosphate products at facilities in Florida, Louisiana and Brazil. We are typically one of the top four global potash producers in the world. In 2022, we were the second-largest producer, with our position lifted by reduced production in Belarus and Russia. We mine potash in Saskatchewan, New Mexico and Brazil. We have other production, blending or distribution operations in Brazil, China, India and Paraguay, as well as a strategic equity investment in a joint venture that operates a phosphate rock mine and chemical complexes in the Kingdom of Saudi Arabia. Our operations serve the top four nutrient-consuming countries in the world: China, India, U.S. and Brazil.
The Mosaic Company is a Delaware corporation that was incorporated in March 2004 and serves as the parent company of the business that was formed through the October 2004 combination of IMC Global Inc. (“IMC”) and the fertilizer businesses of Cargill, Incorporated. We are publicly traded on the New York Stock Exchange under the ticker symbol “MOS” and are headquartered in Tampa, Florida.
We conduct our business through wholly- and majority-owned subsidiaries as well as businesses in which we own less than a majority or a non-controlling interest. We are organized into three reportable business segments: Phosphates, Potash and Mosaic Fertilizantes. Intersegment eliminations, unrealized mark-to-market gains/losses on derivatives, debt expenses, Streamsong Resort® results of operations, and the results of the China and India distribution businesses are included within Corporate, Eliminations and Other.
The following charts show the respective contributions to 2022 sales volumes, net sales and gross margin for each of our business segments in effect at December 31, 2022:
We account for approximately 12% of estimated global annual phosphate production. We also account for approximately 14% of estimated global annual potash production.
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Phosphates Segment-We sell phosphate-based crop nutrients and animal feed ingredients throughout North America and internationally. We account for approximately 69% of estimated North American annual production of concentrated phosphate crop nutrients.
Potash Segment-We sell potash throughout North America and internationally, principally as fertilizer, but also for use in industrial applications and, to a lesser degree, as animal feed ingredients. We account for approximately 35% of estimated North American annual potash production.
Mosaic Fertilizantes Segment-We produce and sell phosphate- and potash-based crop nutrients, and animal feed ingredients, in Brazil. In addition to five phosphate rock mines, four chemical plants and a potash mine in Brazil, this segment consists of sales offices, crop nutrient blending and bagging facilities, port terminals and warehouses in Brazil and Paraguay. The Mosaic Fertilizantes segment also serves as a distribution outlet for our Phosphates and Potash segments. We account for approximately 72% of estimated annual production of concentrated phosphate crop nutrients in Brazil and 93% of estimated annual potash production in Brazil.
As used in this report:
•“Mosaic” or “Company” means The Mosaic Company;
•“we,” “us,” and “our” refer to Mosaic and its direct and indirect subsidiaries, individually or in any combination;
•“Cargill” means Cargill, Incorporated and its direct and indirect subsidiaries, individually or in any combination;
•“Cargill Crop Nutrition” means the crop nutrient business we acquired from Cargill in the Combination;
•“Combination” means the October 22, 2004 combination of IMC and Cargill Crop Nutrition; and
statements as to our industry position reflect information from the most recent period available.
Business Developments during 2022
•In the first quarter of 2022, our Board of Directors approved the establishment of a new $1.0 billion share repurchase authorization, which was completed in the second quarter of 2022. Our Board of Directors authorized an additional $2.0 billion share repurchase program in the third quarter of 2022.
•During 2022, we repurchased 30,810,173 shares of Common Stock in the open market for approximately $1.7 billion. This includes 7,056,229 shares we purchased under an accelerated share repurchase agreement in 2022.
•In the first quarter of 2022, our Board of Directors approved a regular dividend increase to $0.60 per share annually from $0.45, beginning with the second quarter of 2022. In the fourth quarter of 2022, our Board of Directors increased the dividend to $0.80 per share annually, beginning with the dividend declared on December 16, 2022.
•In November 2022, we paid the outstanding balance of $550 million on our 3.25% senior notes, due November 15, 2022, without premium or penalty.
On January 12, 2023, we completed the sale of the Streamsong Resort® (the “Resort”) and approximately 7,000 acres of land on which it sits for a purchase price of $160 million. The Resort is a destination resort and conference center, which we developed in an area of previously mined land as part of our long-term business strategy to maximize the value and utility of our extensive land holdings in Florida. In addition to a hotel and conference center, the Resort includes multiple golf courses, a clubhouse and ancillary facilities.
Subsequent to year end, our Board of Directors approved an accelerated share repurchase (“ASR”) of $300 million which is expected to be initiated in the first quarter of 2023. Also, in February 2023, the Board of Directors approved a special dividend of $0.25 per share to be distributed in March, 2023 to our stockholders of record as of March 15, 2023.
We have included additional information about these and other developments in our business during 2022 in our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“Management’s Analysis”) and in the Notes to Consolidated Financial Statements.
Throughout the discussion below, we measure units of production, sales and raw materials in metric tonnes, which are the equivalent of 2,205 pounds, or 1.102 tons (U.S. standard), unless we specifically state that we mean short or long ton(s), which are the equivalent of 2,000 pounds and 2,240 pounds, respectively. In addition, we measure natural gas, a raw material
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used in the production of our products, in MM BTU, which stands for one million British Thermal Units (“BTU”). One BTU is equivalent to 1.06 Joules.
Information concerning our mining properties in this Annual Report on Form 10-K has been prepared in accordance with Subpart 1300 of Regulation S-K (“S-K 1300”). S-K 1300 requires us to disclose our mineral resources, in addition to our mineral reserves, as of the end of our most recently completed fiscal year, both in the aggregate and for each of our individually material mining properties. We have four material properties: Belle Plaine, Esterhazy, Florida and Tapira. See Item 2. “Properties,” for further information regarding mineral reserves and resource and discussion of our material mining properties.
This report includes market share and industry data and forecasts that we obtained from publicly available information and industry publications, surveys, market research, internal company surveys and consultant surveys. We believe these sources to be reliable, but there can be no assurance as to the accuracy and completeness of such information. We have not independently verified the data from third-party sources, nor have we ascertained the underlying economic assumptions relied upon therein. Similarly, internal company surveys, industry forecasts and market research, which we believe to be reliable based upon management’s knowledge of the industry, have not been verified by any independent sources.
BUSINESS SEGMENT INFORMATION
The discussion below of our business segment operations should be read in conjunction with the following information that we have included in this report:
•The risk factors discussed in this report in Part I, Item 1A, “Risk Factors”.
•Our Management’s Analysis.
•The financial statements and supplementary financial information in our Consolidated Financial Statements (“Consolidated Financial Statements”).
This information is incorporated by reference into this section from Part II, Item 8, “Financial Statements and Supplementary Data”.
Phosphates Segment
Our Phosphates business segment owns and operates mines and production facilities in Florida which produce concentrated phosphate crop nutrients and phosphate-based animal feed ingredients, and processing plants in Louisiana which produce concentrated phosphate crop nutrients. We have a 75% economic interest in the Miski Mayo Phosphate Mine in Peru (“Miski Mayo Mine”), which is included in the results of our Phosphates segment.
The following map shows the locations of each of our phosphate concentrates plants in the U.S. and each of our active, temporarily idled, and planned phosphate mine locations, including beneficiation plants, in Florida. The reserves associated with our Ona, Florida location have been allocated to other active mines based on our future mining plans:
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U.S. Phosphate Crop Nutrients and Animal Feed Ingredients
Our U.S. Phosphate operations have capacity to produce approximately 4.5 million tonnes of phosphoric acid (“P2O5”) per year, or about 7% of world annual capacity and about 60% of North American annual capacity. P2O5 is produced by reacting finely ground phosphate rock with sulfuric acid. P2O5 is the key building block for the production of high analysis or concentrated phosphate crop nutrients and animal feed products and is the most comprehensive measure of phosphate capacity and production and a commonly used benchmark in our industry. Our U.S. P2O5 production totaled approximately 3.0 million tonnes during 2022. Our U.S. operations account for approximately 7% of estimated global annual production and 50% of estimated North American annual output.
Our phosphate crop nutrient products are marketed worldwide to crop nutrient manufacturers, distributors, retailers and farmers. Our principal phosphate crop nutrient products are:
•Diammonium Phosphate (18-46-0): Diammonium Phosphate (“DAP”) is the most widely used high-analysis phosphate crop nutrient worldwide. DAP is produced by first combining phosphoric acid with anhydrous ammonia in a reaction vessel. This initial reaction creates a slurry that is then pumped into a granulation plant where it is reacted with additional ammonia to produce DAP. DAP is a solid granular product that is applied directly or blended with other solid plant nutrient products, such as urea and potash.
•Monoammonium Phosphate (11-52-0): Monoammonium Phosphate (“MAP”) is the second most widely used high-analysis phosphate crop nutrient and the fastest growing phosphate product worldwide. MAP is also produced by first combining phosphoric acid with anhydrous ammonia in a reaction vessel. The resulting slurry is then pumped into the granulation plant where it is reacted with additional P2O5 to produce MAP. MAP is a solid granular product that is applied directly or blended with other solid plant nutrient products.
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•MicroEssentials® is a value-added ammoniated phosphate product that is enhanced through a patented process that creates very thin platelets of sulfur and other micronutrients, such as zinc, on the granulated product. The patented process incorporates both the sulfate and elemental forms of sulfur, providing season-long availability to crops.
Production of our animal feed ingredients products is located at our New Wales, Florida facility. We market our feed phosphate primarily under the leading brand names of Biofos® and Nexfos®.
Annual capacity by plant as of December 31, 2022 and production volumes by plant for 2022 are listed below:
(tonnes in millions) Phosphoric Acid Processed Phosphate(a)/DAP/MAP/ MicroEssentials®/Feed Phosphate
Operational Capacity(b)
Operational Capacity(b)
Facility Production(c)
Production(c)
Florida:
Bartow 1.1 0.8 2.5 1.8
New Wales 1.7 1.1 4.0 2.5
Riverview 0.9 0.6 1.8 1.3
3.7 2.5 8.3 5.6
Louisiana:
Faustina - - 1.6 1.1
Uncle Sam 0.8 0.5 - -
0.8 0.5 1.6 1.1
Total 4.5 3.0 9.9 6.7
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(a)Our ability to produce processed phosphates has been less than our annual operational capacity stated in the table above, except to the extent we purchase P2O5. Factors affecting actual production are described in note (c) below.
(b)Operational capacity is our estimated long-term capacity based on an average amount of scheduled down time, including maintenance and scheduled turnaround time, and product mix, and no significant modifications to operating conditions, equipment or facilities.
(c)Actual production varies from annual operational capacity shown in the above table due to factors that include, among others, the level of demand for our products, maintenance and turnaround time, accidents, mechanical failure, product mix, and other operating conditions.
The P2O5 produced at Uncle Sam is shipped to Faustina, where it is used to produce DAP, MAP and MicroEssentials®. Our Faustina plant also manufactures ammonia that is mostly consumed in our concentrate plants.
We produced approximately 6.3 million tonnes of concentrated phosphate crop nutrients during 2022 and accounted for approximately 69% of estimated North American annual production.
Phosphate Rock
Phosphate rock is the key mineral used to produce phosphate crop nutrients and feed phosphate. Our Florida phosphate rock mines produced approximately 10.5 million tonnes in 2022 and accounted for approximately 47% of estimated North American annual production. We are the world’s second largest miner of phosphate rock (excluding China) and currently operate four mines in North America with a combined annual capacity of approximately 18.0 million tonnes. Additionally, we own 75% of the Miski Mayo Mine, which has an annual capacity of 4.0 million tonnes. Production of one tonne of DAP requires between 1.6 and 1.7 tonnes of phosphate rock.
All of our wholly-owned phosphate mines and related mining operations in North America are located in central Florida. During 2022, we operated three active mines in Florida: Four Corners, South Fort Meade and Wingate. We plan to explore and develop the DeSoto property and the South Pasture property, which was previously idled, to offset future depletion at our Florida properties. We have a 75% economic interest in the Miski Mayo Mine, which allows us to supplement our other produced rock to meet our overall fertilizer production needs and is the primary source of rock for our Louisiana operations. We have the right to use or sell to third parties 75% of the Miski Mayo Mine’s annual production.
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See Item 2. “Properties” for a discussion of our phosphate mining properties, including processing methods, facilities, production and summaries of our mineral resources and reserves, both in the aggregate and for our individual material phosphate mining properties.
Investment in Ma’aden Wa’ad Al Shamal Phosphate Company (“MWSPC”)
We own a 25% interest in MWSPC and, in connection with our equity share, we are entitled to market approximately 25% of MWSPC’s production. MWSPC consists of a mine and two chemical complexes (the “Project”) that produce phosphate fertilizers and other downstream phosphates products in the Kingdom of Saudi Arabia. The greenfield project was built in the northern region of Saudi Arabia at Wa’ad Al Shamal Minerals Industrial City and included further expansion of processing plants in Ras Al Khair Minerals Industrial City, which is located on the east coast of Saudi Arabia. Ammonia operations commenced in late 2016 and on December 1, 2018, MWSPC commenced commercial operations of the phosphate plant, thereby bringing the entire project to the commercial production phase. Phosphate production will ramp-up until it reaches an expected 3.0 million tonnes in annual production capacity. Actual phosphate production was 2.6 million tonnes in 2022. The Project benefits from the availability of key raw nutrients from sources within Saudi Arabia.
Sulfur
We use molten sulfur at our phosphates concentrates plants to produce sulfuric acid, primarily for use in our production of P2O5. We purchased approximately 3.4 million long tons of sulfur during 2022. We purchase the majority of this sulfur from North American oil and natural gas refiners who are required to remove or recover sulfur during the refining process. Production of one tonne of DAP requires approximately 0.40 long tons of sulfur. We procure our sulfur from multiple sources and receive it by truck, rail, barge and vessel, either directly at our phosphate plants or have it sent for gathering to terminals that are located on the U.S. gulf coast. In addition, we use formed sulfur received through Tampa, Florida ports, which are delivered by truck to our New Wales facility and melted through our sulfur melter.
We own and operate a sulfur terminal in Riverview, Florida. We also lease terminal space in Tampa, Florida and Galveston and Beaumont, Texas. We have long-term time charters on two ocean-going tugs/barges and one ocean-going vessel that transports molten sulfur from the Texas terminals to Tampa. We then further transport by truck to our Florida phosphate plants. In addition, we own Gulf Sulphur Services Ltd., LLLP (“Gulf Sulphur Services”), which operates a sulfur transportation and terminaling business in the Gulf of Mexico, and handles these functions for a substantial portion of our Florida sulfur volume. Our sulfur logistic assets also include a large fleet of leased railcars that supplement our marine sulfur logistic system. Our Louisiana operations are served by truck from nearby refineries.
Although sulfur is readily available from many different suppliers and can be transported to our phosphate facilities by a variety of means, sulfur is an important raw material used in our business that has in the past been, and may in the future, be the subject of volatile pricing and availability. Alternative transportation and terminaling facilities might not have sufficient capacity to fully serve all of our facilities in the event of a disruption to current transportation or terminaling facilities. Changes in the price of sulfur or disruptions to sulfur transportation or terminaling facilities could have a material impact on our business. We have included a discussion of sulfur prices in our Management’s Analysis.
Ammonia
We use ammonia together with P2O5 to produce DAP, MAP and MicroEssentials®. We consumed approximately 1.0 million tonnes of ammonia during 2022. Production of one tonne of DAP requires approximately 0.23 tonnes of ammonia. We purchase approximately one-third of our ammonia from various suppliers in the spot market with the remaining two-thirds either purchased through our ammonia supply agreement (the “CF Ammonia Supply Agreement”) with an affiliate of CF Industries Inc. (“CF”) or produced internally at our Faustina, Louisiana location.
Our Florida ammonia needs are currently supplied under multi-year contracts with both domestic and offshore producers. Ammonia for our Bartow and Riverview plants is terminaled through owned ammonia facilities at the Port of Tampa and Port Sutton, Florida. Ammonia for our New Wales plant is terminaled through another ammonia facility owned and operated by a third party at Port Sutton, Florida pursuant to an agreement that provides for service through 2022, with automatic renewal for an additional two-year period unless either party terminates, as provided in the agreement. Ammonia is transported by pipeline from the terminals to our production facilities. We have service agreements with the operators of the pipelines for Bartow, New Wales and Riverview, which provide service through June 30, 2023 with annual auto-renewal provisions unless either party objects.
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Under the CF Ammonia Supply Agreement, we purchased 580,000 metric tonnes in 2022. On October 14, 2022, we received notice from CF to exercise the bilateral, contractual right to end the ammonia supply agreement in its current form, effective January 1, 2025. We are confident that we will continue to have adequate sources of supply for ammonia at competitive pricing, including from CF. We expect a majority of the ammonia purchased under the CF Ammonia Supply Agreement to be received by barge at the Port of Tampa and delivered to our Florida facilities as described in the preceding paragraph.
We produce ammonia at Faustina, Louisiana primarily for our own consumption. Our annual capacity is approximately 530,000 tonnes. From time to time, we sell surplus ammonia to unrelated parties and/or may transport surplus ammonia to the Port of Tampa. In addition, under certain circumstances we are permitted to receive ammonia at Faustina under the CF Ammonia Supply Agreement.
Although ammonia is readily available from many different suppliers and can be transported to our Phosphate facilities by a variety of means, ammonia is an important raw material used in our business that has in the past been, and may in the future be, the subject of volatile pricing. In addition, alternative transportation and terminaling facilities might not have sufficient capacity to fully serve all of our facilities in the event of a disruption to existing transportation or terminaling facilities. Changes in the price of ammonia or disruptions to ammonia transportation or terminaling could have a material impact on our business. We have included a discussion of ammonia prices in our Management’s Analysis.
Natural Gas for Phosphates
Natural gas is the primary raw material used to manufacture ammonia. At our Faustina facility, ammonia is manufactured on site. The majority of natural gas is purchased through firm delivery contracts based on published index-based prices and is sourced from Texas and Louisiana via pipelines interconnected to the Henry Hub. We use over-the-counter swap and/or option contracts to forward price portions of future natural gas purchases. We typically purchase approximately 11.4 million MM BTU of natural gas per year for use in ammonia production at Faustina.
Our ammonia requirements for our Florida operations are purchased rather than manufactured on site. Therefore, while we typically purchase approximately 2.7 million MM BTU of natural gas per year in Florida, it is only used as a thermal fuel for various phosphate production processes.
Florida Land Holdings
We are a significant landowner in the State of Florida, which has in the past been considered one of the fastest areas of population growth in the U.S. We own land comprising over 351,000 acres held in fee simple title in central Florida and have the right to mine additional properties which contain phosphate rock reserves. Some of our land holdings are needed to operate our Phosphates business, while a portion of our land assets, such as certain reclaimed properties, are no longer required for our ongoing operations. As a general matter, more of our reclaimed property becomes available for uses other than for phosphate operations each year. Our real property assets are generally comprised of concentrates plants, port facilities, phosphate mines and other property which we have acquired through our presence in Florida. Our long-term future land use strategy is to optimize the value of our land assets. For example, we developed Streamsong Resort® (the “Resort”), a destination resort and conference center, in an area of previously mined land as part of our long-term business strategy to maximize the value and utility of our extensive land holdings in Florida. In addition to a hotel and conference center, the Resort includes multiple golf courses, a clubhouse and ancillary facilities. On January 12, 2023, we completed the sale of the Resort and approximately 7,000 acres of land on which it sits to Lone Windmill LLC, a subsidiary of Kemper Sports Management LLC, for a purchase price of $160 million. See Note 27, Subsequent Events, in the accompanying consolidated financial statements for further information.
Potash Segment
We are one of the leading potash producers in the world. We mine and process potash in Canada and the U.S. and sell potash in North America and internationally. The term “potash” applies generally to the common salts of potassium. Muriate of potash (“MOP”) is the primary source of potassium for the crop nutrient industry. Red MOP has traces of iron oxide. The granular and standard grade red MOP products are well suited for direct fertilizer application and bulk blending. White MOP has a higher percent potassium oxide (“K2O”). White MOP, besides being well suited for the agricultural market, is used in many industrial applications. We also produce a double sulfate of potash magnesia product, which we market under our brand name K-Mag®, at our Carlsbad, New Mexico facility.
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Our potash products are marketed worldwide to crop nutrient manufacturers, distributors and retailers and are also used in the manufacturing of mixed crop nutrients and, to a lesser extent, in animal feed ingredients. We also sell potash to customers for industrial use. In addition, our potash products are used for de-icing and as a water softener regenerant.
In 2022, we operated three potash mines in Canada, including two shaft mines and one solution mine, as well as one potash shaft mine in the U.S.. In 2022, the decommissioning of the K1 and K2 shafts at our Esterhazy, Saskatchewan mine was completed after their shutdown in the second quarter of 2021. Capacity and production from these shafts was replaced by the K3 expansion. In the third quarter of 2021, we restarted the Colonsay, Saskatchewan mine to meet market demand for potash.
Mosaic leases approximately 291,500 acres of mineral rights from the government of Saskatchewan, and approximately 99,700 acres of freehold mineral rights in the Kronau/Regina area, which have not been developed.
We pay Canadian resource taxes consisting of the Potash Production Tax and resource surcharge. The Potash Production Tax is a Saskatchewan provincial tax on potash production and consists of a base payment and a profits tax. We also pay a percentage of the value of resource sales from our Saskatchewan mines. In addition to the Canadian resource taxes, royalties are payable to the mineral owners in respect of potash reserves or production of potash. We have included a further discussion of the Canadian resource taxes and royalties in our Management’s Analysis.
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The map below shows the location of each of our potash properties:
Our North American potash annualized operational capacity totals 11.2 million tonnes of product per year and accounts for approximately 14% of world annual capacity and 34% of North American annual capacity. Production during 2022 totaled 9.0 million tonnes. We account for approximately 14% of estimated world annual production and 35% of estimated North American annual production.
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The following table shows, for each of our potash mines, annual capacity as of December 31, 2022 and finished product output for 2022:
(tonnes in millions)
Facility Annualized
Proven
Peaking
Capacity
(a)(c)(d)
Annual
Operational
Capacity
(a)(b)(d)(e)
Finished
Product(b)
Canada
Belle Plaine-MOP 3.9 3.0 2.8
Colonsay-MOP (f)
2.6 1.5 0.9
Esterhazy-MOP(g)
6.3 6.0 4.7
Canadian Total 12.8 10.5 8.4
United States
Carlsbad-K-Mag®(h)
0.9 0.7 0.6
United States Total 0.9 0.7 0.6
Totals 13.7 11.2 9.0
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(a)Finished product.
(b)Actual production varies from annual operational capacity shown in the above table due to factors that include, among others, the level of demand for our products, maintenance and turnaround time, the quality of the reserves and the nature of the geologic formations we are mining at any particular time, accidents, mechanical failure, product mix, and other operating conditions.
(c)Represents full capacity assuming no turnaround or maintenance time.
(d)The annualized proven peaking capacity shown above is the capacity currently used to determine our share of Canpotex, Limited (“Canpotex”) sales. Canpotex members’ respective shares of Canpotex sales are based upon the members’ respective proven peaking capacities for producing potash. When a Canpotex member expands its production capacity, the new capacity is added to that member’s proven peaking capacity based on a proving run at the maximum production level. Alternatively, Canpotex members may elect to rely on an independent engineering firm and approved protocols to calculate their proven peaking capacity. The annual operational capacity reported in the table above can exceed the annualized proven peaking capacity until the proving run has been completed. Our entitlement percentage of Canpotex is 36.2%.
(e)Annual operational capacity is our estimated long-term potash capacity based on the quality of reserves and the nature of the geologic formations expected to be mined, milled and/or processed over the long term, average amount of scheduled down time, including maintenance and scheduled turnaround time, and product mix, and no significant modifications to operating conditions, equipment or facilities. Operational capacities will continue to be updated to the extent new production results impact ore grades assumptions.
(f)We have the ability to reach an annual operating capacity of 2.1 million tonnes over time by increasing our staffing levels and investment in mine development activities. Our Colonsay mine operates as a swing mine to meet market demands.
(g)In June, 2021, we permanently ceased operations at the K1 and K2 mine shafts. The annual operational capacity of Esterhazy has remained consistent following the K1 and K2 closures as capacity from the K3 mine shafts has replaced K1 and K2.
(h)K-Mag® is a specialty product that we produce at our Carlsbad facility.
See Item 2, “Properties” for a discussion of our potash mining properties, including processing methods, facilities, production and summaries of our mineral resources and reserves, both in the aggregate and for our individual material potash mining properties.
Natural Gas
Natural gas is used at our Belle Plaine solution mine as a fuel to produce steam and to dry potash products. The steam is used to generate electricity and provide thermal energy to the evaporation, crystallization and solution mining processes. The Belle Plaine solution mine typically accounts for approximately 80% of our Potash segment’s total natural gas requirements for potash production. At our shaft mines, natural gas is used as a fuel to heat fresh air supplied to the shaft mines and for drying potash products. Combined natural gas usage for both the solution and shaft mines totaled 17.7 million MM BTU during 2022. We purchase our natural gas requirements on firm delivery index price-based physical contracts and on short-term spot-priced physical contracts. Our Canadian operations purchase physical natural gas from companies in Alberta and Saskatchewan using AECO price indices references and transport the gas to our plants via the TransGas pipeline system. The U.S. potash operation in New Mexico purchases physical gas in the southwest respective regional market using the El Paso
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San Juan Basin market pricing reference. We use financial derivative contracts to manage the pricing on portions of our natural gas requirements.
Mosaic Fertilizantes Segment
Our Mosaic Fertilizantes segment owns and operates mines, chemical plants, crop nutrient blending and bagging facilities, port terminals and warehouses in Brazil and Paraguay, which produce and sell concentrated phosphates crop nutrients, phosphate-based animal feed ingredients and potash fertilizer. The following map shows the locations of our operations in Brazil and Paraguay:
We are the largest producer and one of the largest distributors of blended crop nutrients for agricultural use in Brazil. We produce and sell phosphate- and potash-based crop nutrients, and animal feed ingredients through our operations. Our operations in Brazil include five phosphate mines, four chemical plants and a potash mine. We own and operate ten blending plants in Brazil and one blending plant and port in Paraguay. In addition, we lease several other warehouses and blending units depending on sales and production levels. We also have a 62% ownership interest in Fospar, S.A. (“Fospar”). Fospar owns and operates an SSP (defined below) granulation plant, which produces approximately 0.5 million tonnes of SSP per year, and a deep-water port and throughput warehouse terminal facility in Paranagua, Brazil. The port facility at Paranagua handles approximately 3.6 million tonnes of imported crop nutrients. In 2022, Mosaic Fertilizantes sold approximately 9.4 million tonnes of crop nutrient products and accounted for approximately 22% of fertilizer shipments in Brazil.
We have the capability to annually produce approximately 4.5 million tonnes of phosphate- and potash-based crop nutrients and animal feed ingredients. Crop nutrient products produced are marketed to crop nutrient manufacturers, distributors, retailers and farmers.
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In addition to producing crop nutrients, Mosaic Fertilizantes purchases phosphates, potash and nitrogen products which are either used to produce blended crop nutrients (“Blends”) or for resale. In 2022, Mosaic Fertilizantes purchased 1.5 million tonnes of phosphate-based products, primarily MicroEssentials®, from our Phosphates segment, and 2.3 million tonnes of potash products from our Potash segment and Canpotex.
Phosphate Crop Nutrients and Animal Feed Ingredients
Our Brazilian phosphates operations have capacity to produce approximately 1.1 million tonnes of P2O5 per year, or about 70% of Brazilian annual capacity. Phosphoric acid is produced by reacting ground phosphate rock with sulfuric acid. P2O5 is the key building block for the production of high analysis or concentrated phosphate crop nutrients and animal feed products and is the most comprehensive measure of phosphate capacity and production and a commonly used benchmark in our industry. Our Brazilian P2O5 production totaled approximately 1.0 million tonnes in 2022 and accounted for approximately 99% of Brazilian annual output.
Our principal phosphate crop nutrient products are:
•Monoammonium Phosphate (11-52-0) (“MAP”): MAP is a crop nutrient composed of two macronutrients, nitrogen and phosphoric acid. This slurry is added inside a rotary drum type granulator with ammonia to complete the neutralization reaction and produce MAP.
•Triple superphosphate (“TSP”): TSP is a highly concentrated phosphate crop nutrient. TSP is produced from the phosphate rock reaction with phosphoric acid in a kuhlmann type reactor. The process for the production of TSP in Brazil is run of pile where the product undergoes a curing process of approximately seven days for later granulation.
•Single superphosphate (“SSP”): SSP is a crop nutrient with a low concentration of phosphorus that is used in agriculture because of the sulfur content in its formulation. SSP is produced from mixing phosphate rock with sulfuric acid in a kuhlmann or malaxador type reactor. After the reaction, the product goes to the curing process and then feeds the granulation units.
•Dicalcium phosphate (“DCP”): Dicalcium phosphate is produced by the reaction of desulphurized phosphoric acid with limestone. At Uberaba, it is produced from the reaction of concentrated phosphoric acid with limestone slurry. At Cajati the phosphoric acid is diluted with dry limestone. The reaction of the DCP occurs in a kuhlmann or spinden type reactor.
Our primary mines and chemical plants are located in the states of Minas Gerais, São Paulo, and Goias. Production of our animal feed ingredients products is located at our Uberaba, Minas Gerais and Cajati, São Paulo facilities. We market our feed phosphate primarily under the brand name Foscálcio.
Annual capacity and production volume by plant as of December 31, 2022 are listed below:
(tonnes of ore in millions) Phosphoric Acid Processed Phosphate(a) (MAP/TSP/SSP/DCP/Feed)
Facility Capacity(b)
Production(c)
Capacity(b)
Production(c)
Phosphate
Uberaba 0.9 0.9 2.0 1.7
Cajati 0.2 0.1 0.5 0.3
Araxá - - 1.1 0.9
Catalão - - 0.4 0.3
Total 1.1 1.0 4.0 3.2
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(a)Our ability to produce processed phosphates has been less than our annual operational capacity as stated in the table above, except to the extent we purchase phosphoric acid. Factors affecting actual production are described in note (c) below.
(b)The annual production capacity was calculated using the hourly capacity, days stopped for annual maintenance and OEE (historical utilization factor and capacity factor).
(c)Actual production varies from annual operational capacity shown in the table above due to factors that include, among others, the level of demand for our products, maintenance and turnaround time, accidents and mechanical failure.
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The phosphoric acid produced at Cajati is used to produce DCP. The phosphoric acid produced at Uberaba is used to produce MAP, TSP and DCP.
We produced approximately 2.8 million tonnes of concentrated phosphate crop nutrients during 2022 which accounted for approximately 49% of estimated Brazilian annual production.
Phosphate Rock
Phosphate rock is the key mineral used to produce phosphate crop nutrients and animal feed product. Our phosphate rock production in Brazil totaled approximately 4.0 million tonnes in 2022, which accounted for approximately 79% of estimated Brazilian annual production. We are the largest producer of phosphate rock in Brazil and currently operate five properties with a combined annual capacity of approximately 4.6 million tonnes. Production of one tonne of MAP requires 1.6 to 1.7 tonnes of phosphate rock. Production of one tonne of SSP requires between 0.6 to 0.7 tonnes of phosphate rock. Production of one tonne of TSP requires 1.4 tonnes of phosphate rock.
During 2022, we operated five properties; Araxá, Patrocínio and Tapira, in the state of Minas Gerais; Catalão, in the state of Goiás; and Cajati, in the state of São Paulo.
See Item 2, “Properties” for a discussion of our Brazilian mining properties, including processing methods, facilities, production and summaries of our mineral resources and reserves, both in the aggregate and for our individually material Brazilian properties.
We are required to pay royalties to mineral owners and resource taxes to the Brazilian government for phosphate and potash production. The resource taxes, known as Compensação Financeira pela Exploração de Recursos Minerais or CFEM, are regulated by the National Mining Agency. In 2022, we paid royalties and resource taxes of approximately $18.0 million.
Sulfur
We use molten sulfur at our phosphates concentrates plants to produce sulfuric acid, one of the key components used in the production of phosphoric acid. We consumed approximately 1.2 million long tons of sulfur for our own production during 2022. We purchase approximately 13% of the volume under annual supply agreements from oil and natural gas refiners, who are required to remove or recover sulfur during the refining process. The remaining 87% is purchased in the spot market. Sulfur is imported through the Tiplam port and transported by rail to the Uberaba plant and by truck to the Araxá and Cajati locations.
Although sulfur is readily available from many different suppliers and can be transported to our phosphate facilities by a variety of means, sulfur is an important raw material used in our business that has in the past been, and could in the future be, subject to volatile pricing and availability. Alternative transportation and terminaling facilities might not have sufficient capacity to fully serve all of our facilities in the event of a disruption to current transportation or terminaling facilities. Changes in the price of sulfur or disruptions to sulfur transportation or terminaling facilities could have a material impact on our business.
Ammonia
We use ammonia, together with phosphoric acid, to produce MAP, and to a lesser extent for SSP production. We consumed approximately 137,495 tonnes of ammonia during 2022. Production of one tonne of MAP requires approximately 0.137 tonnes of ammonia. We purchase all of our ammonia under a long-term supply agreement with two suppliers. Ammonia is imported through the Tiplam port and transported by truck to Uberaba, Araxá and Catalão.
We own approximately 1% of the Tiplam terminal in Santos, São Paulo. Our ownership percentage, along with a contractual agreement, guarantee us unloading priority for ammonia and also provide us unloading capacity for rock, sulfur and crop nutrients.
Although ammonia is readily available from many different suppliers and can be transported to our phosphates facilities by a variety of means, ammonia is an important raw material used in our business that has in the past been, and in the future could be, subject to volatile pricing. Alternative transportation and terminaling facilities might not have sufficient capacity to fully serve all of our facilities in the event of a disruption to existing transportation or terminaling facilities. Changes in the price of ammonia or disruptions to ammonia transportation or terminaling could have a material impact on our business.
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Brazilian Potash
We conduct potash operations through the leased Taquari-Vassouras shaft mine, which is the only potash mine in Brazil, located in Rosário do Catete in the Brazilian state of Sergipe. We also own a related refinery at the site. We produce and sell potash product domestically. MOP is the primary source of potassium for the crop nutrient industry in Brazil. Red MOP has traces of iron oxide. The granular and standard grade red MOP products are well-suited for direct fertilizer application and bulk blending. Our potash product is marketed in Brazil to crop nutrient manufacturers, distributors and retailers and is also used in the manufacturing of crop nutrients.
In 2022, we paid royalties of approximately $11.4 million related to the leasing of potash assets and mining rights for Taquari.
Land Holdings
Mosaic Fertilizantes owns the surface rights of certain rural lands comprising over 34,000 hectares (84,000 acres) in the States of São Paulo, Minas Gerais, Goiás, Paraná, Mato Grosso, Santa Catarina, Bahia and Sergipe, and has the right to mine additional properties which contain phosphate rock or potash reserves. Most of our land holdings are needed to operate our phosphate and potash production and fertilizer distribution businesses. A portion of our land assets may no longer be required for our current operations and may be leased to third parties, for agricultural or other purposes, or may be set aside for mineral or environmental conservation. Our real property assets are generally comprised of concentrates plants, port facilities and phosphate and potash mines, crop nutrient blending and bagging facilities and other properties which we have acquired through our presence in Brazil.
India and China Distribution Businesses
Our China and India distribution businesses market phosphate-, potash- and nitrogen-based crop nutrients and provide other ancillary services to wholesalers, cooperatives, independent retailers, and farmers in the Asia-Pacific regions. These operations provide our Phosphates and Potash segments access to key markets outside of North and South America and serve as a marketing agent for our Phosphates segment. In 2022, the India and China operations purchased 523,110 tonnes of phosphate-based products from our Phosphates segment and MWSPC, and 1,344,926 tonnes of potash products from our Potash segment and Canpotex. They also purchase phosphates, potash and nitrogen products from unrelated third parties, which we either use to produce blended crop nutrients or for resale.
In China, we own two 300,000-tonne per year capacity blending plants. In 2022, we sold approximately 230,000 tonnes of Blends and distributed another 825,000 tonnes of phosphate and potash crop nutrients in China.
In India, we have distribution facilities to import and sell crop nutrients. In 2022, we distributed approximately 535,000 tonnes of phosphate and potash crop nutrient products in India.
SALES AND DISTRIBUTION ACTIVITIES
United States and Canada
We have a U.S. and Canada sales and marketing team that serves our business segments. We sell to wholesale distributors, retail chains, cooperatives, independent retailers and national accounts.
Customer service and the ability to effectively minimize the overall supply chain costs are key competitive factors in the crop nutrient and animal feed ingredients businesses. In addition to our production facilities, to service the needs of our customers, we own or have contractual throughput or other arrangements at strategically located distribution warehouses along or near the Mississippi and Ohio Rivers, as well as in other key agricultural regions of the U.S. and Canada. From these facilities, we distribute Mosaic-produced phosphate and potash products for customers who in turn resell the product into the distribution channel or directly to farmers in the U.S. and Canada.
We own port facilities in Tampa, Florida which have deep water berth capabilities providing access to the Gulf of Mexico. We also own warehouse distribution facilities in: Rosemount, Minnesota; Pekin, Illinois; and Henderson, Kentucky. In 2022, we sold our warehouse facility in Savage, Minnesota.
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In addition to the facilities that we own, our U.S. distribution operations also include leased distribution space or contractual throughput agreements in other key geographical areas including California, Florida, Illinois, Indiana, Iowa, Kentucky, Louisiana, Minnesota, Missouri, Nebraska, North Dakota, Ohio, Oklahoma, Texas and Wisconsin.
Our Canadian customers include independent dealers and national accounts. We also lease or own warehouse facilities in Saskatchewan, Ontario, Quebec and Manitoba in Canada.
International
Outside of the U.S. and Canada, we market our Phosphates segment’s products through our Mosaic Fertilizantes segment and our China and India distribution businesses, as well as a salesforce focused on geographies outside of North America. The countries that account for the largest amount of our phosphates sales outside the U.S., by volume, are Brazil, Canada, Argentina and Mexico.
Our sales of potash products outside of the U.S. and Canada are made through Canpotex. Canpotex sales are allocated among its members based on peaking capacity. In 2022, our entitlement percentage of Canpotex was 36.2%.
Our potash exports from Carlsbad are sold through our own sales force. We also market our Potash segment’s products through our Mosaic Fertilizantes segment and our China and India distribution businesses, which acquire potash primarily through Canpotex. The countries that account for the largest amount of international potash sales, by volume, are Brazil, China, Indonesia, India and Malaysia.
To service the needs of our customers, our Mosaic Fertilizantes segment includes a network of strategically located sales offices, crop nutrient blending and bagging facilities, port terminals and warehouse distribution facilities that we own and operate. The blending and bagging facilities primarily produce Blends from phosphate, potash and nitrogen. The average product mix in our Blends (by volume) contains approximately 24% nitrogen, 51% phosphate and 25% potash, although this mix differs based on seasonal and other factors. All of our production in Brazil is consumed within the country.
Our India and China distribution businesses also includes a network of strategically located sales offices, crop nutrient blending and bagging facilities, port terminals and warehouse distribution facilities. These businesses serve primarily as a sales outlet for our North American phosphates production, as well as additional phosphate production we market from our MWSPC joint venture, both for resale and as an input for Blends. Our Potash segment also has historically furnished the majority of the raw materials needs for the production of Blends, primarily via Canpotex, and is expected to continue to do so in the future.
Other Products
With a strong brand position in a multi-billion dollar animal feed ingredients global market, our Phosphates segment supplies animal feed ingredients for poultry and livestock to customers in North America, Latin America and Asia. Our potash sales to non-agricultural users are primarily to large industrial accounts and the animal feed industry. Additionally, in North America, we sell potash for de-icing and as a water softener regenerant. In Brazil, we also sell phosphogypsum.
COMPETITION
Because crop nutrients are global commodities available from numerous sources, crop nutrition companies compete primarily on the basis of delivered price. Other competitive factors include product quality, cost and availability of raw materials, customer service, plant efficiency and availability of product. As a result, markets for our products are highly competitive. We compete with a broad range of domestic and international producers, including farmer cooperatives, subsidiaries of larger companies, and independent crop nutrient companies. Foreign competitors may have access to less expensive raw materials, may not have to comply with as stringent regulatory requirements or are owned or subsidized by governments and, as a result, may have cost advantages over North American companies. We believe that our extensive North American and international production and distribution system provides us with a competitive advantage by allowing us to achieve economies of scale, transportation and storage efficiencies, and obtain market intelligence. Also, we believe our performance products, such as MicroEssentials®, provide us a competitive advantage with customers in North and South America.
Unlike many of our competitors, we have our own distribution system to sell phosphate- and potash-based crop nutrients and animal feed ingredients, whether produced by us or by other third parties, around the globe. In North America, we have one of the largest and most strategically located distribution systems for crop nutrients, including warehouse facilities in key
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agricultural regions. We also have an extensive network of distribution facilities internationally, including in the key growth regions of South America and Asia, with port terminals, warehouses, and blending plants in Brazil, Paraguay, China, and India. Our global presence allows us to efficiently serve customers in approximately 40 countries.
Phosphates Segment
Our Phosphates segment operates in a highly competitive global market. Among the competitors in the global phosphate industry are domestic and foreign companies, as well as foreign government-supported producers in Asia and North Africa. Phosphate producers compete primarily based on price, as well as product quality, service and innovation. Major integrated producers of feed phosphates are located in the U.S., Europe and China. Many smaller producers are located in emerging markets around the world. Many of these smaller producers are not miners of phosphate rock or manufacturers of phosphoric acid and are required to purchase this material on the open market.
We believe that we are a low-cost integrated producer of phosphate-based crop nutrients, due in part to our scale, vertical integration and strategic network of production and distribution facilities. As the world’s second largest producer of concentrated phosphates, as well as the second largest miner of phosphate rock in the world and the largest in the U.S., we maintain an advantage over some competitors as the scale of operations effectively reduces production costs per unit. We are also vertically integrated to captively supply one of our key inputs, phosphate rock, to our phosphate production facilities. We believe that our position as an integrated producer of phosphate rock provides us with a significant cost advantage over competitors that are non-integrated phosphate producers. In addition, our ownership in the Miski Mayo Mine allows us to supplement our overall phosphate rock needs. We also sell approximately 25% of Miski Mayo Mine production to third parties. MWSPC enables us to not only further diversify our sources of phosphates but also improve our access to key agricultural countries in Asia and the Middle East.
We produce ammonia at our Faustina, Louisiana concentrates plant in quantities sufficient to meet approximately one third of our total ammonia needs in North America. We do not have ammonia production capacity within Florida to serve our Florida operations, but we have capacity to supply a portion of our requirements by transporting produced ammonia from Louisiana to Florida. We purchase additional ammonia from world markets and thus are subject to significant volatility in our purchase price of ammonia. The CF Ammonia Supply Agreement provides us with a supply of a substantial volume of ammonia at prices based on the price of natural gas.
With our dedicated sulfur transportation barges and tugs, and our ownership interest in Gulf Sulphur Services, we are also well-positioned to source an adequate, flexible and cost-effective supply of sulfur, our third key input, to our Florida and Louisiana phosphate production facilities. We believe that our investments in sulfur logistical and melting assets continue to afford us a competitive advantage compared to other producers in cost and access to sulfur.
With facilities in both central Florida and Louisiana, we are logistically well positioned to fulfill our material needs at very competitive prices. Those multiple production points also afford us the flexibility to optimally balance supply and demand.
Potash Segment
Potash is a commodity available from several geographical regions around the world and, consequently, the market is highly competitive. Through our participation in Canpotex, we compete outside of North America against various independent and state-owned potash producers. Canpotex has substantial expertise and logistical resources for the international distribution of potash, including strategically located export assets in Portland, Oregon, St. John, New Brunswick and Vancouver, British Columbia. Our principal methods of competition with respect to the sale of potash include product pricing and offering consistent, high-quality products and superior service. We believe that our potash cost structure is competitive in the industry and should improve as we continue to complete our potash expansion projects.
Mosaic Fertilizantes
The Mosaic Fertilizantes segment operates in a highly competitive market in Brazil. We compete with a broad range of domestic and international producers, including farmer cooperatives, subsidiaries of larger companies, and independent crop nutrient companies. We believe that having a vertically integrated business, internationally but also in Brazil, provides us with a competitive advantage by allowing us to achieve economies of scale, transportation and storage efficiencies, and obtain market intelligence.
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Mosaic Fertilizantes has a wide variety of customers including farmers, blenders, and other local distributors. We compete with local businesses that offer a wide variety of products that are available from many sources. We believe the strategic location of our mines and chemical plants, in close proximity to our customers, and the benefit of our own distribution network, gives us an advantage over most of our competitors. The vertical integration of our wholly-owned production, along with our distribution network, as well as our focus on product innovation and customer solutions, position us with an advantage over many of our competitors. We have a strong brand in Brazil. In addition to having access to our own production, our distribution activities have the capability to supply a wide variety of crop nutrients to our dealer and farmer customer base.
FACTORS AFFECTING DEMAND
Our results of operations historically have reflected the effects of several external factors which are beyond our control and have in the past produced significant downward and upward swings in operating results. Revenues are highly dependent upon conditions in the agriculture industry and can be affected by, among other factors: crop conditions; changes in agricultural production practices; worldwide economic conditions, including the increasing world population, household incomes, and demand for more protein-rich food, particularly in developing regions such as China, India and Latin America; changing demand for biofuels; variability in commodity pricing; governmental policies; the level of inventories in the crop nutrient distribution channels; customer expectations regarding farmer economics, future crop nutrient prices and availability, and transportation costs, among other matters; market trends in raw material costs; market prices for crop nutrients; and weather. Furthermore, our crop nutrients business is seasonal to the extent farmers and agricultural enterprises in the markets in which we compete purchase more crop nutrient products during the spring and fall. The international scope of our business, spanning the northern and southern hemispheres, reduces to some extent the seasonal impact on our business. The degree of seasonality of our business can change significantly from year to year due to conditions in the agricultural industry and other factors. The seasonal nature of our businesses requires significant working capital for inventory in advance of the planting seasons.
We sell products throughout the world. Unfavorable changes in trade protection laws, policies and measures, government policies and other regulatory requirements affecting trade; unexpected changes in tax and trade treaties; and strengthening or weakening of foreign economies as well as political relations with the U.S. may cause sales trends to customers in one or more foreign countries to differ from sales trends in the U.S.
Our international operations are subject to risks from changes in foreign currencies, or government policy, which can affect local farmer economics.
OTHER MATTERS
Employees
We had 13,570 employees as of December 31, 2022, consisting of approximately 9,868 salaried and 3,702 hourly employees. There are also approximately 198 salaried and 493 hourly employees at the Miski Mayo Mine, of which we own 75% and its results are consolidated within our results of operations.
Labor Relations
As of December 31, 2022:
•We had ten collective bargaining agreements with unions covering certain hourly employees in the U.S. and Canada. Of these employees, approximately 5% are covered under agreements that expire in 2023. All are expected to collectively bargain for new contracts in 2023.
•We had agreements with 35 unions covering all employees in Brazil. More than one agreement may govern our relations with each of these unions. In general, the agreements are renewable on an annual basis.
Failure to renew any of our union agreements could result in a strike or labor stoppage that could have a material adverse effect on our operations. However, we have not experienced a significant work stoppage in many years and historically have had good labor relations.
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Information Available on our Website
Our Annual Report Form on 10-K (“Form 10-K”), Quarterly Reports on Form 10-Q (“Form 10-Q”), Current Reports on Form 8-K (“Form 8-K”), and amendments thereto, filed with the Securities and Exchange Commission (“SEC”) pursuant to Section 13(a) of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder are made available free of charge on our website (www.mosaicco.com) as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. These reports are also available on the SEC’s website (www.sec.gov). The information contained on our website and the SEC’s website is not being incorporated in this report.
HUMAN CAPITAL
Our employees are the foundation of our Company. Our 13,570 colleagues embody Mosaic’s core values of innovation, collaboration, drive and responsibility, and are the key to enabling us to execute our mission to help the world grow the food it needs.
As of December 31, 2022, our regular employee base was made up of the following:
Country
Male
Female
Total
Brazil 5,710 1,174 6,884
United States 3,206 603 3,809
Canada 1,630 288 1,918
Peru 623 68 691
China 103 48 151
India 58 8 66
Paraguay 37 13 50
Saudi Arabia 1 - 1
Total
11,368 2,202 13,570
Mosaic is committed to the well-being and development of our employees by creating and cultivating an innovative and collaborative workplace that welcomes, values and respects diversity of people, thoughts, and perspectives; a workplace free of discrimination and intolerant of bias. As part of Mosaic’s strategic priorities, we are committed to prioritizing our internal culture and external partnerships to meet our commitments to our employees and stakeholders and to be an employer of choice for generations to come.
Employee Health and Safety-safety is non-negotiable. We strive for zero harm to people and zero environmental incidents. Through the implementation of the Mosaic Management System, we have established a structured approach to effectively manage and control risk for the safety and well-being of our colleagues, the environment and our stockholders. The management system defines processes that help support a safe work environment and establish a continuous improvement cycle to adjust for changing conditions and identified risks.
Global Worker Wellness-extending beyond safety, our wellness programs seek to improve the well-being of our employees - and their families - in the areas of physical and psychological health, and financial security. These programs include health screenings, insurance plans, psychological health training and mental health resources, as well as our Environmental, Health and Safety (“EHS”) Risk Reduction Program, various trainings and flexible schedules.
Development-Mosaic believes in continually investing in people and their lifelong learning. Mosaic holds training events throughout the year across all of our locations, and hosts an online education platform, GrowingU, which all employees are encouraged to access. Mosaic offers companywide educational reimbursement programs to help employees in each of our operating companies acquire new skills and capabilities to better meet their job responsibilities and provide for future career opportunities within the Company. Mosaic supports membership in numerous professional associations and encourages participation in work-related external networking groups.
•In 2022, Mosaic continued its pilot programs to help employees gain the knowledge and skills that we believe will be necessary for the next evolution of our business. Like any company, Mosaic experiences turnover and the need to
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replace talent related to retirement and succession. Mosaic seeks to minimize unwanted turnover through its talent review, succession management, performance management, and compensation processes. For certain roles critical to our operations, such as engineering, operations, and employee health and safety professionals, we maintain specific talent programs, internal development strategies, and recruitment pipelines.
Community-Mosaic is a thoughtful and engaged neighbor who invests carefully and generously through long-term partnerships with organizations that are making a difference. We are proud to support organizations and initiatives that create growth and leave a lasting impact in our communities in three main focus areas: food, water and local community. Each year, we invest an average of $15 million. In addition to philanthropic grants and sponsorships of local programs, we also support and facilitate volunteerism by our employees. Similarly, we participate on local committees and associations focused on contributing to the vitality of the people and communities around us.
•2022 was the second year of the Mosaic Employee Giving Program (the“Program”) that provides employees with flexibility to connect their personal causes to corporate giving, matching and volunteerism opportunities. The Program aligns to Mosaic’s strategic priorities, our 2025 Environmental, Social and Governance performance targets, and companywide 2030 global diversity and inclusion goals. Employees can take advantage of Company matching funds through financial contributions, volunteering on personal time, or both - In North America this can be up to $2,000 annually. Our 2030 diversity and inclusion target for community investment provides intentional focus to support underserved or underrepresented populations in regions where we operate.
Diversity, Inclusion and Equal Opportunities-in 2022, Mosaic’s Diversity and Inclusion Program engaged in several initiatives to advance Mosaic’s commitments to our employees and stakeholders, increase accountability and promote a more diverse and inclusive environment. Initiatives included establishing a governance structure that will provide for increased global visibility, and improved efficiencies and collaboration in identifying, developing and executing strategies to increase diversity and inclusion. We announced global 2030 diversity goals and are driving accountability into the business units by establishing business-level initiatives and programs to address opportunities to progress toward the goals. We also established our first executive-led Employee Inclusion Networks to create community and allyship, develop awareness and enhance workforce engagement.
•In 2022, Mosaic continued to evolve and build upon foundational learning by driving conscious inclusion education deeper into the organization and providing an enhanced, self-directed learning platform to our leaders. We refocused our recruitment efforts on creating a more diverse talent pipeline, partnering with a U.S.-based public historically black college to create an immersive internship program; and identifying additional opportunities to attract and retain diverse talent. Additional information about our human capital, including our diversity and inclusion goals for 2030, is available in the sustainability report posted on our website. The information contained on our website is not being incorporated in this report.
•Pay equity is fundamental to our compensation philosophy and our commitment to diversity and inclusion. Mosaic annually evaluates pay equity and compensation practices to ensure fair and equitable treatment of employees based on our pay-for-performance framework. In 2022, Mosaic retained an independent consultant to assist with our pay equity analysis across our global operations and to help us enhance our internal capabilities to annually assess pay disparities. The results revealed 19 outliers without adequate business justifications. Mosaic intends to address each of the instances during our 2023 compensation cycle. Pay equity will be reviewed internally every year and we expect to conduct external independent reviews every three years.
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INFORMATION ABOUT OUR EXECUTIVE OFFICERS
Information regarding our executive officers as of February 23, 2023 is set forth below:
Name Age Position
Philip E. Bauer 50 Senior Vice President, General Counsel and Corporate Secretary
Bruce M. Bodine Jr. 51 Senior Vice President - North America
Clint C. Freeland 54 Senior Vice President and Chief Financial Officer
Christopher A. Lewis 60 Senior Vice President - Human Resources
James “Joc” C. O’Rourke 62 Chief Executive Officer, President and Director
Benjamin J. Pratt 56 Senior Vice President - Government and Public Affairs
Walter F. Precourt III 58 Senior Vice President - Strategy and Growth
Corrine D. Ricard 59 Senior Vice President - Mosaic Fertilizantes
Karen A. Swager 52 Senior Vice President - Supply Chain
Yijun (“Jenny”) Wang 55 Senior Vice President - Global Strategic Marketing, Head of China and India
Philip E. Bauer. Mr. Bauer was promoted to Senior Vice President, General Counsel and Corporate Secretary in January 2023. Since joining Mosaic in 2007, Mr. Bauer has managed legal support for business development activities, potash operations, offshore finance, commercial transactions and corporate governance. Most recently, he was the Vice President-Growth and Development where he helped drive strategic vision across the organization. Prior to Mosaic, he was a partner at an international law firm where he focused his practice on mergers and acquisitions, public and private securities offerings and public company compliance matters, as well as general business advising. Mr. Bauer earned his Juris Doctor degree from The George Washington University Law School in Washington D.C., his Bachelor of Science in Foreign Service with honors from Georgetown University’s School of Foreign Service where he majored in international politics, and his Master of Business Administration from the Kellogg School of Management at Northwestern University.
Bruce M. Bodine Jr. Mr. Bodine was named Senior Vice President - North America effective April 1, 2020. From January 1, 2019 until his appointment as Senior Vice President - North America, Mr. Bodine served as our Senior Vice President - Phosphates and also provided executive oversight for the corporate procurement organization. Prior to that, he served as Senior Vice President - Potash (from June 2016 to December 31, 2018); as Vice President - Potash (from April to May 2016); as Vice President - Supply Chain (from August 2015 to March 2016); as Vice President - Operations Business Development (from October 2014 to August 2015); as Vice President - Operations for our Esterhazy and Colonsay potash production facilities (from July 2013 to October 2014); as the General Manager, Esterhazy (from September 2012 to June 2013); and as the General Manager, Four Corners (from March 2010 to August 2012). Before that, Mr. Bodine held various plant and mine development management positions in the Phosphates segment beginning with Mosaic’s formation in 2004. Mr. Bodine serves as a director of MVM Resources International, B.V., the general partner of Compañia Minera Miski Mayo S.R.L., the joint venture that operates the mines in Peru.
Clint C. Freeland. Mr. Freeland was named Senior Vice President and Chief Financial Officer in June 2018. Prior to joining Mosaic, Mr. Freeland served as Executive Vice President and Chief Financial Officer of Dynegy Inc. from July 2011 until Dynegy’s merger with Vistra Energy Corp. in April 2018. Mr. Freeland was responsible for Dynegy’s financial affairs, including finance and accounting, treasury, tax and banking and credit agency relationships. In November 2011, as part of a reorganization of its subsidiaries, certain of Dynegy’s affiliates filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code (the “Code”) and, in July 2012, Dynegy filed a voluntary petition for reorganization under Chapter 11 of the Code. Dynegy emerged from bankruptcy in October 2012. Prior to joining Dynegy, Mr. Freeland served as Senior Vice President, Strategy & Financial Structure of NRG Energy, Inc (“NRG”). from February 2009 to July 2011. Mr. Freeland served as NRG’s Senior Vice President and Chief Financial Officer from February 2008 to February 2009 and its Vice President and Treasurer from April 2006 to February 2008. Prior to joining NRG, Mr. Freeland held various key financial roles within the energy sector.
Christopher A. Lewis. Mr. Lewis was named Senior Vice President - Human Resources in June 2019. Prior to joining Mosaic, Mr. Lewis held the role of Vice President, Project Execution for Spectra Energy Corporation’s merger into Calgary, Alberta, Canada-based Enbridge, Inc. where he led construction of the company’s energy assets throughout North America, as well as a synergy capture program post acquisition. Prior to that role, Mr. Lewis held roles at DCP Midstream, LLC
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(“DCP”), a natural gas company based in Denver, Colorado where he started as the head of Human Resources while the company was formed as a spin-off from Duke Energy in 2007. From 2010 to 2016, he was DCP’s Chief Corporate Officer, a multi-functional role that included leadership of the human resources function. Earlier in his career, Mr. Lewis held regional and global senior human resources positions at Thomson Multimedia (formerly RCA, GE consumer electronics) and DHL, Inc.
James “Joc” C. O’Rourke. Mr. O’Rourke was promoted to President and Chief Executive Officer effective in August 2015. Previously, he served as Executive Vice President - Operations and Chief Operating Officer since August 2012 and before that as Executive Vice President - Operations since January 2009. Prior to joining Mosaic, Mr. O’Rourke was President, Australia Pacific for Barrick Gold Corporation, the largest gold producer in Australia, since May 2006, where he was responsible for the Australia Pacific Business Unit, consisting of ten gold and copper mines in Australia and Papua, New Guinea. Before that, Mr. O’Rourke was Executive General Manager and Managing Director of Placer Dome Asia Pacific Ltd., the second largest gold producer in Australia, from December 2004, where he was responsible for the Australia Business Unit, consisting of five gold and copper mines; and General Manager of Western Australia Operations for Iluka Resources Ltd., the world’s largest zircon and second largest titanium producer, from September 2003, where he was responsible for six mining and concentrating operations and two mineral separation/synthetic rutile refineries. Mr. O’Rourke had previously held various management, engineering and other roles in the mining industry in Canada and Australia since 1984. Mr. O’Rourke has served on our Board of Directors since May 2015 and is also a director of The Toro Company.
Benjamin J. Pratt. Ben Pratt was named Senior Vice President - Government and Public Affairs in April 2020. Previously, Mr. Pratt held the position of Vice President - Corporate Public Affairs, leading corporate communications and U.S. Federal Government relations, as well as Mosaic’s corporate social responsibility activities. Mr. Pratt serves on several community and business boards, including the Streamsong Resort® Advisory Board and the boards of directors of The Florida Aquarium, the Tampa Bay Economic Development Council and the Tampa Bay Partnership. Prior to joining Mosaic in February 2012, Mr. Pratt was Senior Vice President, Corporate Communications at Ameriprise Financial, Inc., in Minneapolis. Earlier in his career, he worked in a variety of communications and investor relations capacities at The PNC Financial Services Group in Pittsburgh, and at Lehman Brothers and Bear Stearns, both in New York.
Walter F. Precourt III. Mr. Precourt was named Senior Vice President - Strategy and Growth effective January 1, 2019. From June 2016 through March 2020 he also provided executive oversight for the EHS organization. He previously served as Senior Vice President - Phosphates and provided executive oversight for the corporate procurement organization from June 2016 until January 1, 2019, as Senior Vice President - Potash Operations from May 2012 to June 2016, and before that he led the Environment, Health and Safety organization since joining Mosaic in 2009. Prior to joining Mosaic, Mr. Precourt was employed by cement and mineral component producer Holcim (U.S.) where he initially led its safety transformation and later became Vice President of Environment and Government Affairs. Mr. Precourt started his career at The Dow Chemical Company where he served in a variety of roles in Operations, Technology, Capital Project Management, and Environmental, Health and Safety. Mr. Precourt served as a director and was the past Chairman of the Board of the Saskatchewan Potash Producers Association and was a director of Fertilizer Canada.
Corrine D. Ricard. Ms. Ricard was appointed Senior Vice President - Mosaic Fertilizantes effective November 15, 2019. Prior to that she served as Senior Vice President - Commercial since February 2017, Senior Vice President - Human Resources from April 2012 to February 2017, and before that she held a number of other leadership positions at Mosaic, including Vice President - International Distribution, Vice President - Business Development and Vice President - Supply Chain. Prior to Mosaic’s formation, Ms. Ricard worked for Cargill in various roles, including risk management, supply chain and commodity trading.
Karen A. Swager. Ms. Swager was named Senior Vice President - Supply Chain effective April 1, 2020, and also provides executive oversite for the Procurement and corporate EHS teams. From January 1, 2019 until her appointment as Senior Vice President - Supply Chain, she served as Senior Vice President - Potash. Previously, Ms. Swager held leadership positions at Mosaic, including Vice President - Minerals, Vice President - Mining Operations and General Manager in our Phosphates business. She also led the mine planning and strategy group for the Phosphates business.
Yijun (“Jenny”) Wang. Ms. Wang was named Senior Vice President - Global Strategic Marketing, Head of China and India effective January 1, 2022. From October 15, 2020 until her current appointment, Ms. Wang served as Vice President - Global Strategic Marketing. Prior to October 2020, Ms. Wang served as Vice President - Global Product Management and International Distribution and before May 2019, Ms. Wang served as Country Head for China. Ms. Wang has served on the Board of Directors at Canpotex.
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Our executive officers are generally elected to serve until their respective successors are elected and qualified or until their earlier death, resignation or removal. No “family relationships,” as that term is defined in Item 401(d) of Regulation S-K, exist among any of the listed officers or between any such officer and any member of our board of directors.

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ITEM 1A. RISK FACTORS
Item 1A. Risk Factors.
Our business, financial condition or results of operations could be materially adversely affected by any of the risks and uncertainties described below.
Operational Risks
Our operating results are highly dependent upon and fluctuate based upon business and economic conditions and governmental policies affecting the agricultural industry in which we or our customers operate. These factors are outside of our control and may significantly affect our profitability.
The most important of these factors are:
•weather and field conditions (particularly during periods of traditionally high crop nutrients application);
•quantities of crop nutrients imported and exported;
•current and projected inventories and prices, which are heavily influenced by U.S. exports and world-wide markets; and
•governmental policies, including farm and biofuel policies, which may directly or indirectly influence the number of acres planted, the level of inventories, the mix of crops planted or crop prices or otherwise negatively affect our operating results.
International market conditions and the success of our countervailing duty petitions, which are also outside of our control, may also significantly influence our operating results. The international market for crop nutrients is influenced by such factors as the relative value of the U.S. dollar and its impact upon the cost of importing crop nutrients, foreign agricultural policies, including subsidy policies, the existence of, or changes in, import or foreign currency exchange barriers in certain foreign markets, changes in the hard currency demands of certain countries and other regulatory policies of foreign governments, as well as the laws and policies of the U.S. affecting foreign trade and investment, including use of tariffs. In 2020, we filed petitions with the DOC and ITC that requested the initiation of countervailing duty investigations into imports of phosphate fertilizers from Morocco and Russia. The purpose of the petitions was to remedy the distortions that we believe foreign subsidies have caused or are causing in the U.S. market for phosphate fertilizers, and thereby restore fair competition. During the first quarter of 2021, the DOC made final affirmative determinations that countervailable subsidies were being provided by the Russian and Moroccan governments and the ITC made final affirmative determinations that the U.S. phosphate fertilizer industry is materially injured by reason of subsidized phosphate fertilizer imports from Morocco and Russia. As a result of these determinations, the DOC issued countervailing duty orders on phosphate fertilizer imports from Russia and Morocco, which are scheduled to remain in place for at least five years. Currently, the cash deposit rates for such imports are approximately 20 percent for Moroccan producer OCP, 9 percent and 47 percent for Russian producers PhosAgro and Eurochem, respectively, and 17 percent for all other Russian producers. The final determinations in the DOC and ITC investigations are subject to possible challenges before U.S. federal courts and the World Trade Organization, and Mosaic has initiated actions at the U.S. Court of International Trade contesting certain aspects of the DOC’s final determinations that, we believe, failed to capture the full extent of Moroccan and Russian phosphate fertilizer subsidies. Moroccan and Russian producers have also initiated U.S. Court of International Trade actions, seeking lower cash deposit rates and revocation of the countervailing duty orders. Further, the cash deposit rates and the amount of countervailing duties owed by importers on such imports could change based on the results of the DOC’s annual administrative review proceedings. If the final determinations are challenged and subsequently reversed, the results could have an adverse effect on our business, and/or our financial condition or operating results.
The Covid-19 pandemic may materially adversely affect our business operations and financial condition.
The Covid-19 pandemic continues to impact the global economy and could significantly disrupt our operations, key suppliers or third-party logistics providers, customers and ultimate end-users due to the spread of the virus, shelter in place orders, quarantines or other measures implemented to prevent the spread of the virus. In some instances, the pandemic has impacted our business. Our businesses have been impacted by short-term labor shortages due to illness and transportation issues such
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as trucking delays and port congestion which are slowing delivery of inputs to facilities and products to end customers. At this time, the Company has only experienced limited adverse financial and operational Covid-19 related conditions.
Other effects of the Covid-19 pandemic that are not currently foreseeable could materially increase our costs, negatively impact our revenue and/or adversely impact our results of operations and liquidity, possibly to a significant degree. We cannot predict the severity or duration of any such impacts. The Covid-19 pandemic could also have the effect of heightening many of the other risks described in this Item 1A of this Form 10-K.
Unfavorable worldwide economic and market conditions could adversely affect our business, financial condition or operating results.
Economic and market conditions, including inflation, supply chain challenges, high interest rates and foreign exchange volatility, have and may continue to have an impact on our business. Our production costs have also increased due to higher prices for raw materials, including purchased nitrogen, sulfur and ammonia, as well as supply chain challenges, including increased costs and delays caused by transportation and labor shortages. These adverse economic events have adversely affected, and may continue to adversely affect our operating results.
Our crop nutrient business is seasonal and varies based on application rates, which may result in carrying significant amounts of inventory and seasonal variations in working capital, and our inability to predict future seasonal crop nutrient demand accurately may result in excess inventory or product shortages.
The use of crop nutrients is seasonal and varies based on application rates. Farmers tend to apply crop nutrients during two short application periods, the strongest one in the spring, before planting, and the other in the fall, after harvest. As a result, the strongest demand for our products typically occurs during the spring planting season, with a second period of strong demand following the fall harvest. In contrast, we and other crop nutrient producers generally produce our products throughout the year. As a result, we and/or our customers generally build inventories during the low demand periods of the year in order to provide timely product availability during the peak sales seasons. The seasonality of crop nutrient demand results in our sales volumes and net sales typically being the highest during the North American spring season and our working capital requirements typically being the highest just prior to the start of the spring season. Our quarterly financial results can vary significantly from one year to the next due to weather-related shifts in planting schedules and purchasing patterns.
If seasonal demand exceeds our projections, we will not have enough product and our customers may acquire products from our competitors, which would negatively impact our profitability. If seasonal demand is less than we expect, we will have excess inventory and higher working capital and liquidity requirements. The degree of seasonality of our business can change significantly from year to year due to conditions in the agricultural industry and other factors.
Changes in transportation costs can affect our sales volumes and selling prices.
The cost of delivery is a significant factor in the total cost to customers and farmers of crop nutrients. As a result, changes in transportation costs, or in customer expectations about them, can affect our sales volumes and prices.
A disruption to our production, distribution or terminaling facilities could have a material adverse impact on our business. The risk of material disruption increases when demand for our products results in high operating rates at our facilities.
We conduct our operations through a limited number of key production, distribution and terminaling facilities. These facilities include our phosphate mines and concentrates plants; our potash mines; and the ports and other distribution facilities through which we, Canpotex and the other joint ventures in which we participate, conduct our respective businesses, as well as other commercial arrangements with unrelated third parties. Any disruption of operations at any one of these facilities has the possibility of significantly negatively affecting our production or our ability to distribute our products.
Examples of the types of events that could result in a disruption at one of these facilities include: adverse weather; strikes or other work stoppages; civil unrest; deliberate, malicious acts, including acts of terrorism and armed conflict; political or economic instability; cyberattacks; changes in permitting, financial assurance or certain environmental, health and safety laws or other changes in the regulatory environment in which we operate; legal and regulatory proceedings; our relationships with the other member of Canpotex and the other joint ventures in which we participate and their or our exit from participation in such joint ventures; other changes in our commercial arrangements with unrelated third parties; brine inflows at our
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Esterhazy, Saskatchewan mine or our other shaft mines; mechanical failure and accidents or other failures occurring in the course of operating activities, including at our gypstacks, clay settling areas and tailing dams; accidents occurring in the course of operating activities; lack of truck, rail, barge or ship transportation; and other factors.
Reduced oil refinery operating rates in North America could have a material adverse impact on our business, financial condition or operating results.
Reduced oil refinery operating rates in the U.S. and Canada could result in decreased availability of molten sulfur, which could increase costs of sulfur procurement or decrease availability of sulfur needed in our phosphate fertilizer production operations. We have not yet become subject to such results in the sulfur procurement markets, if it becomes necessary to procure sulfur at higher costs, and if we are unable to pass those costs on in our product prices, or if we are unable to procure sulfur at volumes necessary for our operations, such events could have a material adverse effect on our phosphate business, and/or our financial condition or operating results.
Key inputs for the production of our finished goods, including fertilizer, sulfur and ammonia, and energy used in our businesses in the past have been and may in the future be the subject of volatile pricing and availability. Changes in the price or availability of these key inputs for production of finished goods have had, and could again have, a material adverse impact on our businesses.
Fertilizer is a key input for production of our finished goods. Natural gas, ammonia and sulfur are key raw materials used in the manufacture of phosphate crop nutrient products. Natural gas is used as both a chemical feedstock and a fuel to produce anhydrous ammonia, which is a raw material used in the production of concentrated phosphate products. Natural gas is also a significant energy source used in the potash solution mining process. From time to time, our profitability has been and may in the future be adversely impacted by the price and availability of these key inputs and other energy costs. For example, the ongoing conflict between Russia and Ukraine and the related sanctions have led, and may continue to lead, to disruption and instability in global markets, supply chains and volatile pricing and availability of these key inputs and raw materials. Because most of our products are commodities, there can be no assurance that we will be able to pass through increased costs to our customers. A significant increase in the price of fertilizer, natural gas, ammonia, sulfur or energy costs that is not recovered through an increase in the price of our related crop nutrients products could have a material adverse impact on our business. In addition, under an ammonia supply agreement with CF, we have agreed to purchase approximately 545,000 to 725,000 tonnes of ammonia per year at a price to be determined by a formula based on the prevailing price of U.S. natural gas. If the price of natural gas rises or the market price for ammonia falls outside of the range anticipated at execution of this agreement, we may not realize a cost benefit from the natural gas-based pricing over the term of the agreement, or the cost of our ammonia under the agreement could become a competitive disadvantage. At times, we have paid considerably more for ammonia under the agreement than what we would have paid had we purchased it in the spot market. On October 14, 2022, we received notice from CF to exercise the bilateral, contractual right to end the ammonia supply agreement in its current form, effective January 1, 2025. The contract allows for either party to exercise rights on certain dates through 2032 that can result in changes to terms and conditions.
We are subject to risks associated with our international sales and operations, which could negatively affect our sales to customers in foreign countries as well as our operations and assets in foreign countries. Some of these factors may also make it less attractive to distribute cash generated by our operations outside the U.S. to our stockholders, or to utilize cash generated by our operations in one country to fund our operations or repayments of indebtedness in another country or to support other corporate purposes.
For 2022, we derived approximately 75% of our net sales from customers located outside of the U.S. As a result, we are subject to numerous risks and uncertainties relating to international sales and operations, including:
•difficulties and costs associated with complying with a wide variety of complex laws, treaties and regulations;
•unexpected changes in regulatory environments;
•increased government ownership and regulation of the economy in the countries we serve;
•political and economic instability, including the possibility for terrorism, armed conflict, civil unrest, inflation and adverse economic conditions resulting from governmental attempts to reduce inflation, such as imposition of higher interest rates and wage and price controls;
•unpredictable tax audit practices of various governments;
•nationalization of properties by foreign governments;
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•the imposition of tariffs, exchange controls, trade barriers or other restrictions, or government-imposed increases in the cost of resources and materials necessary for the conduct of our operations or the completion of strategic initiatives, including with respect to our joint ventures; and
•currency exchange rate fluctuations between the U.S. dollar and foreign currencies, particularly the Brazilian real and the Canadian dollar.
The occurrence of any of the above in the countries in which we operate or elsewhere could jeopardize or affect our ability to transact business there and could adversely affect our revenues and operating results and the value of our assets located outside of the U.S.
In addition, tax regulations and tax audit practices, currency exchange controls and other restrictions may also make it economically unattractive to:
•distribute cash generated by our operations outside the U.S. to our stockholders; or
•utilize cash generated by our operations in one country to fund our operations or repayments of indebtedness in another country or to support other corporate purposes.
Our assets outside of North America are located in countries with volatile conditions, which could subject us and our assets to significant risks.
We are a global business with substantial assets located outside of the U.S. and Canada. Our operations in Brazil, China, India and Paraguay are fundamental to our business. We have a majority interest in the joint venture entity operating the Miski Mayo Mine that supplies phosphate rock to us. We also have a minority joint venture investment in MWSPC, which operates a mine and chemical complexes that produce phosphate fertilizers and other downstream products in the Kingdom of Saudi Arabia. Volatile economic, market and political conditions may have a negative impact on our operations, operating results and financial condition. In addition, unfavorable changes in trade protection laws, policies and measures, or governmental actions and policies and other regulatory requirements affecting trade and the pricing and sourcing of our raw materials, may also have a negative impact on our operations, operating results and financial condition.
Natural resource extraction is an important part of the economy in Peru, and, in the past, there have been protests against other natural resource operations in Peru. There remain numerous social conflicts that exist within the natural resource sector in Peru. As a result, there is potential for active protests against natural resource extraction companies. If the Government of Peru’s proactive efforts to address the social and environmental issues surrounding natural resource activities are not successful, protests could extend to or impact the Miski Mayo Mine and adversely affect our interest in the Miski Mayo joint venture or the supply of phosphate rock to us from the mine.
Adverse weather conditions, including the impact of hurricanes, and excess heat, cold, snow, rainfall and drought, have in the past, and may in the future, adversely affect our operations, and result in increased costs, decreased sales or production and potential liabilities.
Adverse weather conditions, including the impact of hurricanes and excess heat, cold, snow, rainfall and drought, have in the past and may in the future adversely affect our operations, particularly our Phosphates business. In the past, hurricanes have resulted in physical damage to our facilities in Florida and Louisiana.
Additionally, water treatment costs tend to increase significantly following excess rainfall from hurricanes or other adverse weather. Some of our Florida and Louisiana facilities have had, and others could have, high water levels that have required, or may require, treatment. High water balances in the past at phosphate facilities in Florida also led the Florida Department of Environmental Protection (“FDEP”) to adopt rules requiring phosphate production facilities to meet more stringent process water management objectives for phosphogypsum stack systems. In addition to the FDEP, the U.S. Environmental Protection Agency (“EPA”) and the Louisiana Department of Environmental Quality (“LDEQ”) also have similar requirements for water management objectives as outlined in our U.S. Resource Conservation and Recovery Act (“RCRA”) CD’s.
If excess rainfall or hurricanes occur in coming years, our facilities may be required to take additional measures to manage process water to comply with existing or future requirements and these measures could potentially have a material effect on our business and financial condition.
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Adverse weather may also cause a loss of production and may disrupt our supply chain or adversely affect delivery of our products to our customers. For example, oil refineries that supply sulfur to us may suspend operations as a result of a hurricane, and incoming shipments of ammonia can be delayed, disrupting production at our Florida or Louisiana facilities and delivery of our products. In the second half of 2021, we experienced production impacts related to Hurricane Ida on our Louisiana operations. We also experienced down time and delayed shipments caused by impacts from Hurricane Ian which occurred at the end of the third quarter in 2022.
Excess rainfall and drought have in the past, and may in the future, adversely affect us. For example, in 2019 we experienced the wettest year in North America in nearly 50 years which reduced fertilizer applications by farmers. Excess rainfall also resulted in higher river levels which adversely affected delivery of our products. Drought can reduce farmers’ crop yields and the uptake of phosphates and potash, reducing the need for application of additional phosphates and potash for the next planting season. Drought can also lower river levels, adversely affecting delivery of our products to our customers.
Climate change could adversely affect us.
The impact of climate change on our operations and those of our customers and farmers remains uncertain. Scientists have hypothesized that the impacts of climate change could include changes in rainfall patterns, water shortages, changing sea levels, changing storm patterns and intensities, and changing temperature levels and that these changes could be severe. These impacts could vary by geographic location. Severe climate change could impact our costs and operating activities, the location and cost of global grain and oilseed production, and the supply and demand for grains and oilseeds. At the present time, we cannot predict the prospective impact of climate change on our results of operations, liquidity or capital resources, or whether any such effects could be material to us.
We do not own a controlling equity interest in our non-consolidated companies, some of which are foreign companies, and therefore our operating results and cash flow may be materially affected by how the governing boards and majority owners operate such businesses. There may also be limitations on monetary distributions from these companies that are outside of our control. Together, these factors may lower our equity earnings or cash flow from such businesses and negatively impact our results of operations.
In 2013, we entered into an agreement to form MWSPC, a joint venture in which we hold a 25% interest, to develop a mine and chemical complexes for an estimated $8.0 billion that produces phosphate fertilizers and other downstream products in the Kingdom of Saudi Arabia. The success of MWSPC will depend on, among other matters, the availability and affordability of necessary resources and materials and access to appropriate infrastructure, availability and affordability of transportation, operational decisions of MWSPC management, ability to operate without material disruption to the facilities, as well as the general economic and political stability of the region.
We also hold minority ownership interests in other companies that are not controlled by us. The operations and results of MWSPC will be, and the operations or results of some of the other companies are, significant to us, and their operations can affect our earnings. Because we do not control these companies either at the board or stockholder levels and because local laws in foreign jurisdictions and contractual obligations may place restrictions on monetary distributions by these companies, we cannot ensure that these companies will operate efficiently, pay dividends, or generally follow the desires of our management by virtue of our board or stockholder representation. As a result, these companies may contribute less than anticipated to our earnings and cash flow, negatively impacting our results of operations and liquidity.
Strikes or other forms of work stoppage or slowdown could disrupt our business and lead to increased costs.
Our financial performance is dependent on a reliable and productive work force. A significant portion of our workforce, and that of the joint ventures in which we participate, is covered by collective bargaining agreements with unions. Unsuccessful contract negotiations or adverse labor relations could result in strikes or slowdowns. Any disruption may decrease our production and sales or impose additional costs to resolve disputes. The risk of adverse labor relations may increase as our profitability increases because labor unions’ expectations and demands generally rise at those times.
Our underground potash shaft mines are subject to risks of water inflows.
Over the past century, several potash mines experiencing water inflow problems have flooded. Since December 1985, we have had inflows of brine water into our Esterhazy, Saskatchewan K1 and K2 potash mines. Due to an acceleration of brine inflows, on June 4, 2021, the Company announced a closure of our K1 and K2 potash mine shafts. Our potash mines at Colonsay, Saskatchewan, Carlsbad, New Mexico and our Esterhazy, Saskatchewan K3 mine (though not contiguous with the
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K1/K2 underground inflow region) are also subject to risks from the inflow of water as a result of our underground shaft mining operations. Though minor inflows are regularly managed, it is possible that significant water inflows could occur which may present risks to our employees and our operations, and which may require us to incur brine management costs, change our mining processes, or abandon our operating mines.
See the “Key Factors that can Affect Results of Operations and Financial Condition” and “Potash Net Sales and Gross Margin” sections of our Management’s Analysis in this Form 10-K and the Esterhazy closure costs in Note 26 of this Form 10-K, which sections are incorporated herein by reference, for a discussion of costs, risks and other information relating to the brine inflows.
Accidents or equipment failures occurring in the course of our operating activities could result in significant liabilities, interruptions or shutdowns of facilities or the need for significant safety or other expenditures.
We engage in mining and industrial activities that can result in serious accidents or experience equipment failures. If our procedures are not effective, or if an accident or equipment failure were to occur, we could be subject to liabilities arising out of property damage, personal injuries or death, our operations could be interrupted and we might have to shut down or abandon affected facilities. Accidents could cause us to expend significant amounts to remediate safety issues or to repair damaged facilities and could result in significant liabilities and/or impact on the financial performance of the Company, including material adverse effects on our results of operations, liquidity or financial condition. For example:
•Some of our facilities are subject to potential damage from seismic activity.
The excavation of mines in some parts of the world can result in potential seismic events or can increase the likelihood or potential severity of a seismic event. Our Esterhazy mine and southern Louisiana facilities have experienced minor seismic events from time to time. A significant seismic event at one our facilities or mines could result in serious injuries or death, or damage to or flooding of operations, or damage to adjoining properties or facilities of unrelated third parties.
•Our underground potash shaft mines are subject to risk from fire. In addition, fire at one of our underground shaft mines could halt our operations at the affected mine while we investigate the origin of the fire or for longer periods for remedial work or otherwise.
Our underground potash shaft mines at Esterhazy and Colonsay, Saskatchewan, Carlsbad, New Mexico and Taquari-Vassouras, Brazil are subject to risk from fire. In the event of a fire, if our emergency procedures are not successful, we could have significant injuries or deaths, or shutdowns of our facilities, or could cause us to expend significant amounts to remediate safety issues or repair damaged facilities.
•We handle significant quantities of ammonia at several of our facilities. If our safety procedures are not effective, an accident involving our ammonia operations could result in serious injuries or death, or result in the shutdown of our facilities.
We produce ammonia at our Faustina, Louisiana phosphate concentrates plant, use ammonia in significant quantities at all of our Florida and Louisiana phosphates concentrates plants and store ammonia at some of our distribution facilities. In Florida, ammonia is received at terminals in Tampa and transported by pipelines and trucks to our facilities. We also use ammonia in our Brazil phosphate operations. Our ammonia is generally stored and transported at high pressures or cryogenically. Accidents at any of our ammonia facilities could result in serious injury or death and could adversely impact our operations.
•We also use or produce other hazardous chemicals at some of our facilities. If our safety procedures are not effective, an accident involving these other hazardous chemicals could result in serious injuries or death, or result in the shutdown of our facilities.
We use sulfuric acid in the production of concentrated phosphates in our Florida and Louisiana operations and our Brazil operations. We also use or produce other hazardous chemicals at some of our facilities. An accident involving any of these chemicals could result in serious injuries or death, or evacuation of areas near an accident. An accident could also result in property damage or shutdown of our facilities, or cause us to expend significant amounts to remediate safety issues or to repair damaged facilities.
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Regulatory Risks
The environmental, health and safety regulations and requirements to which we are subject may have a material adverse effect on our business, financial condition and results of operations.
We are subject to numerous environmental, health and safety laws and regulations in the U.S., Canada, China, Brazil and other countries in which we operate. These laws and regulations govern a wide range of matters, including environmental controls, land reclamation, discharges to air and water, remediation of hazardous substance releases and in some cases, demonstration of financial assurance. They significantly affect our operating activities as well as the level of our operating costs and capital expenditures. In some jurisdictions, environmental laws change frequently and it may be challenging for us to achieve and maintain compliance with all material environmental laws at all times. If we are not in compliance, we may be subject to enforcement or third-party claims, and may require new investment in our business. In those circumstances, our financial condition and results of operations may be materially adversely affected.
The U.S. Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) imposes liability, including for cleanup costs, without regard to fault or to the legality of a party’s conduct, on certain categories of persons, including current and former owners and operators of a site and parties who are considered to have contributed to the release of “hazardous substances” into the environment. Under CERCLA, or various U.S. state analogues, a party may, under certain circumstances, be required to bear more than its proportional share of cleanup costs at a site where it has liability if payments cannot be obtained from other responsible parties. As a crop nutrient company producing and managing chemicals, we periodically have incurred and may incur liabilities and cleanup costs, under CERCLA and other environmental laws, with regard to our current or former facilities, adjacent or nearby third-party facilities or offsite disposal locations.
Our operations are dependent on having the required permits and approvals from governmental authorities. Denial or delay by a government agency in issuing any of our permits and approvals or imposition of restrictive conditions on us with respect to these permits and approvals may impair our business and operations.
Our operations, including our mines, are dependent on having the required permits and approvals from governmental authorities. Denial or delay by a government agency in issuing, modifying or renewing any of our permits and approvals or imposition of restrictive or cost prohibitive conditions on us with respect to these permits and approvals may impair our business and operations and could have a material adverse effect on our business, financial condition or results of operations. For example, In Florida, local community involvement has become an increasingly important factor in the permitting process for mining companies, and various counties and other parties in Florida have in the past filed and continue to file lawsuits challenging the issuance or renewal of some of the permits we require. These actions can significantly delay issuance of the permits we need to operate or expand operations.
We have included additional discussion about permitting for our phosphate mines in Florida under “Environmental, Health, Safety and Security Matters-Operating Requirements and Impacts-Permitting” in our Management’s Analysis.
We are, and may in the future be, involved in legal and regulatory proceedings that could be material to us.
We have in the past been, are currently and, in the future may be, subject to legal and regulatory proceedings that could be material to our business, results of operations, liquidity or financial condition. Joint ventures in which we participate could also become subject to these sorts of proceedings. These proceedings may be brought by the government or private parties and may arise out of a variety of matters, including:
•Allegations that we have violated environmental, health and safety laws and regulations or that we are responsible for adversely affecting nearby properties. We are currently involved in proceedings alleging that, or to review whether, we have violated environmental laws in the U.S. and Brazil.
•Allegations by private parties that our operations have resulted in personal injury, property damage or damage to business operations.
•Antitrust, commercial, tax (including tax audits) and other disputes.
The legal and regulatory proceedings to which we are currently or may in the future be subject may, depending on the circumstances, result in monetary damage awards, fines, penalties, other liabilities, injunctions or other court or administrative rulings that interrupt, impede or otherwise materially affect our business operations or criminal sanctions.
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We have included additional information with respect to pending legal and regulatory proceedings in Note 23 of our Notes to Consolidated Financial Statements and in this Form 10-K in Part I, Item 3, “Legal Proceedings”.
Environmental, health and safety and food and crop laws and regulations to which we are subject may become more stringent over time. This could increase the effects on us of these laws and regulations, and the increased effects could be materially adverse to our business, operations, liquidity and/or results of operations.
Heightened regulation on food and crop inputs (including crop nutrients) and environmental, health and safety issues in the U.S., Canada, China, Brazil, Paraguay and other countries where we operate can be expected to result in requirements that apply to us and our operations that may be more stringent than those described elsewhere in this report. These requirements may include:
•Increased levels of future investments and expenditures for environmental controls at ongoing operations, which will be charged against income from future operations; increased levels of the financial assurance requirements to which we are subject, and increased efforts or costs to obtain permits or denial of permits.
•New or interpretations of existing statutes or regulations that impose new or more stringent standards, restrictions or liabilities related to elevated levels of naturally-occurring radiation that arise on formerly mined land and other matters that could increase our expenses, capital requirements or liabilities or adversely affect our business, liquidity or financial condition.
Environmental justice considerations could have a material adverse effect on our business, financial condition or results of operations.
The U.S. federal and some state governments increasingly are adopting standards or policies requiring environmental justice reviews in some permitting actions. In general, they require governmental agencies to evaluate projects for disproportionate impacts to disadvantaged or already burdened communities. If such conditions are found, they might result in a permit denial, or restrictive or cost prohibitive conditions imposed on our operations and may impair our business and operations and could have a material adverse effect on our business, financial condition or results of operations.
We are subject to financial assurance requirements as part of our routine business operations. If we were unable to satisfy financial assurance requirements, we might not be able to obtain or maintain permits we need to operate our business as we have in the past. In addition, our compliance with these requirements could materially affect our business, results of operations or financial condition.
In many cases, as a condition to obtaining or maintaining permits and approvals or otherwise, we are required to comply with financial assurance requirements of governmental authorities. The purpose of these requirements is to provide comfort to the government that sufficient funds will be available for the ultimate closure, post-closure care or reclamation of our facilities.
In some cases, we comply through the satisfaction of applicable state financial strength tests. But, if we are unable to do so, we must utilize alternative methods of complying with these requirements; if we do not, we would be prevented from continuing our operations and also could be subject to enforcement proceedings brought by relevant government agencies. Alternative compliance methods include providing credit support in the form of cash escrows or trusts, surety bonds from surety or insurance companies, letters of credit from banks, or other forms of financial instruments or collateral to satisfy the financial assurance requirements. Use of alternative means of financial assurance imposes additional expense on us. Some of them, such as letters of credit, also use a portion of our available liquidity. Other alternative means of financial assurance, such as surety bonds, generally require us to obtain a discharge of the bonds or to post additional collateral (typically in the form of cash or letters of credit) at the request of the issuer of the bonds. Collateral that is required may be in forms that utilize a portion of our available liquidity, or in the form of assets such as real estate, which reduces our flexibility to manage or sell assets.
We have included additional discussion about financial assurance requirements under “Off-Balance Sheet Arrangements and Obligations-Other Commercial Commitments” in our Management’s Analysis.
Regulatory restrictions on greenhouse gas emissions and climate change regulations in the U.S., Canada or elsewhere could adversely affect us, and these effects could be material.
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Various governmental initiatives to limit greenhouse gas emissions are under way or under consideration around the world. These initiatives could restrict our operating activities, require us to make changes in our operating activities that would increase our operating costs, reduce our efficiency or limit our output, require us to make capital improvements to our facilities, increase our energy, raw material and transportation costs or limit their availability, or otherwise adversely affect our results of operations, liquidity or capital resources, and these effects could be material to us.
Governmental greenhouse gas emission initiatives include, among others, the December 2015 agreement (the “Paris Agreement”) which was the outcome of the 21st session of the Conference of the Parties under the United Nations Framework Convention on Climate Change (“UNFCCC”). The Paris Agreement, which was signed by nearly 200 nations, including the U.S. and Canada, entered into force in late 2016 and sets out a goal of limiting the average rise in temperatures for this century to below 2 degrees Celsius. Each signatory is expected to develop its own plan (referred to as a Nationally Determined Contribution, or “NDC”) for reaching that goal.
In May 2017, the U.S. announced that the it would withdraw from the Paris Agreement. In January 2021, the U.S. rejoined. Previously, the U.S. had submitted an NDC aiming to achieve, by 2025, an economy-wide target of reducing greenhouse gas emissions by 26-28% below its 2005 level. The NDC also aims to use best efforts to reduce emissions by 28%. The U.S. target covers all greenhouse gases that were a part of the 2014 Inventory of Greenhouse Gas Emissions and Sinks. While the extent of the U.S.’s involvement in the Paris Agreement and the status of this NDC is unclear, various legislative or regulatory initiatives relating to greenhouse gases have been adopted or considered by the U.S. Congress, the EPA or various states and those initiatives already adopted may be used to implement a U.S. NDC. Additionally, more stringent laws and regulations may be enacted to accomplish the goals set out in the NDC.
Brazil ratified the Paris Agreement in September 2016, committing to an NDC that includes an economy-wide target of 1.3 GtCO2e by 2025 and 1.2 GtCO2e by 2030. In 2020, Brazil submitted a new NDC, which reaffirms the country’s commitment to reducing total net greenhouse gas emissions by 37% in 2025 and by 43% in 2030. The NDC further commits to achieving climate neutrality in 2060. Complete details surrounding Brazil’s plan for achieving the greenhouse gas emissions reductions and climate neutrality are uncertain. The government of Brazil may intervene with new or different policy instruments to meet the goals set out in the 2020 NDC.
Canada’s intended NDC aims to achieve, by 2030, an economy-wide target of reducing greenhouse gas emissions by 40-45% below 2005 levels. The Canadian federal government has also introduced legislation establishing a long-term target of “net-zero” greenhouse gas emissions by 2050. More stringent laws and regulations may be enacted to accomplish the goals set out in Canada’s NDC and Canada’s own long-term emissions reduction targets.
In March, 2022, the SEC issued proposed rules on climate change disclosure requirements that, if adopted as proposed, will require disclosure of extensive detailed climate-related information. It is possible that such legislation and other future legislation or regulation addressing climate change, including the Paris Agreement or any new international agreements, could adversely affect our operating activities, energy, raw material and transportation costs, results of operations, liquidity or capital resources, and these effects could be material or adversely impact our competitive advantage. In addition, to the extent climate change restrictions imposed in countries where our competitors operate, such as India, former Soviet Union countries or Morocco, are less stringent than in the U.S., Canada or Brazil our competitors could gain cost or other competitive advantages over us.
We use tailings, sediments and water to manage residual materials generated by our facilities, including Brazilian mining operations. If our safety procedures are not effective, an accident involving these impoundments could result in serious injuries or death, damage to property or the environment, or result in the shutdown of our facilities, any of which could materially adversely affect our results of operations.
Mining and processing of potash and phosphate generate residual materials that must be managed both during the operation of the facility and upon facility closure. Potash tailings, consisting primarily of salt and clay, are stored in surface disposal sites. Phosphate residuals from mining or processing are deposited in large tailing dams and in clay settling areas and phosphogypsum stacks. They are regularly monitored to evaluate structural stability and for leaks. The failure of or a breach at any of our impoundments at any of our operations could cause severe property and environmental damage and loss of life, could result in the shut down or idling of our facilities and could have a material adverse effect on our results of operations.
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Legislation at both Brazilian federal and state levels has introduced new rules regarding tailings dam safety, construction, licensing and operations. We cannot predict the full impact of these legislative or potentially related judicial actions, or future actions, or whether or how it would affect our Brazilian operations or customers.
Any accident involving our tailings or other dams, or any shut down or idling of our related mines, could have a material adverse effect on our results of operations.
Competitive Risks
Our competitive position could be adversely affected if we are unable to participate in continuing industry consolidation.
Most of our products are readily available from a number of competitors, and price and other competition in the crop nutrient industry is intense. In addition, crop nutrient production facilities and distribution activities frequently benefit from economies of scale. As a result, particularly during pronounced cyclical troughs, the crop nutrient industry has a long history of consolidation. Mosaic itself is the result of a number of industry consolidations. We expect consolidation among crop nutrient producers could continue. Our competitive position could suffer to the extent we are not able to expand our own resources either through consolidations, acquisitions, joint ventures or partnerships. In the future, we may not be able to find suitable companies to combine with, assets to purchase or joint venture or partnership opportunities to pursue. Even if we are able to locate desirable opportunities, we may not be able to enter into transactions on economically acceptable terms. If we do not successfully participate in continuing industry consolidation, our ability to compete successfully could be adversely affected and result in the loss of customers or an uncompetitive cost structure, which could adversely affect our sales and profitability.
Our strategy for managing market and interest rate risk may not be effective.
Our businesses are affected by fluctuations in market prices for our products, the purchase price of natural gas, ammonia and sulfur consumed in operations, freight and shipping costs, foreign currency exchange rates and interest rates. We periodically enter into derivatives and forward purchase contracts to mitigate some of these risks. However, our strategy may not be successful in minimizing our exposure to these fluctuations. See “Market Risk” in our Management’s Analysis and Note 15 of our Notes to Consolidated Financial Statements that is incorporated by reference in this report in Part II, Item 8.
A shortage or unavailability of trucks, railcars, tugs, barges and ships for carrying our products and the raw materials we use in our business could result in customer dissatisfaction, loss of production or sales and higher transportation or equipment costs.
We rely heavily upon truck, rail, tug, barge and ocean freight transportation to obtain the raw materials we need to distribute raw materials among our mines and concentrates facilities and to deliver our products to our customers. In addition, the cost of transportation is an important part of the final sale price of our products. Finding affordable and dependable transportation is important in obtaining our raw materials and to supply our customers. Higher costs for these transportation services or an interruption or slowdown due to factors including high demand, high fuel prices, labor disputes, layoffs or other factors affecting the availability of qualified transportation workers, adverse weather or other environmental events, or changes to rail, barge or ocean freight systems, could negatively affect our ability to produce our products or deliver them to our customers, which could affect our performance and results of operations.
Strong demand for grain and other products and a strong world economy increases the demand for and reduces the availability of transportation, both domestically and internationally. Shortages of railcars, barges and ocean transport for carrying product and increased transit time may result in customer dissatisfaction, loss of sales and higher equipment and transportation costs. In addition, during periods when the shipping industry has a shortage of ships, the substantial time needed to build new ships prevents rapid market response. Delays and missed shipments due to transportation shortages, including vessels, barges, railcars and trucks, could result in customer dissatisfaction or loss of sales potential, which could negatively affect our performance and results of operations.
Our success will continue to depend on our ability to attract and retain highly qualified and motivated employees.
We believe our continued success depends on the collective abilities and efforts of our employees. Like many businesses, a significant number of our employees, including some of our most highly skilled employees with specialized expertise in general corporate matters, potash and phosphates operations, will be approaching retirement age throughout the next decade
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and beyond. In addition, we compete for a talented workforce with other businesses, particularly within the mining and chemicals industries, in general, and the crop nutrients industry, in particular. Our expansion plans are highly dependent on our ability to attract, retain and train highly qualified and motivated employees who are essential to the success of our ongoing operations as well as to our expansion plans. If we were to be unsuccessful in attracting, retaining and training the employees we require, our ongoing operations and expansion plans could be materially and adversely affected.
Our most important products are global commodities, and we face intense global competition from other crop nutrient producers that can affect our prices and volumes.
Our most important products are concentrated phosphate crop nutrients, including diammonium phosphate, or DAP, monoammonium phosphate, or MAP, MicroEssentials® and muriate of potash, or MOP. We sell most of our DAP, MAP and MOP in the form of global commodities. Our sales of these products face intense global competition from other crop nutrient producers.
Changes in competitors’ production or shifts in their marketing focus have in the past significantly affected both the prices at which we sell our products and the volumes that we sell, and are likely to continue to do so in the future. Increases in the global supply of DAP, MAP and MOP or competitors’ increased sales into regions in which we have significant sales could adversely affect our prices and volumes.
Competitors and new entrants in the markets for both concentrated phosphate crop nutrients and potash have in recent years expanded capacity, or begun, or announced plans, to expand capacity or build new facilities. The extent to which current global or local economic and financial conditions, changes in global or local economic and financial conditions, or other factors may cause delays or cancellation of some of these ongoing or planned projects, or result in the acceleration of existing or new projects, is unclear. In addition, certain of our products sold to China may be subject to additional tariffs due to ongoing trade tensions between China and the U.S.. The level of exports by Chinese producers of concentrated phosphate crop nutrients depends to a significant extent on Chinese government actions to curb exports through, among other measures, prohibitive export taxes at times when the government believes it desirable to assure ample domestic supplies of concentrated phosphate crop nutrients to stimulate grain and oilseed production.
In addition, the other member of Canpotex is among our competitors who may, in the future, independently expand its potash production capacity at a time when each Canpotex member’s respective shares of Canpotex sales is based upon that member’s respective proven peaking capacity for producing potash. When a Canpotex member expands its production capacity, the new capacity is added to that member’s proven peaking capacity based on a proving run at the maximum production level. Alternatively, Canpotex members may elect to rely on an independent engineering firm and approved protocols to calculate their proven peaking capacity. Antitrust and competition laws prohibit the members of Canpotex from coordinating their production decisions, including the timing of their respective proving runs. Worldwide potash production levels could exceed then-current market demand, resulting in an oversupply of potash and lower potash prices.
All of the foregoing events are beyond our control. The effects of any of these events occurring could be materially adverse to our results of operations.
Some of our competitors and potential competitors have greater resources than we do, which may place us at a competitive disadvantage and adversely affect our sales and profitability. These competitors include state-owned and government-subsidized entities in other countries.
We compete with a number of producers throughout the world, including state-owned and government-subsidized entities. Some of these entities have greater total resources than we do, and may be less dependent on earnings from crop nutrients sales than we are. In addition, some of these entities have access to lower cost or government-subsidized natural gas supplies, mining rights and reserves, financing, transportation and tax incentives, placing us at a competitive disadvantage. Furthermore, certain governments as owners of some of our competitors may be willing to accept lower prices and profitability on their products in order to support domestic employment or other political or social goals. To the extent other producers of crop nutrients enjoy competitive advantages or are willing to accept lower profit levels, the price of our products, our sales volumes and our profits may be adversely affected.
Industry Risks
Future product or technological innovation could affect our business.
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Future product or technological innovations by third parties, such as the development of seeds that require less crop nutrients, the development of substitutes for our products or developments in the application of crop nutrients, if they occur, could have the potential to adversely affect the demand for our products and our results of operations, liquidity and capital resources.
The success of our strategic initiatives depends on our ability to effectively manage these initiatives, and to successfully integrate and grow acquired businesses.
We have significant ongoing strategic initiatives, including our plans to expand the annual production capacity of our potash business and MWSPC. These strategic initiatives involve capital and other expenditures and require effective project management and, in the case of potential strategic acquisitions, successful integration. To the extent the processes we (or, for our joint venture, we together with our joint venture partners) put in place to manage these initiatives or integrate and grow acquired businesses are not effective, our capital expenditure and other costs may exceed our expectations or the benefits we expect from these initiatives might not be fully realized, or both, thereby resulting in adverse effects on our operating results and financial condition.
Cyberattacks could disrupt our operations and have a material adverse impact on our business.
As a global company, we utilize and rely upon information technology systems in many aspects of our business, including internal and external communications and the management of our accounting, financial, production and supply chain functions. As we become more dependent on information technologies to conduct our operations, and as the number and sophistication of cyberattacks increase, the risks associated with cyber security increase. These risks apply to us, our employees, and to third parties on whose systems we rely for the conduct of our business. We have experienced cyberattacks but to our knowledge, we have not experienced any material breaches of our technology systems. Failure to effectively anticipate, prevent, detect and recover from the increasing number and sophistication of cyberattacks could result in theft, loss or misuse of, or damage or modification of our information, and cause disruptions or delays in our business, reputational damage and third-party claims, which could have a material adverse effect on our results of operations or financial condition.
Our crop nutrients and other products are subject to price and demand volatility resulting from periodic imbalances of supply and demand, which may cause our results of operations to fluctuate.
Historically, the market for crop nutrients has been cyclical, and prices and demand for our products have fluctuated significantly. Periods of high demand, increasing profits and high capacity utilization tend to lead to new plant investment and increased production in the industry. This growth increases supply until the market is over-saturated, leading to declining prices and declining capacity utilization until the cycle repeats.
As a result, crop nutrient prices and volumes have been, and are expected to continue to be, volatile. This price and volume volatility may cause our results of operations to fluctuate and potentially deteriorate. The price at which we sell our crop nutrient products and our sales volumes could fall in the event of industry oversupply conditions, which could have a material adverse effect on our business, financial condition and results of operations. In contrast, high prices may lead our customers and farmers to delay purchasing decisions in anticipation of future lower prices, thus impacting our sales volumes.
Due to reduced market demand, depressed agricultural economic conditions and other factors, we and our predecessors have at various times suspended or curtailed production at some of our facilities. The extent to which we utilize available capacity at our facilities will cause fluctuations in our results of operations, as we will incur costs for any temporary or indefinite shutdowns of our facilities. In addition, lower sales tend to lead to higher fixed costs as a percentage of sales.
Financial Risks
During periods when the prices for our products are falling because of falling raw material prices, we could be required to write-down the value of our inventories. Any such write-down could adversely affect our results of operations and the value of our assets.
We carry our inventories at the lower of cost or market. In periods when the market prices for our products are falling rapidly, including in response to falling market prices for raw materials, it is possible that we could be required to write-down the value of our inventories if market prices fall below our costs. Any such write-down could adversely affect our results of operations and the value of our assets. Any such effect could be material.
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Our estimates of future selling prices reflect in part the purchase commitments we have from our customers. As a result, defaults on these existing purchase commitments because of the global or local economic and financial conditions or for other reasons could adversely affect our estimates of future selling prices and require additional inventory write-downs.
We may incur significant non-cash charges if our goodwill or long-lived assets become impaired in the future.
Under accounting principles generally accepted in the U.S. (“GAAP”), we review goodwill for impairment on an annual basis or more frequently if events or circumstances indicate that their carrying value may not be recoverable. Other long-lived assets, including property, plant and equipment, are reviewed if events or circumstances indicate that their carrying value may not be recoverable. The process of impairment testing involves a number of judgments and estimates made by management, including the fair values of assets and liabilities, future cash flows, our interpretation of current economic indicators and market conditions, overall economic conditions and our strategic operational plans with regard to our business units. If the judgments and estimates used in our analysis are not realized or change due to external factors, then actual results may not be consistent with these judgments and estimates, and our goodwill and intangible assets may become impaired in future periods. If our goodwill or long-lived assets are determined to be impaired in the future, we may be required to record non-cash charges to earnings during the period in which the impairment is determined, which could be significant and have an adverse effect on our financial condition and results of operations. We have, in the past, and may in the future, be required to write down the value of our goodwill or other long-lived assets, and such future write downs could be material. See Note 10, Goodwill and Note 26, Mine Closure Costs, in the accompanying consolidated financial statements for further information related to charges incurred in 2019.
Changes in tax laws or regulations or their interpretation, or exposure to additional tax liabilities, could materially adversely affect our operating results and financial condition.
We are subject to taxes, including income taxes, resource taxes and royalties, and non-income based taxes in the U.S., Canada, China, Brazil and other countries where we operate. Changes in tax laws or regulations or their interpretation could result in higher taxes, which could materially adversely affect our operating results and financial condition.
In 2018, U.S. federal tax law changes took effect. This was a significant change to the U.S. system of taxation resulting in numerous areas open to interpretation given the newness and breadth of changes to the rules. As a result, risk exists related to developing interpretation and application of the rules that could result in higher taxes which could materially adversely affect our operating results and financial condition.
We are subject to periodic audits by various levels of tax authorities in all countries where we have meaningful operations. The due process, audit and appeal practices and procedures of such authorities may vary significantly by jurisdiction, may be unpredictable (and unreliable) in nature and may result in significant risk to us. For various reasons, some governments may issue significant reassessments on audit based positions not fully grounded in law or fact, even though, upon disputing the reassessments, a great many are overturned on administrative appeal and through the court system. Certain systems involve tax litigation as a common practice. In certain countries, there are requirements to pay a reassessment (even though the matter has not been finally decided by the tax administration or a court of law) while the taxpayer has a well-supported objection and appeals administratively or in court. This may result in tying up significant funds and/or creating adverse treasury and credit risks that may interrupt, impede or otherwise materially affect our business operations.
We extend trade credit to our customers and guarantee the financing that some of our customers use to purchase our products. Our results of operations may be adversely affected if these customers are unable to repay the trade credit from us or financing from their banks. Increases in prices for crop nutrient, other agricultural inputs and grain may increase this risk.
We extend trade credit to our customers in the U.S. and throughout the world, in some cases for extended periods of time. In Brazil, where there are fewer third-party financing sources available to farmers, we also have several programs under which we guarantee customers’ financing from financial institutions that they use to purchase our products. As our exposure to longer trade credit extends throughout the world and use of guarantees in Brazil increases, we are increasingly exposed to the risk that some of our customers will not pay us or the amounts we have guaranteed. Additionally, we become increasingly exposed to risk due to weather and crop growing conditions, fluctuations in crop nutrient prices, commodity prices or foreign currencies, and other factors that influence the price, supply and demand for agricultural commodities. Significant defaults by our customers could adversely affect our financial condition and results of operations.
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Due to the global nature of our operations, we are exposed to currency exchange rate changes, which may cause fluctuations in earnings and cash flows.
Our primary foreign currency exposures are the Canadian dollar and Brazilian real. The functional currency for our Brazilian subsidiaries is the Brazilian real. However, we finance our Brazilian inventory purchases with U.S. dollar-denominated liabilities. The functional currency of several of our Canadian entities is the Canadian dollar. For those entities, sales are primarily denominated in U.S. dollars, but the costs are paid principally in Canadian dollars. Canadian entities have significant U.S. dollar denominated intercompany loans and U.S. entities, with the U.S. dollar as functional currency, have Brazilian real denominated loans. During periods of local or global economic crises, local currencies may be devalued significantly against the U.S. dollar. During times of a strengthening dollar, our net earnings can be reduced due to transaction currency losses arising from these exposures of U.S. dollar denominated liabilities held in the Brazilian and Canadian entities and Brazilian real denominated assets held in U.S. entities. To reduce economic risk and volatility on expected cash flows that are denominated in the Canadian dollar and Brazilian real, we use financial instruments that may include forward contracts, options or collars when unable to naturally offset the exposures.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
Item 1B. Unresolved Staff Comments.
None.
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ITEM 2. PROPERTIES
Item 2. Properties.
SUMMARY OVERVIEW OF MINING
As used in this Form 10-K, the terms “mineral resource,” “measured mineral resource,” “indicated mineral resource,” “inferred mineral resource,” “mineral reserve,” “proven mineral reserve” and “probable mineral reserve” are defined and used in accordance with S-K 1300. All mineral resources and mineral reserves have been prepared by qualified persons. Under S-K 1300, mineral resources may not be classified as “mineral reserves” unless the determination has been made by a qualified person that the mineral resources can be the basis of an economically viable project. Mineral resources are not mineral reserves and do not meet the threshold for mineral reserve modifying factors, such as estimated economic viability, that would allow for conversion to mineral reserves. There is no certainty that any part of the mineral resources estimated will be converted into mineral reserves.
Except for that portion of mineral resources classified as mineral reserves, mineral resources have not demonstrated economic value. Inferred mineral resources are estimates based on limited geological evidence and sampling and have too high of a degree of uncertainty to apply relevant technical and economic factors likely to influence the prospects of economic extraction in a manner useful for evaluation of economic viability. Estimates of inferred mineral resources may not be converted to a mineral reserve. It cannot be assumed that all or any part of an inferred mineral resource will be upgraded to a higher category. A significant amount of exploration must be completed to determine whether an inferred mineral resource may be upgraded to a higher category. Therefore, you are cautioned not to assume that all or any part of an inferred mineral resource exists, that it can be the basis of an economically viable project, or that it will be upgraded to a higher category.
Properties
The subsections below describe the property locations, overviews and mineral resource and mineral reserve estimates. Our material properties, as determined pursuant to S-K 1300, are Florida Phosphates, Esterhazy, Belle Plaine and Tapira. Further information about these properties can be found in the technical report summaries (“TRSs” or “TRS”) filed as exhibits to this Form 10-K.
Property Locations
Figure 2.1 and Figure 2.2 show the locations of each resource and reserve property:
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Figure 2.1: North America Resource and Reserve Location Map
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Figure 2.2: South America Resource and Reserve Location Map
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Property Overview
Annual Production
Table 2.1 shows the production tonnage and grade for all phosphate properties for 2022, 2021 and 2020.
Table 2.1 Summary of Production - Phosphate Properties
(in millions of tonnes) December 31,
Mine Property Annual Operational Capacity (tonnes)(a)(b)
2022 2021 2020
Production (tonnes) %P2O5(c)
Production (tonnes) %P2O5(c)
Production (tonnes) %P2O5(c)
Phosphate (Grade: P2O5)(c)
Florida 14.0 9.6 27.6 11.1 28.0 12.8 28.4
Total United States 14.0 9.6 27.6 11.1 28.0 12.8 28.4
Miski Mayo (d)
4.0 4.2 29.7 4.2 29.8 3.3 29.6
Total Peru 4.0 4.2 29.7 4.2 29.8 3.3 29.6
Araxá / Patrocinio 1.3 0.9 34.5 0.8 34.9 0.9 35.0
Cajati 0.6 0.3 34.3 0.3 34.1 0.4 33.8
Catalão 1.0 1.1 34.8 1.1 34.9 1.1 34.5
Tapira 2.1 1.9 35.1 1.8 35.1 1.9 35.3
Total Brazil 5.0 4.2 34.8 4.0 34.9 4.3 34.7
Total Phosphate 23.0 18.0 29.8 19.3 29.8 20.4 29.9
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(a)Annual operational capacity is the expected average long-term annual capacity for finished goods considering constraints represented by the grade, quality and quantity of the reserves being mined as well as equipment performance and other operational factors.
(b)Actual production varies from annual operational capacity shown in the above table due to factors that include, among others, the level of demand for our products, the quality of the reserves, the nature of the geologic formations we are mining at any particular time, maintenance and turnaround time, accidents, mechanical failure, weather conditions, and other operating conditions.
(c)The percent of P2O5 represents a measure of the phosphate content in phosphate rock or a phosphate ore body. A higher percentage corresponds to a higher percentage of phosphate content in phosphate rock or a phosphate ore body.
(d)We have a 75% economic interest in the Miski Mayo Mine and consolidate their results. Annual operational capacity and production tonnes for Miski Mayo are presented at 100% economic interest. These amounts are presented on a wet tonne basis based on average moisture levels of 3.5% to 4.5% as it exits the drying process and is prepared for shipping. Operational capacity and production on a dry tonne basis would be 3.8 million tonnes and 4.1 million tonnes, respectively.
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Table 2.2 shows the production tonnage and grade for the potash properties for 2022, 2021 and 2020.
Table 2.2 Summary of Production - Potash Properties
(in millions of tonnes) December 31,
Facility Annualized Proven Peaking Capacity (tonnes)(a)(b)
Annual Operational Capacity (tonnes) (b)(c)(d)
2022 2021 2020
Ore Mined (tonnes) Grade % K2O(e)
Ore Mined (tonnes) Grade % K2O(e)
Ore Mined (tonnes) Grade % K2O(e)
Belle Plaine - MOP(f)
3.9 3.0 11.3 19.3 11.0 19.3 12.6 18.0
Esterhazy - MOP 6.3 6.0 13.7 24.5 13.3 23.9 15.0 24.1
Colonsay - MOP(g)
2.6 1.5 2.6 26.4 1.0 26.6 0.0 0.0
Total Canada 12.8 10.5 27.6 22.5 25.3 22.0 27.6 21.3
Carlsbad - K-Mag®(h)
0.9 0.7 3.0 6.2 3.1 6.3 3.4 5.7
Total United States 0.9 0.7 3.0 6.2 3.1 6.3 3.4 5.7
Taquari - MOP 0.7 0.5 1.5 14.3 1.8 15.1 1.8 16.6
Total Brazil 0.7 0.5 1.5 14.3 1.8 15.1 1.8 16.6
Total Potash 14.4 11.7 32.1 20.6 30.2 20.0 32.8 19.4
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(a)Represents full capacity based on 350 operating days per annum.
(b)Capacity is based on finished goods capacity, not ore mined. The annualized proven peaking capacity shown above is the capacity currently used to determine our share of Canpotex sales. Canpotex members’ respective shares of Canpotex sales are based upon the members’ respective proven peaking capacities for producing potash. When a Canpotex member expands its production capacity, the new capacity is added to that member’s proven peaking capacity based on a proving run at the maximum production level. Alternatively, after January 2017, Canpotex members may elect to rely on an independent engineering firm and approved protocols to calculate their proven peaking capacity. The annual operational capacity reported in the table above can exceed the annualized proven peaking capacity until the proving run has been completed.
(c)Annual operational capacity is the expected average long-term annual capacity considering constraints represented by the grade, quality and quantity of the reserves being mined as well as equipment performance and other operational factors.
(d)Actual production varies from annual operational capacity shown in the above table due to factors that include, among others, the level of demand for our products, the quality of the reserves, the nature of the geologic formations we are mining at any particular time, maintenance and turnaround time, accidents, mechanical failure, weather conditions, and other operating conditions, as well as the effect of recent initiatives intended to improve operational excellence.
(e)Grade % K2O is a traditional reference to the percentage (by weight) of potassium oxide contained in the ore. A higher percentage corresponds to a higher percentage of potassium oxide in the ore.
(f)Equivalent to hoisted tonnes at a conventional mine. Ore mined for Belle Plaine is a calculated value (KCl concentrate mined by solution divided by the estimated global grade of the deposit). The calculation is based on actual KCl tonnes mined for January 1, 2022 through October 31, 2022 and estimated KCl tonnes mined for November 1, 2022 through December 31, 2022).
(g)We have the ability to reach an annual operating capacity of 2.1 million tonnes over time at Colonsay by increasing our staffing levels and investment in mine development activities.
(h)K-Mag® is a specialty product that we produce at our Carlsbad facility.
Overview
Overviews for Phosphates, Potash and Mosaic Fertilizantes are shown in Table 2.3, Table 2.4, and Table 2.5 below. All properties are operated by Mosaic. All properties listed below are production stage, except Araxá/Patrocinio. Araxá/Patrocinio is an operating mine that is an exploration stage mine because Mosaic is extracting minerals from this mine without having determined there are mineral reserves under S-K 1300. Information concerning our material properties is located in this Item 2 under the headings “Florida Phosphates,” “Esterhazy,” “Belle Plaine” and “Tapira”.
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Table 2.3: Phosphates Overview
Florida Phosphates
See Florida Phosphates Individual Property Disclosure below.
Peru - Compañía Minera Miski Mayo S.R.L. (“Miski Mayo”)
Location Sechura Province in the Piura Region, Peru
Type and amount of ownership interests 75% owned by Compañía Minera Miski Mayo S.R.L., a wholly-owned indirect subsidiary of Mosaic.
Titles, mineral rights, leases or options and acreage Miski Mayo is the holder of 20 non-metallics mining concessions (76,000 hectares).
Key permit conditions Permit conditions are dictated by operating licenses, which are maintained and renewed on a regular basis. As of December 31, 2022, all environmental licenses were either still valid or were being renewed pursuant to applications with the Peruvian Environmental Agency within the legal deadlines.
In general, environmental commitments are being met; however, there are environmental requirements and commitments related to the expansion of Miski Mayo Line 3 of the Second Amendment of the EIA (2015) that have to be verified and implemented.
Miski Mayo’s environmental controls are related to monitoring the quality of wastewater, surface water, groundwater and air, as well as waste management. Additional environmental controls are in place for air emissions, air quality and noise.
Tailings storage facilities and other impoundment’s stability are monitored through specified routine internal and third party inspections.
Mine types and mineralization styles Miski Mayo is a surface mine. The phosphate deposits of Peru are located within the shallow north-trending Sechura Basin, in the Piura region, hosting successive inter-layered marine sediments of phosphate. We extract phosphate ore from Miski Mayo using excavators. The ore is then transported by truck for beneficiation in a plant that we own. The beneficiated concentrate is then shipped to North America for use in our own production or sold to third parties.
Processing plants and other facilities Beneficiation plant
Table 2.4: North America Potash Overview
Belle Plaine Potash Facility (“Belle Plaine Facility”)
See Belle Plaine Individual Property Disclosure below.
Esterhazy Potash Facility (“Esterhazy Facility”)
See Esterhazy Individual Property Disclosure below.
Colonsay Potash Facility (“Colonsay Facility”)
Location Saskatchewan, Canada
Type and amount of ownership interests 100% owned by Mosaic Potash Colonsay ULC, a wholly-owned, indirect subsidiary of Mosaic.
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Titles, mineral rights, leases or options and acreage We lease approximately 118,378 acres of mineral rights for the Colonsay Facility from the Province of Saskatchewan (the “Crown”) under Subsurface Mineral Lease KL 108. The lease term is for a period of 21 years, with renewals at our option for additional 21-year lease periods.
In addition, we own or lease approximately 14,451 acres of mineral rights within the Colonsay area. All mineral properties owned or leased by Mosaic are for the “subsurface mineral” commodity as defined in The Subsurface Mineral Tenure Regulations (Saskatchewan).
We own approximately 5,972 acres of surface rights in the Colonsay area. All infrastructure including the processing plant and tailings management areas ( “TMAs” or “TMA”) are located on our owned land.
Key permit conditions A water rights license issued by the Saskatchewan Water Security Agency is in place and expires in 2032. The license is associated with the allocation of surface water rights for the site. An Approval to Operate Pollutant Control Facilities, issued by the Saskatchewan Ministry of Environment, is also in place and expires in July 2028. It is expected to be renewed at or before expiration.
There are no other significant encumbrances, including permitting requirements (existing or anticipated in the future) associated with the Colonsay Facility. Except for the royalties, we do not anticipate any future significant encumbrances based on current known regulations and existing permitting processes. There are no outstanding violations and fines.
Mine types and mineralization styles The intracratonic Elk Point Basin is a major sedimentary geological feature in western Canada and the northwest U.S. It contains one of the world’s largest stratabound potash resources that represents almost 25% of the global potash production. The Prairie Evaporite hosts rich deposits of evaporite minerals including NaCl, KCl and locally, carnallite that occur in three potash deposits: the Esterhazy, Belle Plaine and Patience Lake members.
The Colonsay deposit includes two potash-bearing members within its local stratigraphy; the Patience Lake Member and the Belle Plaine Member. Mining at Colonsay is conducted within the upper portion of the Patience Lake Member using a room and pillar mining method.
The Colonsay Facility uses an underground room and pillar mining method to extract potash. After being transported along a network of conveyor systems to the shaft, it is hoisted to the surface for onsite processing.
Processing plants and other facilities Mill facility, beneficiation plant
Carlsbad Potash Facility (“Carlsbad Facility”)
Location New Mexico, U.S.
Type and amount of ownership interests 100% owned by Mosaic Potash Carlsbad Inc., a wholly-owned, indirect subsidiary of Mosaic.
Titles, mineral rights, leases or options and acreage The property consists of 89% federally owned and 11% state owned land, and 40 acres of privately owned mineral rights that Mosaic leases. We lease approximately 64,267 acres of mineral rights from the U.S. Department of Interior Bureau of Land Management (the “BLM”). These lease terms are for a period of 20 years and are reviewed and renewed at their end of term.
Surface rights are subject to separate ownership and title from subsurface mineral rights.
We own 8,370 acres of surface rights. All infrastructure, including the processing plant, TMA, cluster sites, and pipeline rights of way, are located on Mosaic-owned land.
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Key permit conditions Primary environmental resource areas identified include groundwater quality and shorebird habitat. Environmental monitoring for effluents, air and surface/groundwater is in place.
Currently, 11 permits or approvals are active for the property. We are in compliance with all such permits or approvals. One of the 11, groundwater discharge permit (DP-1399) issued by the New Mexico Environmental Department (“NMED”), is currently being renewed. The discharge permit governs operation of the TMA. A tailings management and inspection plan is in place and active. The permit includes closure and post-closure requirements and financial assurance requirements.
A mining and reclamation plan has been developed and approved by the BLM. This plan includes standards for operation and closure of the mine that comply with federal and state of New Mexico environmental regulations. Current and final mine closure plans and reclamation cost estimates are completed and the closure plans have been approved by NMED and the BLM.
There are no significant environmental permitting encumbrances (existing or anticipated in the future) associated with the Carlsbad Facility. We do not anticipate any future encumbrances based on current known regulations and existing permitting processes. There are no outstanding violations and fines.
Mine types and mineralization styles The Carlsbad potash district is located within the northern New Mexico portion of the Delaware Basin. The Delaware Basin is the western subdivision of the greater Permian Basin, one of the deepest intracratonic basins in North America.
Potash mineralization at Carlsbad occurs in the Ochoan Epoch (Upper Permian Age) Salado Formation. The Salado Formation, up to a maximum of 2,200 feet (671 m) ft. thick, is an evaporite sequence dominated by 650 to 1,300 feet (198 to 396 m) of halite and muddy halite. It hosts 12 ore zones, 11 in the middle or McNutt Member and the 12th in the Upper Member. The area underlain by the 12 ore zones is about 1,900 sq. miles (4,920 sq. km). The 400 foot (122 m) thick McNutt Member is at a depth of 300 to 1,500 feet (91 to 457 m) below the surface.
The Carlsbad Facility utilizes an underground room-and-pillar mining method.
Pillars are cut in a manner that creates a panel; panel sizes can be changed based on grade, ground conditions and lease or oil and gas boundaries. The mine currently has five mine panels that consist of nine to 11 rooms. Drum-style continuous miners are utilized for mining. As the continuous miner advances, ore is fed off a boom located at the back of the miner into battery-powered ore haulage units. These units transport the ore through the open mine workings and dump it onto an extensive belt system that conveys the ore to the surface for milling.
Processing plants and other facilities Langbeinite (K-Mag®) refinery and a granulation plant
Table 2.5: Mosaic Fertilizantes Overview
Complexo Mineroquímic de Araxá (“Araxá”) / Complexo de Mineração de Patrocínio (“Patrocínio”)
Location Near Araxá / Patrocínio, Minas Gerais, Brazil
Type and amount of ownership interests 100% owned by Mosaic Fertilizantes P&K S.A., a wholly-owned indirect subsidiary of Mosaic.
Titles, mineral rights, leases or options and acreage Mining rights in Brazil are governed by the Mining Code, Decree 227, dated February 27, 1967, and further regulation enacted by Agência Nacional de Mineração (the “ANM”). All subsoil situated within Brazilian territory is deemed state property, with the mining activities subject to specific permits granted by the ANM.
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Key permit conditions Mosaic currently holds a total of four mining permits within the Araxá area (2,769 hectares) and four mining permits and one exploration permit within the Patrocínio area (3,478 hectares). Permit conditions are dictated by operating licenses, which are maintained and renewed on a regular basis. As of December 31, 2022, all environmental licenses were valid or were being renewed pursuant to applications filed with the Brazilian Environmental Agency.
There are action plans in progress to comply with the environmental conditions of the permits that are not met yet within the applicable regulations. Araxá and Patrocínio’s environmental controls are related to monitoring the quality of wastewater, surface water, groundwater and air, as well as waste management. Additional environmental controls are in place for air emissions, air quality and noise.
Tailings storage facilities and other impoundment’s stability are monitored through a continuous monitoring program, as well as routine inspections.
Mine types and mineralization styles The Araxá and Patrocínio phosphate deposits are part of a series of Late-Cretaceous, carbonatite-bearing alkaline ultramafic plutonic complexes belong to the Alto Paranaiba Igneous Province.
The tropical weather regime prevailing in the region and the inward drainage patterns developed from the weather-resistant quartzite margins of the dome structures resulted in the development of an extremely thick soil cover in most of the complexes. The extreme weathering was responsible for the residual concentration of apatite.
The phosphate ore is extracted through surface mining by limited drilling and blasting, loaded into trucks and transported to the beneficiation plants. Patrocinio does not have its own beneficiation plant, so the ore is transported by rail to Araxá for processing.
Processing plants and other facilities Two beneficiation plants at Araxá
Complexo Mineroquímico de Cajati (“Cajati”)
Location Near Cajati, São Paulo, Brazil
Type and amount of ownership interests 100% owned by Mosaic Fertilizantes P&K S.A., a wholly-owned indirect subsidiary of Mosaic.
Titles, mineral rights, leases or options and acreage Mining rights in Brazil are governed by the Mining Code, Decree 227, dated February 27, 1967, and further regulation enacted by the ANM. All subsoil situated within Brazilian territory is deemed state property, with the mining activities subject to specific permits granted by the ANM.
Key permit conditions Mosaic currently holds a total of eight mining permits within the Cajati area (5,183 hectares). Permit conditions are dictated by operating licenses, which are maintained and renewed on a regular basis. As of December 31, 2022, all environmental licenses were still valid or were being renewed pursuant to applications filed with the Brazilian Environmental Agency.
There are action plans in progress to comply with the environmental conditions of the permits that are not met yet within the environmental permits. Cajati’s environmental controls are related to monitoring the quality of wastewater, surface and groundwater and air, as well as waste management. Additional environmental controls are in place for air emissions, air quality and noise.
Tailings storage facilities and other impoundment’s stability are strictly monitored through a continuous monitoring program as well as routine inspections.
Mine types and mineralization styles The primary alkaline intrusive complex of interest for Cajati is the Jacupiranga Ultramafic-Carbonatitic Mesozoic Complex. The economically exploitable portion of the Jacupiranga Alkaline Complex is focused on phosphate mineralization within the carbonatite domain of the complex.
The phosphate ore is extracted through surface mining by drilling and blasting, loaded into trucks and transported to the beneficiation plant onsite at Cajati.
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Processing plants and other facilities Beneficiation plant
Complexo Mineração de Catalão (“CMC”)
Location Near Catalão, Minas Gerais (and Goias), Brazil
Type and amount of ownership interests 100% owned by Mosaic Fertilizantes P&K S.A., a wholly-owned indirect subsidiary of Mosaic.
Titles, mineral rights, leases or options and acreage Mining rights in Brazil are governed by the Mining Code, Decree 227, dated February 27, 1967, and further regulation enacted by the ANM. All subsoil situated within Brazilian territory is deemed state property, with the mining activities subject to specific permits granted by the ANM.
Key permit conditions Mosaic currently holds a total of 18 permits within the CMC area (2,131 hectares). Permit conditions are dictated by operating licenses, which are maintained and renewed on a regular basis. As of December 31, 2022, all environmental licenses were either valid or were being renewed pursuant to applications filed with the Brazilian Environmental Agency.
There are action plans in progress to comply with the environmental conditions that are not met yet within the environmental permits. CMC’s environmental controls are related to monitoring the quality of wastewater, surface and groundwater and air, as well as waste management. Additional environmental controls are in place for air emissions, air quality and noise.
Tailings storage facilities and other impoundment’s stability are monitored through a continuous monitoring program as well as routine inspections.
Mine types and mineralization styles The CMC phosphate deposit is part of a series of Late-Cretaceous, carbonatite-bearing alkaline ultramafic plutonic complexes belong to the Alto Paranaiba Igneous Province.
The tropical weather regime prevailing in the region and the inward drainage patterns developed from the weather-resistant quartzite margins of the dome structures resulted in the development of an extremely thick soil cover in most of the complexes. The extreme weathering process was responsible for the residual concentration of apatite.
The phosphate ore is extracted through surface mining by limited drilling and blasting, loaded into trucks and transported to the beneficiation plant onsite at CMC.
Processing plants and other facilities Beneficiation plant
Complexo Mineração de Tapira (“Tapira”)
See the Tapira Individual Property Disclosure below.
Complexo Mineroquímico de Taquari-Vassouras (“Taquari”)
Location Near Rosario de Catete, Sergipe, Brazil
Type and amount of ownership interests 100% owned by Mosaic Potássio Mineração Ltda, a wholly-owned indirect subsidiary of Mosaic.
Titles, mineral rights, leases or options and acreage Mining rights in Brazil are governed by the Mining Code, Decree 227, dated February 27, 1967, and further regulation enacted by the ANM. All subsoil situated within Brazilian territory is deemed state property, with the mining activities subject to specific permits granted by the ANM.
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Key permit conditions Mosaic currently holds one mining permit within the Taquari area (92,498 hectares). Permit conditions are dictated by operating licenses, which are maintained and renewed on a regular basis. As of December 31, 2022, all environmental licenses were either valid or being renewed pursuant to applications filed with the Brazilian Environmental Agency within the legal deadlines. Licenses are managed through national and state databases.
There are action plans in progress to comply with the environmental conditions that are not met yet within the environmental permits. Taquari’s environmental controls are related to monitoring the quality of wastewater, surface water, groundwater and air, as well as waste management. Additional environmental controls are in place for air emissions, air quality and noise.
The brine pipeline and other impoundment’s stability are monitored through a monitoring program as well as routine inspections.
Mine types and mineralization styles The deposit is in the Taquari-Vassouras sub-basin and is a bedded evaporite where sylvinite is mined in an underground room and pillar mine at depths of 500-700m below surface using continuous miners. The beneficiation process operation begins at the run-of-mine stockpile. The material is conveyed to the processing circuit where it is divided into seven major units: crushing, concentration, dissolution, drying, compaction, storage and shipping.
Processing plants and other facilities Beneficiation plant
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Mineral Resource and Mineral Reserve Estimates
Table 2.6 shows the Mineral Resource tonnage and grade for all properties as of December 31, 2022.
Table 2.6 Summary of Mineral Resources as of December 31, 2022(a)
(in millions of tonnes)
Commodity/Geography/Mine Property Name Measured Mineral
Resources Indicated Mineral Resources Measured + Indicated Mineral Resources Inferred Mineral
Resources
tonnes Grade tonnes Grade tonnes Grade tonnes Grade
Phosphate (Grade: P2O5 )(b)
United States
Florida(c)
102.0 30.0 415.0 30.1 517.0 30.0 83.0 30.0
Peru
Miski Mayo(d)
157.7 16.7 139.0 16.3 296.7 16.5 27.7 16.0
Brazil
Araxá/Patrocínio(e)(f)
132.1 12.1 458.8 13.0 590.9 12.8 169.4 13.6
Cajati(e)(g)
28.3 5.3 33.8 5.0 62.1 5.2 5.2 4.8
Catalão(e)(h)
53.3 10.4 97.6 10.5 150.9 10.5 60.1 9.4
Tapira(e)(i)
62.8 8.0 67.0 7.8 129.8 7.9 112.8 8.6
Total Phosphate 536.2 16.0 1,211.2 18.4 1,747.4 17.7 458.2 14.8
Potash (Grade: K2O)(j)
Canada
Belle Plaine(k)
- - - - - - 4,647.0 19.0
Esterhazy(l)
255.0 23.3 2,092.0 22.8 2,347.0 22.9
Colonsay(l)
- - - - - - 977.0 29.0
United States
Carlsbad(m)
- - - - - - 39.0 6.0
Brazil
Taquari(n)
- - 6.8 23.6 6.8 23.6 58.0 22.9
Total Potash 255.0 23.3 2,098.8 22.8 2,353.8 22.8 5,721.0 20.7
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(a)Mineral resources are reported exclusive of mineral reserves, and except as otherwise noted, are stated in-situ. Mineral resources are not mineral reserves and do not meet the threshold for mineral reserve modifying factors, such as estimated economic viability, that would allow for conversion to mineral reserves. There is no certainty that any part of the mineral resources estimated will be converted into mineral reserves.
(b)The percentage of P2O5 represents a measure of the phosphate content in phosphate rock or a phosphate ore body. A higher percentage corresponds to a higher percentage of phosphate content in phosphate rock or a phosphate ore body. Brazilian grades, except for Cajati, are P2O5ap, which represents the P2O5 associated with apatite and was calculated by the evaluation of the CaO / P2O5 ratio. Where CaO / P2O5 ratio was greater than or equal to 1.34, P2O5ap was equal to the total of P2O5; where the CaO / P2O5 ratio was less than 1.35, P2O5ap was equal to the CaO / 1.35 ratio.
(c)Mineral resource tonnages and grade are reported as a beneficiation plant product (phosphate rock) tonnage and P2O5 grade. The cut-offs used to estimate mineral resources include: minimum beneficiation plant concentrate BPL (27.45% P2O5), minimum pebble BPL (18.30% P2O5, except 22.88% P2O5 for Desoto and Pioneer), maximum pebble magnesium oxide concentration and a maximum clay content cut-off for a logged matrix layer and the composite matrix volume. A Life of Mine (“LOM”) commodity price of US$68.0/tonne of phosphate rock was used to assess prospects for economic extraction but is not used for cut-off purposes.
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(d)Mineral resources are presented on the basis of our 75% interest. Cut-off grade of > 8% P2O5 was applied for mineral resources. A breakeven pit shell was developed with costs, grade requirements and a sales price of US $57.9/tonne of phosphate concentrate (2022 price evaluation) to develop the mineral resource pit shell.
(e)Measured, indicated and inferred blocks were included in mineral resource estimates if they were inside mining concessions and exploration permits with a final report approved by the ANM, but exclusive of physical structures. For example, depending on the site, a physical structure may consist of a beneficiation plant, crusher or waste pile.
(f)Araxá Oxidized Cut-off grade: Mass Recovery (rend_t) > 0, P2O5 ≥ 4.78, Fe2O3 ≥ 1.34, SiO2 ≥ 0.05, BaO ≤ 18.83, CaO to P2O5 ratio 0.7 to 1.40. Araxá Micaceous Cut-off grade: Cut-off grade for Micaceous: Mass Recovery (rend_t) > 0, P2O5 ≥ 3.11, Al2O3 ≤ 13.15. For Araxá, a revenue factor of 1.0 with sales price in Brazilian real ($R) of R$1,798.21 per tonne of phosphate concentrate (2019 price evaluation) was used to develop mineral resource pit shell. Patrocínio BEB-OXI Cut-off grade: P2O5 ≥ 3.5, Fe2O3 ≤ 53.0. Patrocínio CBN-OXI Cut-off grade: P2O5 ≥ 4.0, SiO2 ≥ 0.2. Patrocínio BEB-MIC Cut-off grade: P2O5 ≥ 3.4, Fe2O3 < 50.0, SiO2 < 57.5, MgO < 17.0, TiO2 < 27.0. Patrocinio FET Cut-off grade: P2O5 > 0.0. Patrocínio RSI Cut-off grade: P2O5 ≥ 3.0, CaO to P2O5 ratio < 2.6. For Patrocínio, a revenue factor of 1.0 with a sales price of R$1,635.29 per tonne of phosphate concentrate (2020 LOM price evaluation) was used to develop mineral resource pit shell.
(g)Cut-off grade of > 3% P2O5 and < 11% SiO2 was applied for mineral resources. A revenue factor of 1.0 with sales price of R$1,944.5 per tonne of phosphate concentrate (2020 LOM price evaluation) was used to develop mineral resource pit shell.
(h)Cut-off grade of P2O5ap ≥ 5.2% and 0.8 ≤ RCP ≤ 1.6 and MgO < 12% was applied to mineral resources. A revenue factor of 1.0 with a constant sales price of R$1,537.92 per tonne of phosphate concentrate (2020 LOM price evaluation) was used to develop mineral resource pit shell.
(i)Cut-off grade of P2O5ap ≥ 5.0% and 0.9 ≤ RCP ≤ 3.0 was applied to mineral resources. A revenue factor of 1.0 with a sales price of R$1,492.92 per tonne of phosphate concentrate (2020 LOM price evaluation) was used to develop the mineral resource pit shell.
(j)%K2O refers to the total %K2O of the samples.
(k)No cut-off grade is used to estimate mineral resources as the solution mining method used at the Belle Plaine Facility is not selective. At no point in the cavern development and mining process can a decision be made to mine or not mine the potash mineralization that is in contact with the mining solution. The mining solution dissolves the potash, regardless of its grade, to make a concentrate that is pumped to surface from the mining caverns for processing.
(l)No cut-off grade or value based on commodity price is used to estimate mineral resources as the mining method used at Colonsay or Esterhazy is not grade selective. The potash mineralization is mined on one level by continuous miners following the well-defined and continuous beds of mineralization with relatively consistent grades. The following KCl commodity prices were used to assess prospects for economic extraction for the mineral resources but are not used for cut-off purposes: US $103.4/tonne for Esterhazy, US $108.7/tonne for Belle Plaine, and US $130.7/tonne for Colonsay, A US$/CAD$ exchange rate of 1.30 was used to assess prospects for economic extraction for the mineral resources but was not used for cut-off purposes.
(m)A 4% K2O cut-off grade with less than 2% kieserite is used to estimate mineral resources. This is consistent with the definition of mineable potash established by the U.S. Geological Survey. A US $195.6/tonne price was used to assess economic viability for the mineral resources, but was not used for cut-off purposes.
(n)Cut-off grade of > 20% KCl, a minimum Sylvinite thickness of 1.8m, and a minimum Sylvinite percentage per block of 50% was applied for mineral resources.
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Table 2.7 shows the Mineral Reserve tonnage and grade for all properties as of December 31, 2022.
Table 2.7: Summary of Mineral Reserves as of December 31, 2022(a)
(in millions of tonnes)
Commodity/Geography/Mine Property Name Proven Mineral Reserves Probable Mineral Reserves Total Mineral Reserves
tonnes Grade tonnes Grade tonnes Grade
Phosphate (Grade: P2O5)(b)
United States
Florida(c)
56.0 28.0 70.0 27.1 126.0 27.5
Peru
Miski Mayo(d)
109.8 16.2 54.1 15.1 164.0 15.9
Brazil
Cajati(e)
39.6 5.2 29.6 5.0 69.2 5.1
Catalão(f)
61.8 10.8 16.3 10.6 78.1 10.8
Tapira(g)
182.7 9.4 274.6 9.1 457.3 9.2
Total Phosphate 449.9 13.2 444.6 12.4 894.5 12.8
Potash (Grade: K2O)
Canada
Belle Plaine(h)
272.0 19.3 388.0 19.3 660.0 19.3
Esterhazy(i)
110.0 23.3 433.0 20.9 543.0 21.3
Colonsay(i)
101.0 25.3 163.0 27.2 264.0 26.5
United States
Carlsbad(j)
172.9 6.5 0.0 0.0 172.9 6.5
Brazil
Taquari(k)
0.0 0.0 26.9 14.7 26.9 14.7
Total Potash 655.9 17.7 1,010.9 21.1 1,666.8 19.7
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(a)A mineral reserve is the economically mineable part of a measured or indicated mineral resource, which includes diluting materials and allowances for losses that may occur when the material is mined or extracted. Reserves are measured as Run of Mine (“ROM”) unless otherwise noted.
(b)Brazil grades except for Cajati are P2O5ap, which represents the P2O5 associated with apatite and was calculated by the evaluation of the CaO / P2O5 ratio. Where CaO / P2O5 ratio was greater than or equal to 1.34, P2O5ap was equal to the total of P2O5; where the CaO / P2O5 ratio was less than 1.35, P2O5ap was equal to the CaO / 1.35 ratio.
(c)Mineral reserve tonnages and grade are reported as a beneficiation plant product (phosphate rock) tonnage and P2O5 grade. A LOM commodity price of US$68.0/tonne of phosphate rock was used to assess prospects for economic extraction but is not used for cut-off purposes. Cut-off based on productivity factors per site have been applied to estimate mineral reserves. Recoverable Finished Product tonnes vs. Matrix Volume Mined ranges from 9.4-9.9%. Recoverable Finished Product tonnes vs. Total Volume Mined is 2.2%.
(d)Mineral reserves are presented on the basis of our 75% interest. The reference point for cut-off grade and pit optimization analysis is tonnes of concentrate at a price of US$57.9/tonne concentrate (2022 LOM price evaluation). We applied a cut-off grade of > 8% P2O5 mineral reserves. Additionally, we used a phosphate concentrate grade limitation of a minimum P2O5 concentrate grade of 29.5% in the LOM plan.
(e)The reference point for cut-off grade and pit optimization analysis is tonnes of concentrate at a price of R$1,944.47/tonne concentrate (2020 price evaluation). Cut-off grade of > 3% P2O5 and < 11% SiO2 was applied to mineral reserves. Mineral reserves were proven to be economic based on an internal transfer price of R$754/tonne of phosphate rock (2021 LOM price evaluation) that was derived in the discounted cash flow and compared to the gross margin available.
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(f)The reference point for cut-off grade and pit optimization analysis is tonnes of concentrate at a price of R$1,537.92/tonne concentrate (2020 price evaluation). Cut-off grade of P2O5ap ≥ 5.2% and 0.8 ≤ RCP ≤ 1.6 and MgO < 12% was applied to mineral reserves. Mineral reserves were proven to be economic based on internal transfer price of R$357/tonne of phosphate rock (2021 LOM price evaluation) that was derived in the discounted cash flow and compared to the gross margin available.
(g)The reference point for cut-off grade and pit optimization analysis is tonnes of concentrate at a price of R$1,492.92/tonne concentrate (2020 price evaluation). Cut-off grade of P2O5ap ≥ 5.0% and 0.9 ≤ RCP ≤ 3.0 was applied to mineral reserves. Mineral reserves were proven to be economic based on internal transfer price of R$336/tonne of phosphate rock (2021 LOM price evaluation) that was derived in the discounted cash flow and compared to the gross margin available.
(h)No cut-off grade is used to estimate mineral reserves as the solution mining method used at the Belle Plaine Facility is not selective. At no point in the cavern development and mining process can a decision be made to mine or not mine the potash mineralization that is in contact with the mining solution. The mining solution dissolves the potash, regardless of its grade, to make a concentrate that is pumped to surface from the mining cavities for processing. Mine designs based on a solution mining method and design criteria are used to constrain mineral reserves within mineable shapes. The following KCl commodity prices were used to assess economic viability for the mineral reserves, but were not used for cut-off purposes, 2022-$271/tonne, 2023-$231/tonne, 2024-$219/tonne, 2025-$185/tonne, 2026-$188/tonne and for the LOM $219/tonne. A US$/CAD$ exchange rate of 1.31 was used to assess economic viability for the mineral reserves but was not used for cut-off purposes.
(i)No cut-off grade or value based on commodity price is used to estimate mineral resources as the mining method used at Colonsay or Esterhazy is not grade selective. The potash mineralization is mined on one level by continuous miners following the well-defined and continuous beds of mineralization with relatively consistent grades. The following KCl commodity prices were used to assess prospects for economic extraction for the mineral resources but are not used for cut-off purposes: US $103.4/tonne for Esterhazy, US $108.7/tonne for Belle Plaine, and US $130.7/tonne for Colonsay, A US$/CAD$ exchange rate of 1.30 was used to assess prospects for economic extraction for the mineral resources but was not used for cut-off purposes.
(j)A 4% K2O cut-off grade with less than 2% kieserite is used to estimate mineral resources. This is consistent with the definition of mineable potash established by the U.S. Geological Survey. A US $195.6/tonne price was used to assess economic viability for the mineral resources, but was not used for cut-off purposes.
(k)A tonnage reduction of 20% has been applied to the probable mineral reserves to account for geological uncertainty. A KCl grade downgrade of -10% was applied to the probable mineral reserves in order to adjust in-situ grades to ROM grades. A mean density of 2.10 g/cc was applied to all mineral reserve volumes to convert to tonnages. Cut-off grade of ≥ 20% KCl and a minimum Sylvinite thickness of 1.8m was applied for mineral reserves. The reference point for the discounted cash flow utilized K2O commodity prices (US$) of $418/tonne for 2022, $369/tonne for 2023, $353/tonne for 2024, $324/tonne for 2025, $330/tonne for 2026 and $359/tonne for the remaining LOM. Mineral reserves were proven to be economic based on a positive discounted cash flow.
FLORIDA PHOSPHATES
Our three phosphate production stage mining facilities (South Fort Meade, Four Corners and Wingate) and three exploration properties (DeSoto, Pioneer and South Pasture) in Florida consist of over 210,000 acres of property in central Florida (Table 2.8 and Figure 2.3). We idled the mining and beneficiation activities at South Pasture. The facilities and properties are in DeSoto, Hardee, Hillsborough, Manatee and Polk counties. Even though we continue to add real property to one or more of these locations, most of the property currently being mined or planned for future mining have been in industry ownership for over 50 years. The mining facilities and exploration properties are owned by or have controlling interest granted to Mosaic Fertilizer LLC, South Ft. Meade Land Management or South Ft. Meade Land Partnership, L.P. (“SFMLP”), each a subsidiary of Mosaic.
We either own or have a controlling interest in the mineral rights to the current and future facilities. Mineral and surface rights are joined at the Four Corners, Wingate, Pioneer and South Pasture properties. Portions of the DeSoto property and South Fort Meade facility have the surface and mineral interests severed.
The net book value for our Florida phosphate mining facilities and exploration properties is $1.3 billion as of December 31, 2022.
Table 2.9 lists the land status and acreages for the facilities and properties.
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Table 2.8: Property Locations
Property Location
South Fort Meade Facility Straddles the county line road beginning 1.3 miles (2.1 km) east of the City of Bowling Green and continuing another five miles (8 km). Located at 27.667195 N, 81.761349 W.
Four Corners Facility Located in southeast Hillsborough County, northeast Manatee County and southwest Polk County. Located at 27.646144 N, 82.087305 W.
Wingate Facility Most of the property associated with this mine is west of Duette Road and north of State Road 64. There is a portion of this property that exists on the east side of Duette Road that begins approximately three miles (2 km) north of State Road 64. Located at 27.504452 N, 82.132221 W.
DeSoto Property This exploration property is bisected by State Road 70 and State Road 72 running east and west and the county line running north and south. A portion of the DeSoto property is owned fee simple and the mining interests on the remaining portion is secured by mineral rights. Located at 27.263018 N, 82.035208 W.
Pioneer Property This exploration property is bisected by County Road 663 running north and south. Several local roads (Murphy, Bridges, Bennett and Post Plant) cross this parcel. Located at 27.439391 N, 81.940020 W.
South Pasture Property The property is situated along a 10 mile stretch of State Road 64 and a seven mile stretch along Country Road 663. All parcels are bisected by County Road 663, State Road 62, State Road 64 and several local roads. The mining and beneficiation activities at this location have been idled. Located at 27.585787 N, 81.942888 W.
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Figure 2.3: Location Plan
The table below includes only land holdings associated with our mining properties.
Table 2.9: Property Status and Acreages
Status (Acres)
Florida Phosphate Property Status and Acreages
Fee Simple Mining Agreement Mineral Rights (b)
Lease Total
South Fort Meade Facility 15,333 25,528 (a)
92 571 41,524
Four Corners Facility 54,671 54,671
Wingate Facility 8,761 8,761
DeSoto Property 24,113 8 18,943 43,064
Pioneer Property 26,017 26,017
South Pasture Property 38,723 38,723
Total 167,618 25,536 19,035 571 212,760
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(a) The mining agreement relates to the SFMLP which is 100% controlled by Mosaic or its subsidiaries.
(b) All acres include surface rights with the exception of the DeSoto mineral rights.
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Governmental permits and approvals for mining are obtained from federal, state and county authorities, including the Environmental Resource Permit (“ERP”) issued by FDEP and permits required by Section 404 of the federal Clean Water Act. In connection with these permits, we are required to develop a reclamation plan with respect to these areas. The ERP is associated with a FDEP-approved reclamation plan that requires “acre for acre and type for type” reclamation to reclaim mined areas. Mitigation may also be required by ERP conditions which may also require conservation easements to provide permanent protection.
The integrated water use permit (“IWUP”) issued by the Southwest Florida Water Management District (“SWFWMD”) in 2012 authorizes the withdrawal of groundwater from underground aquifers through permitted wells to provide potable and production-water supplies in support of mining and other operations. The IWUP addresses all of our active mining operations. A separate water use permit (“WUP”) was issued by SWFWMD for the South Pasture property in 2017. The IWUP and the South Pasture WUP also regulate mine dewatering to avoid adverse impacts to wetlands and offsite properties. Both the IWUP and the WUP are 20 year permits expiring in 2032 and 2037, respectively.
Pre-mining development follows the issuance of regulatory permits. This involves ditch and berm construction for stormwater control, groundwater draw down mitigation where applicable, land clearing, installation of infrastructure and pre-mining dewatering (only for dragline mining).
There are no significant environmental permitting encumbrances, existing or anticipated, associated with the mining facilities and exploration properties. We do not anticipate any future encumbrances based on current known regulations and existing permitting processes. There are no material outstanding violations and fines.
Existing Infrastructure
The three mining facilities are in rural central Florida located southeast of Tampa in Hardee, Hillsborough, Manatee and Polk counties. The sites are located in agricultural zones with associated population centers and easy access to multiple transportation hubs in central Florida. The three exploration properties are located south of the mining facilities. Each will utilize the same water, electrical, railway, and road networks as the active mines.
The mining facilities at South Fort Meade, Four Corners, Wingate and South Pasture commenced operations between 1981 and 1995, as noted below under “History and Exploration”. The phosphate mines have the infrastructure to meet our current production plans and long-range production goals. The current infrastructure includes major roads and highway access, railway support from CSX Transportation and electricity supplied by Duke Energy, TECO, PRECO, Florida Power and Mosaic cogeneration in associated distribution areas. Water supply is from Mosaic-owned deep wells and recycle sources. Current clay and tailings management areas footprints are expected to meet present demands, with additional capacity planned to meet the maximum volume and deposition rates from the LOM plan, which covers the period between 2022 and 2035. An integrated operations center remotely controls certain functions at our Florida phosphate mines.
Additional infrastructure may be added to increase production reliability or flexibility. The assets currently in place are maintained through a workflow process that focuses on proactive inspections and preventative maintenance, while trying to minimize reactive maintenance. Except for South Pasture, which is currently idled, minimal infrastructure is currently in place at the other exploration properties.
We expect the sites to continue to operate effectively during the LOM while continuing to maintain the built infrastructure and renewing the long-term agreements in place for the site’s water, electricity, and logistics needs.
We focus on reliability-centered maintenance with the goal of extending the life of the majority of assets to align with the LOM plan. We expect that some infrastructure will need to be replaced as it reaches end of life and has been factored into the relevant capital cost requirements.
Phosphate mining in central Florida is a mature industry. A network of suppliers, machine shops, fabricators, and specialty contractors exist to support mining, and post-mining, land reclamation activities. Many large component vendors have branch offices in either Lakeland or Tampa, Florida. Engineering, design, and technical services are readily available in Bartow, Lakeland and Tampa, Florida.
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Mining Method
Our mining operations in central Florida extract phosphate using surface mining techniques. The active mines utilize either electric walking draglines or dredges to remove overburden and mine phosphate ore (matrix). Matrix is hydraulically transported via centrifugal pumping systems to the beneficiation plant.
Pre-mining development follows the issuance of regulatory permits. This involves ditch and berm construction for stormwater control, groundwater draw down mitigation where applicable, land clearing, installation of infrastructure and pre-mining dewatering (only for dragline mining).
Development of the mine plan is based on several factors, including geological data, equipment, property boundaries, geotechnical considerations, clay impoundment, reclamation schedule, production (volume and quality) demands, permits (local, state and federal) and third-party agreements, such as agreements with local community groups, neighboring properties or NGO’s which do not materially impair the mine plan. Production is monitored through dragline/dredge monitoring systems, mass-flow instrumentation on slurry pumping systems and pit surveys. In addition to draglines and dredges, heavy mobile equipment is used to support mining activities. While each mine is staffed with Mosaic personnel to handle production and maintenance, contractors are used on an as-needed basis.
Processing Recovery Method
Phosphate matrix mined at the three mining facilities is processed through onsite beneficiation plants. The principal production components of the beneficiation plants consist of a washer, sizing system and flotation plant.
Matrix at each mine is slurried for transport to the beneficiation plant. After receiving matrix, washers separate minerals into four separate material groups. These are debris, pebbles, clay, and under-sized flotation feed. The pebble is one of the final products and the under-sized flotation feed material contains recoverable phosphate rock. The washers separate >1.0 mm phosphate product and the <1.0 mm slurry of liberated clay, sand and phosphate particles. The clay is removed with hydrocyclones and pumped to clay settling areas while the >0.1 mm sand and phosphate move on to the sizing section.
The >0.1 mm sand and phosphate is separated into different size fractions using hydrosizers. An upward flow of water is injected into the hydrosizer that forces the fine particles to rise and overflow the sizer, while the coarse particles gently fall and flow out the sizer’s underflow. The segregated fine and coarse particles are then sent to the flotation plant so the phosphate can be separated from the sand.
The two-step flotation process, rougher flotation and cleaning flotation, is next utilized to separate phosphate from the sand. In the rougher flotation process, the phosphate mineral is recovered using flotation machines by adding fatty acid, oil, soda ash, and sodium silicate. To increase the recovered rougher phosphate grade, a second cleaning flotation process is used to remove the residual sand using amine.
History and Exploration
Table 2.10 lists the important historical dates and events relevant to the mining facilities and exploration properties:
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Table 2.10: History
Date Event/Activity
1881 Pebble phosphate discovered along the Peace River south of Fort Meade by Captain J. Francis LeBaron, chief engineer of a detachment of the Engineering Corps, United States Army.
1888 Phosphate rock first commercially mined along the Peace River.
1977 Farmland Industries purchased the Pioneer (eastern portion a.k.a. Hickory Creek) property.
1981 Beker Phosphate Company opened Wingate.
1983 Four Corners construction was completed. The operation was an equal partnership between IMC and W.R. Grace Corporation.
1985 Wingate was closed after Beker Phosphate Company filed for bankruptcy.
1985 Four Corners started production.
1986 IMC purchased Brewster Phosphates and closed the Lonesome Mine which would later be consolidated into Four Corners.
1986 Four Corners is idled due to market conditions.
1986 The DeSoto (also known as Pine Level) property is sold by AMAX Chemical Company to Consolidated Minerals, Incorporated.
1988 IMC gained 100% control of Four Corners.
1989 IMC restarted Four Corners.
1990 Wingate is acquired by Nu-Gulf.
1992 Wingate is reopened after a joint venture by Nu-Gulf and Royster Industries but closed later that year.
1993 IMC-Agrico is created by a joint venture between IMC and Agrico Chemical Company (a subsidiary of Freeport McMoRan).
1995 CF Industries opened and started production at South Pasture.
1995 Mobil Chemical Corporation opened and started production at South Fort Meade.
1996 Cargill Fertilizer (later Cargill Crop Nutrition) acquired South Fort Meade.
1996 DeSoto (a.k.a. Pine Level) and Ona (includes western portion of the Pioneer property) properties are sold by CMI to IMC-Agrico.
1997 IMC acquired Freeport McMoRan’s share of IMC-Agrico.
1998 Wingate is reopened.
1999 Wingate is closed.
2002 Cargill Crop Nutrition acquired the Pioneer property (eastern portion a.k.a. Hickory Creek) from Farmland-Hydro.
2004 Cargill Crop Nutrition acquired and reopened the Wingate Facility.
2004 Mosaic created out of a merger between IMC and Cargill Crop Nutrition.
2005 Wingate is shutdown.
2006 The Fort Green site is closed permanently, and the property is consolidated into Four Corners and Wingate.
2008 Wingate is reopened.
2014 Mosaic acquired CF Industries’ phosphate business in Florida, which included the South Pasture property.
2018 South Pasture Facility is idled.
2018 Ona (western portion) property is consolidated into Four Corners.
2020 South Fort Meade acquired the Eastern Reserves Phase I.
2022 South Fort Meade acquired the Eastern Reserves Phase II.
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Geology and Mineralization
The phosphate deposits of Florida are sedimentary in origin and part of a phosphate-bearing province that extends from southern Florida north along the Atlantic coast into southern Virginia. Sedimentary phosphate deposits consist of rock in which the phosphate mineral(s) occur in grains, pellets, nodules, and as phosphate replacement of calcium in the remains of animal skeletal material and excrement.
Florida has phosphate rock distributed along the entire peninsula with varying lateral extents and abundance. There are five phosphate districts recognized in Florida identified as Northern, Northeast, Hardrock, Southeast and Central. The phosphates of Florida occur in sedimentary rocks and are of secondary origin, having been redeposited either by mechanical or chemical action. During deposition, most of the carbonate platform was drowned, and deposition was widespread. The intensity of reworking by marine processes allows some deposits to remain relatively near their origins and contribute to massive deposits while others were transported and winnowed into deposits of nodules, grains and pellets.
All our phosphate deposits are located in the central Florida Phosphate District. The general description of the phosphatic deposits in central Florida consist of two geological facies. The phosphate bearing units are within the Bone Valley Member of the Peace River Formation and the Undifferentiated Member of the Peace River Formation within the South Florida Extension region of the Central District. The deposit characteristics transition from north east to the south west. The major phosphate bearing units in the north east consist of a productive Bone Valley Member with limited production in the Undifferentiated Member. The phosphate bearing units in the south west exhibit limited production in the Bone Valley Member and a productive Undifferentiated Member of the Peace River Formation.
The phosphate stratigraphy consists of 5 to 50 feet (1.5 to 15.2 m) thick, white to brown poorly graded quartz sand with varying abundance of reworked phosphate grains as waste overburden. The economic zone is 13 to 50 feet (4.0 to 15.2 m) thick, with a grade ranging from 27 to 35% P2O5. It consists of tan-gray to gray quartz sands, dark gray to dark gray-blue-green clays and silts with phosphate nodules and pellets present with phosphate grains and clasts predominate. There can be interbedded waste zones of 0 to 15 feet (0.0 to 4.6 m) thick comprised of beds of cream to green barren sandy clay, clays or dense dolomitic clays. The basal units are dark gray to black clays to phosphatic limestone rubble to beds of phosphatic limestone.
Mineral Resource and Mineral Reserve Assumptions and Modifying Factors
The key mineral resource and mineral reserve assumptions and modifying factors are listed in Table 2.11.
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Table 2.11: Key Assumptions and Modifying Factors:
Parameter Value TRS Section
Supporting Information Regional geologic studies, 56,201 drill holes and greater than 40 years of mining history. Section 7
Average total thickness of the phosphate mineralization 13 to 50 feet (4 to 15 m) Section 6
Minimum Concentrate %P2O5
0.2745 Section 11
Minimum Pebble %P2O5
18.3 to 22.9% Section 11
Maximum pebble magnesium oxide (“MgO”) cut-off volume
0.025 Section 11
Maximum Clay Content 40 to 50% Section 11
Maximum Dragline Mining depth 85 feet (26 m) Section 11
Maximum dredge mining depth 109 feet (33 m) Section 11
Production Days per Year 365 days Section 11
Mining Method Dredge and dragline mining Section 13
Production Rate Approximately 9 to 13 million tonnes per year (2022-2030). Section 13
Mineral Resource Cut-offs The cut-offs used to estimate mineral resources by site include, the minimum beneficiation plant concentrate BPL (%P2O5), minimum pebble BPL (%P2O5), maximum pebble magnesium oxide concentration and a maximum clay content cut-off for a logged matrix layer and the composite matrix volume.
Section 11
Mineral Reserve Cut-off Cut-off based on productivity factors per site have been applied to estimate mineral reserves. Section 12
Mining Dilution 13.5 to 19.4% minimum pebble volume dilution and 9.5 to 12.6% minimum concentrate volume dilution. Section 11
Mineral Resource Impurity Recovery 100% Section 11
Mineral Reserve Pebble Impurity Recovery 88 to 97% Fe2O3, 104 to 115% aluminum oxide (“Al2O3”), 94 to 100% CaO, 123 to 169% MgO
Section 12
Mineral Reserve Concentrate Impurity Recovery 86 to 96% Fe2O3, 91 to 104% Al2O3, 90 to 100% CaO, 82 to 102% MgO
Section 12
Processing Method Beneficiation plants at the facilities consisting of washer, sizing and flotation processes. Section 14
Mineral Resource Beneficiation Plant Recovery 100% Section 11
Mineral Reserves Beneficiation Plant Recovery Pebble: 87.8 to 97.2%, Concentrate: 68.5 to 79.5%
Section 12
Deleterious Elements and Impact Major elements include MgO, pyrite (FeS2) and Al2O3 affecting flotation and filtering processes.
Section 10, 11,12
Environmental Requirements, Permits etc. No significant environmental permitting encumbrances. Section 17
Geotechnical Factors (if any) No concerns. Section 13
Hydrological or hydrogeological factors (if any) Water inflow onto mining areas can impact recovery and dilution. Section 13
Commodity Price $102.72/tonne of phosphate rock. Section 16
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Mineral Resource Estimates
Mosaic’s phosphate mineral resources are reported as a beneficiation plant product (phosphate rock) tonnage and P2O5 grade, including a total primary impurities ratio (“MER”).
The geological information used to estimate the phosphate mineral resources for the mining facilities and exploration properties is based on drilling and sampling. The mineral resource estimates are completed using a proprietary software that applies specific grade, physical and impurity limits to the raw drill data of the property. These factors are used to select material that contains sufficient grade, limited impurities and is physically extractable to be included in the mineral resource estimate. The confidence and classification of the mineral resources is estimated based on the drill density of the evaluated area.
Mineral resources that are not mineral reserves have not demonstrated economic viability utilizing the criteria and assumptions required.
The methodology for estimating mineral resources consists of interpreting the available geological data to create composites of lithological units that meet the specified criteria. These composites are then mapped to determine the mineral resource boundary. The boundary is then trimmed to account for permit and mine boundary limitations. The composite data is also used to create a geologic model composed of volume, density, grade, and impurity grids created using inverse distance weighted as the interpolation method. Elevation grids are created using triangulation based on LiDAR (Light Detection and Ranging) or survey data assigned to each drill hole. A utility macro is used to adjust elevations to account for holes with no matrix that meets the mine requirements. The data from each grid is then volumetrically combined using product volumes for the specific mineral resource shape and mineral resource classification creating a block of uniform constituents. Estimation of mineralization tonnage, grade and impurities is done by applying the volume weight percent of pebble, feed, and clay for the given mineral resource shape.
Additional details regarding the estimation methodology are listed in Section 11 of the 2022 Florida Phosphate Mining TRS filed as an Exhibit to this Form 10-K.
Table 2.12 lists the total mineral resource estimates. Mineral resources are reported exclusive of the mineral reserves.
Table 2.12: Mineral Resources at the End of the Fiscal Year Ended December 31, 2022 Based on a LOM Plan Phosphate Rock Price of $68.00 per tonne(a)(b)(c)(d)(f)
(tonnes in millions)
Category Tonnes(e)
Grade %P2O5(e)
Cut-off Grade Metallurgical Recovery %
Measured 102.0 30.0 n/a 100 %
Indicated 415.0 30.1 n/a 100 %
Measured + Indicated 517.0 30.1 n/a 100 %
Inferred 83.0 30.0 n/a 100 %
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(a)Mineral resources are not mineral reserves and do not meet the threshold for mineral reserve modifying factors, such as estimated economic viability, that would allow for conversion to mineral reserves. There is no certainty that any part of the mineral resources estimated will be converted into mineral reserves.
(b)Mineral resources are reported as mineralization (matrix) tonnage, grade and impurities after beneficiation.
(c)Mineral resources assume dragline mining at all sites except Wingate mine where dredging is assumed.
(d)Mineral resources amenable to a dragline mining method are contained within a conceptual mine pit design using the same technical parameters as used for mineral reserves.
(e)The cut-offs used to estimate mineral resources include: minimum beneficiation plant concentrate BPL (27.45%P2O5), minimum pebble BPL (18.30%P2O5, except 22.88%P2O5 for DeSoto and Pioneer), maximum pebble magnesium oxide concentration and a maximum clay content cut-off for a logged matrix layer, and the composite matrix volume.
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(f)A LOM commodity price of $68.00 per tonne of phosphate rock was used to assess prospects for economic extraction but is not used for cut-off purposes.
The mineral resource estimated tonnage and grades did not change from 2021 to 2022.
Mineral Reserve Estimates
Mosaic’s estimated mineral reserves are located at the South Fort Meade, Four Corners and Wingate mine facilities and are reported as a beneficiation plant product (phosphate rock) tonnage and P2O5 grade including a total MER. Mineral reserves have demonstrated economic viability utilizing the criteria and assumptions required at each phosphate facility and meet all the mining criteria required including, but not limited to mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social, and governmental factors.
The methodology for estimating mineral reserves consists of interpreting the available geological data to create composites of lithological units that meet the specified reserve criteria. A utility macro is used to apply reserve plant volume recoveries, adjust insoluble limits to the geologic model and to adjust elevations grids to account for holes with no matrix that meets the mine requirements. Dragline or dredge pit design work and scheduling are applied to the geologic model by the mine planner. Tonnes, grades and product quality are estimated by applying the mining shapes to the geological model. The data from each grid is then volumetrically combined using product volumes for the specific mine pit shape creating a block of uniform constituents. The recoverable tonnes of pebble and feed for the entire mine pit are calculated based on the area of the mine pit. The beneficiation plant grade recoveries are then applied to the recoverable feed tonnes to estimate the mineral reserves and recoverable concentrate tonnes.
Additional details regarding the estimation methodology are listed in Section 12 of the 2022 Florida Phosphate Mining TRS filed as an Exhibit to this Form 10-K.
The mineral reserve estimates are listed in Table 2.13.
Table 2.13: Mineral Reserves at the End of the Fiscal Year Ended December 31, 2022 Based on a LOM Plan Phosphate Rock Price of $68.00 per tonne(a)(b)(c)(d)(e)
(tonnes in millions)
Category Tonnes Grade
%P2O5
Metallurgical Recovery %
Proven 56 28.0 Pebble: 87.8 to 97.2%, Concentrate: 68.5 to 79.5%
Probable 70 27.1 Pebble: 87.8 to 97.2%, Concentrate: 68.5 to 79.5%
Proven + Probable 126 27.5 Pebble: 87.8 to 97.2%, Concentrate: 68.5 to 79.5%
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(a)South Fort Meade and Four Corners mineral reserves are mined by a dragline mining method. Wingate mineral reserves are mined by dredge mining.
(b)Cut-off based on productivity factors per site have been applied to estimate mineral reserves. Recoverable finished product tonnes vs. matrix volume mined ranges from 9.4-9.9%. Recoverable finished product tonnes vs. total volume mined is 2.2%,
(c)Mine designs are used to constrain measured and indicated mineral resources within mineable pit shapes.
(d)Only after a positive economic test and inclusion in the LOM plan are the mineral reserve estimates considered and disclosed as mineral reserves.
(e)A commodity price of $68.00 per tonne of phosphate rock was used to assess the economic viability of the mineral reserves in the LOM.
Mineral Resources and Mineral Reserves Comparison
As of December 31, 2022, we had mineral reserves of 126 million tonnes compared to 127 million in the prior year, resulting in a decrease of <1%. Changes in mineral reserve tonnage from the prior year are the result of mining depletion, small changes to beneficiation plant factors and mineral reserve acquisitions.
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BELLE PLAINE
The Belle Plaine Facility is in the rural municipality of Pense (No. 160) in the province of Saskatchewan, Canada. It is located north of the TransCanada Highway (Hwy. 1) approximately 32 miles (51 km) west of Regina (Figure 2.4). It is the oldest and largest potash solution mine in the world. Coordinates for the Belle Plaine Facility are +50° 25’ 39.57, -105° 11’ 53.87” +50° 25’ 39.57,” -105° 11’ 53.87”.
We lease 53,133 acres of mineral rights from the Crown under Subsurface Mineral Lease KL 106-R. Table 2.14 lists additional information regarding the lease. Table 2.15 outlines the lease acreage designated by township and section. The lease term is for a period of 21 years from July 2012, with renewals at the Company’s option for additional 21-year periods.
In addition, we own 16,523 acres of mineral rights within the Belle Plaine area as shown in Table 2.16 below. All mineral titles owned or leased by us include “subsurface minerals,” which under The Subsurface Mineral Tenure Regulations, 2015 (Saskatchewan) means “all-natural mineral salts of boron, calcium, lithium, magnesium, potassium, sodium, bromine, chlorine, fluorine, iodine, nitrogen, phosphorus and sulfur, and their compounds, occurring more than 197.0 feet (60.0 m) below the surface of the land”. Other commodities (e.g., petroleum and natural gas, coal, etc.) may be included within mineral rights we lease or own but are not specifically sought after when acquired.
Within the total acreage leased from the Crown or owned by us are parcels of land where we own or lease less than a 100% share of the mineral rights. In order to mine these properties, we would need to acquire 100% control either by lease or ownership. Acreages currently not mineable for this reason are listed in Table 2.17 below.
There are no significant environmental permitting encumbrances, existing or anticipated in the future, associated with the Belle Plaine Facility. We do not anticipate any future encumbrances based on current known regulations and existing permitting processes. There are no outstanding fines or material violations.
The net book value for Belle Plaine is $0.9 billion as of December 31, 2022.
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Figure 2.4: Location Plan
Table 2.14: Mineral Lease
Crown Lease Number Type Area (Ha) E Expiration Date
KL 106-R Subsurface Mineral Lease 21,501 July 1, 2033
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Table 2.15: Sections and Acreages Owned by the Crown
Township/Range Sections of Mineral Rights Owned by Crown* Area of Mineral Rights Owned by Crown (acres)
18/21 2/100 12
19/21 4-13/16 3,087
17/22 4-14/16 3,118
18/22 9-10/16 6,166
19/22 9-6/16 5,991
17/23 9-11/16 6,201
18/23 14-13/16 9,475
17/24 7-1/16 4,500
18/24 18-7/16 11,813
18/25 4-5/16 2,768
Total 83-2/100 53,131
*Full sections range from 640 acres to 644 acres; total acreage shown above is based on 640 acres per section where actual survey acreage is not available.
Table 2.16: Sections and Acreages of Mosaic Owned Mineral Rights
Township/Range Sections of Mineral Rights Owned by Mosaic* Area of Mineral Rights Owned by Mosaic (acres) Area of Full Quarter Sections Owned by Mosaic (acres)
17/23 11-2/16 7,121 6,069
18/23 7-1/16 4,831 4,057
17/24 7-11/16 4,922 3,526
18/24 5-6/16 3,441 2,871
Total 31-4/16 20,315 16,523
*Full sections range from 640 acres to 644 acres; total acreage shown above is based on 640 acres per section where actual survey acreage is not available.
Table 2.17: Partial Mineral Rights Area
Township/Range Sections of Crown Mineral Rights Leased by Mosaic, Currently Not Mineable* Crown Mineral Rights Leased by Mosaic, Currently Not Mineable (acres)
18/22 1-2/100 652
19/22 1-7/100 682
18/23 38/100 241
17/24 39/100 250
18/24 97/100 624
Total 3-83/100 2,449
*Full sections range from 640 acres to 644 acres; total acreage shown above is based on 640 acres per section where actual survey acreage is not available.
Existing Infrastructure
The Belle Plaine Facility has been operating since 1964 and consists of a mining area and a processing plant and has an expected mine life based on mineral reserves of 63 years. The processing plant consists of a refinery and cooling pond. The Belle Plaine Facility has the infrastructure in place to meet the current production goals and LOM plan. The current
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infrastructure includes major road and highway access; railway support from Canadian National Railway (“CNR”) and Canadian Pacific Railway (“CPR”); SaskPower-supplied electricity; TransGas-supplied natural gas; and potable and non-potable water supplied from a local fresh water source. We expect the current TMA footprint to support the volume and deposition rates indicated in the 2022 Belle Plaine LOM plan.
The main source of water (non-potable) required for production is provided by SaskWater from the Buffalo Pound Lake, located northwest of the mine. It also supplies potable water for the cities of Regina, Moose Jaw and surrounding regions. Water levels are controlled by the SaskWater Security Agency and managed through the Lake Diefenbaker Dam.
SaskPower provides a portion of the power required to run the Belle Plaine Facility. This power comes in off the main SaskPower grid which could be fed from any number of SaskPower plants, along the highline running north and south along Kalium Road. A total of 138 kV comes into the Belle Plaine Facility substation where it is then stepped down to 13.8 kV using two transformers (28 MVA and 33.3 MVA). The Belle Plaine Facility owns and manages a substation where there is also a 138 kV grounding transformer and a 138 kVA gas insulated breaker lineup. The Belle Plaine Facility generates power from the powerhouse from two turbine generators.
TransGas supplies natural gas to the Belle Plaine Facility. The gas flows from the main lines into a local regulator station situated just north of the administration building and powerhouse. This station takes the high-pressure feed from the main lines and cuts it down through onsite filtration and also does some pre-heating to provide low pressure gas directly to the facility.
There are a variety of local or site roads on or to the Belle Plaine Facility. These are typically gravel roads. Roads around the processing plant are paved.
CNR and CPR are available to the Belle Plaine Facility to move final product to port. There is an operating agreement between Mosaic, CPR and CNR which governs the joint operation and interaction of all parties for freight services at the Belle Plaine Facility.
The Belle Plaine Facility is located between the cities of Moose Jaw and Regina, Saskatchewan. Moose Jaw has a population of approximately 34,000 people and is located 17 miles (27 km) west of the Belle Plaine Facility. Regina, located 27 miles (43 km) east of the Belle Plaine Facility, has a population of approximately 214,000 people.
Our workforce primarily lives in Regina and Moose Jaw and are typically trained through a variety of trades programs offered at the Saskatchewan Polytechnic campuses, the University of Regina or the University of Saskatchewan.
The province of Saskatchewan offers a large variety of suppliers for the potash mine operators. The potash industry in Saskatchewan is very mature which makes it easier to attract vendors to support the needs of the various mine sites throughout the province.
Saskatoon and Regina, Saskatchewan both have large industrial sectors with a variety of machine shops and industrial support services. Some specialty services are provided from the Alberta oil and gas industry.
Supplies are sourced locally, regionally and internationally based on availability or commercial considerations. Lead times and on-hand inventory are balanced to meet the needs of the site.
Mining Method
The Belle Plaine Facility utilizes an underground, solution mining process where paired wells are directionally drilled, cased, and cemented to the base of the potash beds. Solution mining techniques are used to target mining of the potash (“KCl”) bedding while minimizing mining of the halite salts (“NaCl”). Current mining practices allow for all three potash beds in the formation to be mined. During the mining process, the two wells are mined to connect with each other underground, allowing one well to become the feed well and the other well to become the return well. Water, or a weaker brine, is injected into the cavern to return a salt saturated and potash rich brine. This fluid is pumped through pipelines from the mining area and sent to the refinery complex as raw feed for further processing. The total life cycle of each cavern is approximately 25 years. Once the potash recovery is exhausted, each cavern is plugged and decommissioned in accordance with local government regulations.
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The mining area capability is scheduled to ramp up to support a finished tonnage projection of 3.0 million tonnes per year and will do so until drilling is completed in the year 2066 at which point there is a ramp down in production until 2084.
The 2022 Belle Plaine LOM plan based on mineral reserves has an expected total mine life of 62 years, ending in 2084 and yielding an estimated total of 164.1 million tonnes of final product KCl.
Processing Recovery Method
The Belle Plaine Facility processing plant receives KCl-NaCl rich brine, known as raw feed, from the mine and achieves KCl recovery through the refinery and cooling pond areas. We use well established solubility curves of H2O-NaCl-KCl systems to monitor the selective dropout of products in the process.
The refinery subjects the raw feed brine from the mining area to changing temperatures and pressures that selectively precipitates the NaCl and then the KCl out of solution in different stages of the process. Selective drop out of NaCl is achieved through two parallel lines of evaporators that heat the brine with steam, that is generated onsite through natural gas fired boilers. The heating of the raw feed brine results in water liberation, causing NaCl to concentrate in the brine and then precipitate out of solution. After the brine is conditioned in the evaporator circuit, it is pumped to the thickener area for clarification and then pumped into a crystallizer circuit for KCl recovery. The crystallizer circuit subjects the process brine to a vacuum that allows further boiling, creating a cooling effect on the brine. As the brine cools, the KCl is forced to precipitate out of solution. The solid KCl is withdrawn from the crystallizer vessel as a slurry and pumped to the dewatering and drying area. The brine that overflows the crystallizer circuit, which still contains some dissolved KCl and NaCl, is fed to the cooling pond area for further KCl recovery.
The cooling pond area consists of multiple ponds that are fed with brine from the refinery and with raw feed brine from the mining area. The ponds facilitate atmospheric cooling, which allows KCl to preferentially precipitate out of the brine and then settle to the bottom of the ponds. The cooling pond area contains several KCl dredges that are comprised of a cutter wheel that fluidizes the deposited KCl from the bottom of a cooling pond and a slurry pump that moves the KCl slurry toward the dewatering and drying areas.
The dewatering and drying area removes the bulk of the brine in the slurry through process equipment and then conveys the KCl product into natural gas fired industrial dryers. The dried KCl product is then fed into the sizing area or compaction area for compacting, crushing, and screening processes to achieve product size specifications. Finished product is then conveyed to the onsite storage area, where it is held until being reclaimed, rescreened and shipped offsite, primarily through rail.
We expect site production to increase to 3.0 million tonnes per year until the year 2069, at which time we expect to stop drilling new cavities and ramp down production to 2084. The site’s ability to produce at a sustained 3.0 million tonnes per year in future years is backed by a Canpotex proving run in 2016/2017, in which the Belle Plaine Facility achieved a production nameplate of 3.9 million tonnes per year. We expect total site processing recovery to average 79% throughout the remaining life of the mine and is dependent on sustained drilling activities. Future projections are modeled with mass and energy balance software to predict the future production and recovery capabilities.
History and Exploration
The Belle Plaine Facility started production in 1964, after a period of significant research into solution mining, potash recovery and processing plant construction. Table 2.18 summarizes the important historical dates and events for the Belle Plaine Facility.
Table 2.18: History
Date Event/Activity
1928 Discovery of evaporites in the sedimentary sequence in Saskatchewan.
1956 to 1966 Pittsburgh Plate Glass completed significant research and development over a decade and published several research papers concerning solution mining and potash recovery.
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1960 A pilot solution mining project located at the current site was constructed, convincing Pittsburgh Plate Glass to develop the first commercial potash solution mining operation in the world based on the pilot plant results. The first exploration well drilled at the Belle Plaine property was Standard Chemical Stony Beach #1 in August 1960. Fourteen additional exploration wells were drilled from August 1960 to June 1968.
1963 Kalium Chemicals, Ltd, a joint subsidiary of Pittsburgh Plate Glass and Armour and Co. started construction of the original processing plant for a capacity of 0.544 million tonnes annually. The main plant construction consisted of the North and South evaporators (all 8), crystallizers #1 to #4, #1 and #2 compactor systems, #1 to #5 beehive warehouses, loadout building and the office and maintenance buildings.
1964 Mine and processing plant construction completed and production commences. The first rail car of potash was produced and shipped in August.
1968 Capacity expansion to 0.9 million tonnes per year. Main assets added included three more crystallizers (#5, #6 and #7), a third cooling tower, a sixth beehive warehouse and a barn style warehouse #7, a fluid bed dryer and filter table and a third boiler.
1980 to 1984 Two capacity expansions, first to 1.1 million tonnes and the second to 1.5 million tonnes per year. The major assets added included bucket elevators for each product, the fine fluid bed dryer, #4 compactor, reheat system barometric, additional galleries and conveyors to the warehouse (1A), cooling ponds, scrubbers and the Cold Leach Area.
1989 Belle Plaine Facility sold to Sullivan & Proops (Vigoro).
1990s Capacity expansion to 2.0 million tonnes per year. Assets added included the K-Life System, #4 Turbo Generator, dual conveyors, conversion of the compaction system and additional compactors installed.
1995 IMC purchased Belle Plaine.
1998 The first 2D seismic survey at the Belle Plaine mine site was completed. A total of 160 line km was completed covering an area of approximately 5.4 sq. miles (14 sq. km).
2000 The first 3D seismic survey at the Belle Plaine Facility was completed, providing critical geological information about the geology of the potash members. This has become a critical tool used to provide confidence in the interpretation of the potash mineralization.
2001 The 2001 Belle Plaine Facility 3D seismic survey was completed. The survey covered approximately 5 sq. miles (13 sq. km) and was adjacent to and merged with the 2000 survey. This survey program utilized 35 miles (56 km) of source lines and 45 miles (72 km) of receiver lines.
2004 Mosaic created out of a merger between IMC and Cargill Crop Nutrition.
2005 The 2005 Belle Plaine Facility 3D seismic survey was completed. The survey covered approximately 4 sq. miles (11 sq. km) and was adjacent to and merged with previous 3D surveys. This survey program utilized 29 miles (47 km) of source lines and 34 miles (55 km) of receiver lines.
2008 The 2008 3D seismic survey covered approximately 28 sq. miles (72 sq. km) and was adjacent to and merged with previous 3D surveys. This survey program utilized 239 miles (385 km) of source lines and 235 miles (378 km) of receiver lines.
2008 to 2012 Capacity was expanded to 2.86 million tonnes per year. Assets added the injection wells 3 and 4, reclaim brine system, #4 boiler, process water building, cold leach motor control center room, #5 compaction system, #8 warehouse building, #2 reclaim, reclaim losses system, pond return slurry tank and centrifuge upgrades, rotary dryer #3, #2 loadout system, 37 miles (60 km) of new mine field pipelines, a drilling rig, new substation and replacement of the #4 crystallizer.
2010 The Pense 3D seismic survey was completed that covered approximately 15 sq. miles (40 sq. km) and was adjacent to and merged with the previous 3D surveys. This survey program consisted of 136 miles (219 km) of source lines and 129 miles (208 km) of receiver lines.
2014 Plant upgrades included the adding and commissioning of Compaction #6.
2016/2017 The site’s ability to produce at a sustained 3.0 million tonnes per year in future years was validated through a “proving run” completed in 2016 when the Belle Plaine Facility achieved a proven peak capacity of 3.9 million tonnes per year.
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2019 Plant upgrades were completed, consisting of adding the east thickener and advanced dewatering techniques.
2020 Two production wells were cored in 2020 to support the grade interpretation and calibration of the gamma geophysical logging system. The recent calibration check has been evaluated by a third party potash consultant to ensure applicability of the method regarding sample quality grade estimation.
Geology and Mineralization
The intracratonic Elk Point Basin is a major sedimentary geological feature in western Canada and the northwest U.S. It contains one of the world’s largest stratabound potash resources. The nature of this type of deposition is largely continuous with predictable depths and thickness. It is mined at several locations, including Belle Plaine.
Potash at the Belle Plaine Facility occurs conformably within Middle Devonian-age sedimentary rocks ranging in thicknesses from approximately 100 to 131 feet (30.5 to 39.9 m) at a depth of approximately 5,345 to 5,740 feet (1,629.2 to 1,749.6 m).
The Prairie Evaporite Formation, host to the potash mineralization, is divided into a basal lower salt and an overlying unnamed unit containing three potash-bearing units and one unit containing thin marker beds. In ascending order, the potash horizons in the upper unit are the Esterhazy Member, White Bear Marker Beds, Belle Plaine Member, and Patience Lake Member. Mineralogically, these members consist of sylvite and halite with minor amounts of carnallite (KCl, MgCl2, 6H2O).
The Esterhazy, Belle Plaine, and Patience Lake Members underly the Belle Plaine property. Also present are the White Bear Formation marker beds which occur between the Belle Plaine and Esterhazy Members but are of insufficient thickness to be minable.
The following is a summary of the key stratigraphic units for the Belle Plaine Facility area:
•Patience Lake Member: The uppermost member of the Prairie Evaporite Formation with potash production potential. Between the top of the Prairie Evaporite and the top of the Patience Lake Member is a 0 to 45 feet (0.0 to 13.7 m) thick unit of halite with clay bands called the Salt Back. The sylvite-rich horizons within the Patience Lake Member are mined using conventional underground mining techniques along a trend from Vanscoy to Lanigan in the Saskatoon area and by solution mining techniques at Belle Plaine.
•Belle Plaine Member: The Belle Plaine Member underlies the Patience Lake Member and is separated from it by a zone of low grade sylvinite. The Belle Plaine Member is mined using solution mining techniques at the Belle Plaine Facility.
•White Bear Formation: The White Bear Formation consists of marker beds that are a distinctive unit of thin interbedded clay, halite, and sylvinite horizons that are not minable due to their insufficient thicknesses of only 4.0 to 5.0 feet (1.2 to 1.5 m).
•Esterhazy Member: The Esterhazy Member is separated from the Belle Plaine Member by the White Bear Formation marker beds, a sequence of clay seams, low-grade sylvinite, and halite. The Esterhazy Member is mined using conventional underground techniques at the Esterhazy Facility in southeastern Saskatchewan, and by solution mining techniques at the Belle Plaine Facility. The potash mined at the Belle Plaine Facility is a mixture of halite and sylvite and in some parts of the mining area, small amounts of carnallite. There are a number of insoluble clay-rich zones that are not recovered in the solution mining process. The potash deposit at Belle Plaine is uniform and laterally continuous. Solution mining methods can more easily accommodate any local variations in geological condition due to the non-selective concentrate mining process.
When considering the sequence of mining at the Belle Plaine Facility, the following terminology is applied to the beds. This describes the geology in a way that best summarizes the grades that are available for solution mining.
•The Upper Mining Zone consists of beds 38 to 31 of the Patience Lake Member and beds 23 to 21 of the Belle Plaine Member. The Upper Mining Zone is about 90 feet (27.4 m) thick.
•The Salt Stringer is a thin bed of salt located between Beds 31 and 23 in the Upper Mining Zone. The Salt Stringer is approximately 10 feet (3.0 m) thick.
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•The Interzonal Salt is a thick bed of salt located between the Lower and Upper Mining Zones.
•The Marker Bed is a small, very rich potash bed located midway through the Interzonal Salt.
•The Lower Mining Zone consists of beds 13, 12 and 11 of the Esterhazy Member. The Lower Mining Zone is approximately 20 feet (6.1 m) thick.
Potash mineralization contains sylvinite: a mixture of the iron oxide-stained halite, sylvite and locally carnallite. When present interstitially or as massive pods, carnallite can deteriorate rapidly or be preferentially dissolved. The color of the potash can vary from light orange to deep red rimmed crystals. The mineralization can be locally bedded or massive. The halite and sylvite crystals can range from small to more typically coarse to large which can be attributed to the conditions during deposition as there has been no alteration.
Mineral Resource and Mineral Reserve Assumption and Modifying Factors
The key mineral resource and mineral reserve assumptions and modifying factors are listed in Table 2.19.
Table 2.19: Key Assumptions and Modifying Factors
Parameter Value TRS Section
Supporting Information Regional geologic studies, 700 production wells, seismic surveys and greater than 55 years of mining history from approximately 350 caverns. Section 7, 11
Average composited total thickness of the potash mineralization amenable to solution mining 102.2 feet (31.1 m) Section 11
Tonnage Factor 17.2 cu ft./tonne (2,054 kilograms per cubic meter). Section 11
Average KCl grade from all drilling 30.6% (19.3% K2O)
Section 11
Operating Days per Year 365 days Section 13
Mining Method Solution mining from surface installations. Section 13
Production Rate 3.0 million tonnes per year. Section 13
Cut-off No cut-off grade is applied. Section 11, 12
Mining Recovery 22% Section 13
External Dilution None Section 12
Processing Method KCl recovered from brine solution. Section 14
Processing Recovery 79 to 96% Section 14
Deleterious Elements and Impact Trace NaCl and MgCl2
Section 10
Environmental Requirements - Permits, etc. No significant environmental permitting encumbrances. Section 17
Geotechnical Factors (if any) No concerns. Section 13
Hydrological or Hydrogeological Factors (if any) No concerns. Section 13
Commodity Prices KCl commodity prices: 2022-$109/tonne, 2023-$616/tonne, 2024-$472/tonne, 2025-$253/tonne, 2026-$214/tonne, 2027-$301/tonne and for the LOM $417/tonne. Section 16
Exchange Rate (US$/C$) 1.30 Section 6
Mineral Resource Estimates
The Belle Plaine Facility mineral resources are reported as in-situ mineralization and are exclusive of mineral reserves. The mineral resources occur in the Esterhazy, Belle Plaine and Patience Lake Members. Mineral resources that are not mineral reserves have not demonstrated economic viability utilizing the criteria and assumptions required at the Belle Plaine Facility.
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The methodology for estimating mineral resources consists of interpreting the available geological data in plain view using AutoCAD 2020 software. The plan is updated to include the current mineral rights status, seismic survey interpretations, the limits of the current mining footprint, known areas (geological anomalies, town sites and other surface infrastructure) that make the mineral resource inaccessible and the planned cluster sites.
Additional details regarding the estimation methodology are listed in Section 11 of the 2021 Belle Plaine Facility TRS filed as an Exhibit to the 2021 Form 10-K.
The mineral resource estimates for the Belle Plaine Facility are listed in Table 2.20.
Table 2.20: Mineral Resources as of December 31, 2022 Based on a LOM Plan KCl Price of $108.70 per tonne(a)(b)(c)(d)
(tonnes in millions)
Category Tonnes Grade
%K2O
Grade
%KCl Cut-off
Grade(e)
Metallurgical
Recovery
Inferred 4,647 19 31 n/a 79 to 90%
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(a)Mineral resources are reported exclusive of those mineral resources that have been converted to mineral reserves.
(b)Mineral resources are not mineral reserves and do not meet the threshold for mineral reserve modifying factors, such as estimated economic viability, that would allow for conversion to mineral reserves. There is no certainty that any part of the mineral resources estimated will be converted into mineral reserves.
(c)Mineral resources assume solution mining.
(d)Mineral resources amenable to a solution mining method are contained within a conceptual cluster and cavern design using the same technical parameters as used for mineral reserves.
(e)No cut-off grade is used to estimate mineral resources as the solution mining method used at the Belle Plaine Facility is not selective. At no point in the cavern development and mining process can a decision be made to mine or not mine the potash mineralization that is in contact with the mining solution. There is no control on what potash grade the mining solution dissolves to make a concentrate that is pumped to surface from the mining caverns for processing.
There were no changes in the mineral resource estimates from 2021 to 2022.
Mineral Reserve Estimates
The Belle Plaine Facility mineral reserve estimates are reported as in-situ mineralization accounting for all applicable modifying factors. Mineral reserves meet all the mining criteria required at the Belle Plaine Facility including, but not limited to mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social, and governmental factors.
The methodology for estimating mineral reserves consists of solution mining design work and scheduling and the application of mining recovery and unplanned dilution. Additional details regarding the estimation methodology are listed in Section 12 of the 2021 Belle Plaine Facility TRS filed as an Exhibit to the 2021 Form 10-K.
The mineral reserve estimates for the Belle Plaine Facility are listed in Table 2.21.
Table 2.21: Mineral Reserves at the End of the Fiscal Year Ended December 31, 2022 Based on LOM Plan KCl Price of $108.70 per tonne(a)(b)(c)(d)(e)(f)
(tonnes in millions)
Category KCl Tonnes Grade
%KCl Grade
%K2O
Metallurgical
Recovery %
Proven 272 30.6 19.3 81.2%
Probable 388 30.6 19.3 81.2%
Proven + Probable 660 30.6 19.3 81.2%
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(a)Mineral reserves are based on measured and indicated mineral resources only.
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(b)All mineral reserves are mined by a solution mining method. Mine designs based on a solution mining method and design criteria are used to constrain measured and indicated mineral resources within mineable shapes.
(c)No cut-off grade is used to estimate mineral reserves. The solution mining method used at the Belle Plaine Facility is not selective. At no point in the cavern development and mining process can a decision be made to mine or not mine the potash mineralization that is in contact with the mining solution. There is no control on what potash grade the mining solution dissolves to make a concentrate that is pumped to surface from the mining cavities for processing.
(d)Only after a positive economic test and inclusion in the LOM plan is the mineral reserve estimate included as a mineral reserve.
(e)The following KCl commodity prices were used to assess economic viability for the mineral reserves, but were not used for cut-off purposes, 2022-$109/tonne, 2023-$616/tonne, 2024-$472/tonne, 2025-$253/tonne, 2026-$214/tonne, 2027-$301/tonne and for the LOM $417/tonne.
(f)A US$/CAD$ exchange rate of 1.30 was used to assess economic viability for the mineral reserves but was not used for cut-off purposes.
Mineral Resources and Mineral Reserves Comparison
As of December 31, 2022, our estimated mineral reserves were 660 million tonnes compared to 668 million as of the prior year-end, resulting in a change of <1%. Year-over-year changes are due to mining depletion.
ESTERHAZY
The Esterhazy Facility is approximately 10 miles (16 km) to the east of the town of Esterhazy in Saskatchewan, Canada, 56 miles (90 km) southeast of the city of Yorkton and 137 miles (220 km) east of the city of Regina (Figure 2.5). The K1 mill site is located nine miles (14 km) northeast of Esterhazy. The K2 mill site is located 12 miles (19 km) east of Esterhazy. The K3 mine site is located four miles east (six km) of Esterhazy and the K4 mineral resources are located 18 miles northeast of Esterhazy. The geographic coordinates for K1 are latitude 50.726463 N and longitude -101.933506 W. The K2 coordinates are latitude 50.6574 N and longitude -101.8422 W and the K3 coordinates are latitude 50.64623 N and longitude -101.99346 W.
Mosaic, through Mosaic Potash Esterhazy Limited Partnership, a wholly-owned indirect subsidiary of Mosaic, leases 197,920 acres of mineral rights from the Crown under Subsurface Mineral Leases KL 105, KL 126, and KLSA 003. Table 2.22 lists additional information regarding the three Crown leases. Table 2.23 outlines the total acreage of the Crown leases designated by township and range. The lease terms are 21 years, with renewals at our option for successive 21-year periods.
We also own or lease 206,228 acres of freehold mineral rights within the Esterhazy area as shown in Table 2.24 below. All mineral titles owned or leased by Mosaic include the “subsurface mineral” which under The Subsurface Mineral Tenure Regulations (Saskatchewan) means all natural mineral salts of boron, calcium, lithium, magnesium, potassium, sodium, bromine, chlorine, fluorine, iodine, nitrogen, phosphorus and sulfur, and their compounds, occurring more than 60m below the surface of the land. Other commodities (e.g., petroleum and natural gas, coal, etc.) that are not specifically sought after when acquired may be on mineral titles that Mosaic leases or owns.
Within the total acreage leased from the Crown or owned/leased by us are parcels of land where we own or lease less than a 100% share of the mineral rights. To mine these properties, we would need to acquire 100% control either by lease or ownership. Acres currently not mineable for this reason are listed in Table 2.25 below.
There are no significant environmental permitting encumbrances (existing or anticipated in the future) associated with the Esterhazy Facility. Except for royalties, we do not anticipate any future encumbrances based on current known regulations and existing permitting processes. There are no outstanding fines or material violations.
The net book value for Esterhazy is $3.4 billion as of December 31, 2022.
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Figure 2.5: Location Plan
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Table 2.22: Mineral Lease
Crown Lease Number Type Area (Hectares) Expiration Date
KL 105 Subsurface Mineral Lease 26,125 November 2, 2023
KL 126 Subsurface Mineral Lease 28,473 October 25, 2026
KLSA 003 Subsurface Mineral Lease 25,498 November 18, 2030
Table 2.23: Sections and Acreages Owned by the Crown
Township/Range Sections of Mineral Rights Owned by Crown* Area of Mineral Rights Owned by Crown (acres)
19/30 19-2/16 12,221
20/30 18-1/16 11,542
21/30 18-6/16 11,753
22/30 2-1/16 1,331
19/31 18-1/16 11,561
20/31 19-3/16 12,265
21/31 13-7/16 8,613
22/31 15-15/16 10,238
18/32 5-7/16 3,471
19/32 18-15/16 12,116
20/32 14-11/16 9,388
21/32 17-2/16 10,970
22/32 4-6/16 2,799
18/33 5-12/16 3,662
19/33 10-11/16 6,850
20/33 11-7/16 7,326
21/33 8-5/16 5,313
22/33 1-6/16 878
18/1 15-9/16 9,969
19/1 15-14/16 10,158
20/1 16-7/16 10,533
21/1 14-6/16 9,207
22/1 4-3/16 2,668
19A/1 2-12/16 1,762
18/2 6-1/16 3,865
19/2 4-13/16 3,083
19A/2 1-12/16 1,130
Total 309-4/16 194,672
*Full sections range from 640 acres to 644 acres; total acreage shown above is based on 640 acres per section where actual survey acreage is not available.
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Table 2.24: Sections and Acreages of Mosaic-Owned Mineral Rights
Township/Range Sections of Mineral Rights Owned/ Leased by Mosaic* Area of Mineral Rights Owned/Leased by Mosaic (acres)
19/30 17-14/16 11,420
20/30 19-7/16 12,430
21/30 18-8/16 11,822
19/31 16-13/16 10,760
20/31 17-13/16 11,389
21/31 23-6/16 14,954
22/31 4-7/16 2,846
18/32 4-15/16 3,168
19/32 18-8/16 11,843
20/32 22-12/16 14,553
21/32 19-12/16 12,624
22/32 4-8/16 2,868
18/33 5-14/16 3,764
19/33 10-6/16 6,631
20/33 9-8/16 6,087
21/33 12-10/16 8,075
22/33 2-3/16 1,390
18/1 2-8/16 1,583
19/1 18-14/16 12,084
19A/1 4-15/16 3,177
20/1 20-8/16 13,134
21/1 21-7/16 13,707
22/1 9-15/16 6,343
18/2 2-9/16 1,631
19/2 10-4/16 6,579
19A/2 2-2/16 1,365
Total 30-2/16 206,227
*Full sections range from 640 acres to 644 acres; total acreage shown above is based on 640 acres per section where actual survey acreage is not available.
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Table 2.25: Partial Mineral Rights Area
Township/Range Crown Mineral Rights Leased by Mosaic, Currently Not Mineable (acres)* Mineral Rights Owned/Leased by Mosaic, Currently Not Mineable (acres)*
21/30 321 -
20/31 80 -
21/31 80 -
22/31 80 514
21/32 321 -
21/33 - 74
18/1 150 -
19/1 1209 138
19A/1 322 -
20/1 221 -
21/1 80 159
18/2 160 -
19/2 161 -
19A/2 61 -
Total 3246 885
*Less than 100% share of a mineral rights parcel.
Existing Infrastructure
The Esterhazy Facility consists of an underground mine and two processing plants that started production in 1962. The mine has an additional expected life, based on mineral reserves of 33 years, to 2054. The Esterhazy Facility has the infrastructure in place to meet the current production goals and LOM plan. The current infrastructure includes: major road and highway access; railway support from CNR and CPR; SaskPower supplied electricity; TransGas and SaskEnergy supplied natural gas; and potable and non-potable water supplied from local fresh water sources. The long-term TMA development plan is being revised to support production at the levels indicated in the LOM plan.
Process and potable water for the K1 mill is provided by three approximately 200 foot (61 m) deep wells drilled into the upper Dundurn aquifer. The K2 mill water supply comes from the Cutarm Creek dam reservoir that is owned and operated by Mosaic. Located 1.5 miles (2.4 km) northeast of the K2 site, the dam forms a reservoir approximately 5.25 miles (8.9 km) long and 650 feet (198.1 m) wide. K3 mine water is supplied from K2 via a 7.4 mile (11.9 km) long pipeline.
The power to operate the Esterhazy Facility is supplied by the provincial utility, SaskPower. The K1 mill is serviced by a 72 kV line with approximately 36 MVA capacity. The K2 mill has two services at 72 kV and 138 kV respectively, with a combined capacity of 125 MVA. The K3 mine is serviced by a 230 kV line from SaskPower with 140 MVA capacity. Two transformers step down the voltage, each rated at 70 MVA.
TransGas is the primary supplier of an uninterrupted supply of natural gas to the Esterhazy Facility. Esterhazy has regulator stations for the natural gas at each of the sites, with a low-pressure distribution piping network.
The K1 and K2 sites are serviced by the CNR main line, and by spur lines to the CPR. The surrounding area is developed for agriculture with a road network, villages and towns.
Regina International Airport is 140 miles (225 km) west of the Esterhazy Facility, while Yorkton municipal airport is 55 miles (88 km) to the northwest. The Town of Esterhazy maintains a paved 3,000 feet (914.0 m) long airstrip, located 8 miles (13 km) southwest of the K1 mill.
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The Esterhazy Facility’s workforce lives throughout the area, generally within 62 miles (100 km) of the mine sites. This includes the Russell and Binscarth areas of western Manitoba. Education and healthcare facilities are in Esterhazy, Russell, Melville, and Yorkton.
The province of Saskatchewan offers a large variety of suppliers for the potash mine operators. The potash industry in Saskatchewan is very mature, making it easier to attract vendors to support the needs of the various mine sites throughout the province.
Saskatoon and Regina have large industrial sectors with a variety of machine shops and industrial support services. Some specialty services are provided from the Alberta oil and gas industry.
Supplies are sourced locally, regionally and internationally based on availability or commercial considerations. Lead times and on-hand inventory are balanced to meet the needs of the site.
Mining Method
At the Esterhazy Facility, potash is extracted by underground mining using the room-and-pillar method. Current mine design allows for the planned extraction of 27.6% of the in-situ ore. Pillars are left in place between mining rooms to support overlying strata and prevent failure of the upper rock formations or an inflow of brine from any water-bearing zones above.
The LOM plan for the Esterhazy Facility includes the K3 mineral reserves. The K4 mineral resources are currently scheduled after depletion of the K3 mineral resources. Production is based on an average production rate of 17.527 million tonnes per year based on 365 production days per year.
We expect the K3 mineral reserves production to ramp up to full production by 2024. We expect the mine to ramp down starting in 2051, with mining anticipated to be completed in 2054.
Our current schedule to begin mining the K4 mineral resources is in 2050. We expect the mine to ramp up to full production in 2055 and ending in 2090.
Processing Recovery Method
The Esterhazy Facility’s processing plant consists of two separate mill facilities, designated as K1 and K2. Each mill processes the raw ore feed stock received from the underground mining operations through crushing, separation, screening and compaction unit operations to produce on-grade, saleable product. The plants utilize online grade analyzers to monitor the process as well as routine samples that are analyzed by the onsite lab. The milling can be broken down into two main functions: the wet end separates potash and salt, while the dry end sizes potash for sale.
The wet end of the mill begins with raw ore sizing and crushing to prepare it for the separation processes. In heavy media, the larger size fraction is separated into potash and salt through dense media separation that is driven by differences of buoyancy in salt and potash. Flotation receives the smaller size fraction and has specific reagents added that allow the potash crystals to float while the salt is rejected as tailings material. At K2 there is also a crystallizer circuit that produces potash using solubility, temperature, and pressure differences. Dewatering and drying is the final stage in the wet end, where potash is sent through centrifuges and industrial driers to remove all moisture.
Once the product is dried, it is sent to a screen to separate right-sized material from the over and undersized material for all the different product grades. Oversized material is sent through a crushing circuit to break it down to right-sized material. The undersized material is upgraded through compaction to a larger product.
We plan to ramp up milling rates once the K3 mine is up to full capacity. We then expect to stabilize at a total milling rate to the end of mine life. The differences in final product tonnes will be based on supplied raw ore grade as it varies throughout the mine workings. We believe that the site’s ability to produce at the increasing rates being forecasted in the LOM plan is supported by a proving run in 2013, when the Esterhazy Facility achieved a production nameplate of 6.3 million tonnes overall.
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History and Exploration
The Esterhazy Facility K1 started production in 1962 and K2 started production in 1967. Table 2.26 lists the important historical dates and events for Esterhazy.
Table 2.26: History
Date Event/Activity
1928 Discovery of evaporites in the sedimentary sequence in Saskatchewan.
1955 International Minerals and Chemicals (IMC, Canada) Ltd. acquired >500,000 acre lease in Esterhazy area and started drilling.
1957 to 1962 IMC Corporation begins shaft sinking at K1. K1 mine production officially started in September 1962 at a capacity of 0.9 million tonnes per year.
1965 K2 TMA Phase I expansion.
1966 The K1 mine capacity was expanded to 1.5 million tonnes per year.
1967 The K2 shaft sinking was completed to a capacity of 2.4 million tonnes per year. The first potash production from K2 was in April/May.
1968 The K2 TMA Phase II expansion was completed.
1974 K2 mill expansion, heavy media circuit.
1981 The K2 TMA Phase III expansion was completed.
1985 Inflow 10B was detected December 29, 1985 in the D400 entry at a point 3.5 miles (5.6 km) southwest of the K2 shaft. Initial inflow was estimated to be 1,000 gpm. Information obtained using seismic surveys allowed for targeted drilling and placement of calcium chloride and various grouts to reduce the inflow to manageable levels. The pumping capacity was increased through a series of stages to bring online a total of 22 pumps, to a maximum capacity of 4,000 gpm. As a result of these efforts, K1 and K2 sites continued normal mining operations.
1987 Mineral Resource Location Study - Vibroseis Study was completed.
1989 12 exploration drill holes to delineate the K1 and K2 mining area were completed.
1991 to 1998 Seismic surveys in the Gerald, Gerald West and Cutarm areas.
1997 IMC Kalium merged with IMC Global and Freeport-McMorRan.
1999 Company renamed IMC Potash.
2000-03 Seismic surveys: 2D and 3D (K1 and K2).
2004 Mosaic created out of a merger between IMC and Cargill Crop Nutrition.
2005 3D seismic surveys completed at K1 (7.5 sq. miles, 19.5 sq. km) and K2 (4.0 sq. miles, 10.3 sq. km).
2006-09 Various seismic surveys completed. Hoist expansion at K2. Processing plant capacity increased to 4.8 million tonnes per year. K2 TMA expansion completed. Exploration drilling of 10 holes including two shaft pilot holes completed as part of the K3 expansion project.
2010 Completion of the crushing expansion at K1.
2011 3D seismic surveys at K1 North (19.7 sq. miles, 51.4 sq. km) and Perrin Lake (14.4 sq. miles, 37.3 sq. km).
2012 K3 South shaft pre-sink was completed. Esterhazy exits Tolling Agreement with PCS. A number of 3D seismic surveys were completed including Saskman, K1 NW, K1 SWD Field. Seven brine injection wells were drilled at Farfield.
2013 K3 South Shaft sunk to the potash level. 3D seismic survey at Panel 11Q (9.2 sq. km) completed. Completion of mill expansion at K2 for an additional 0.7 million tonnes per year. A Canpotex proving run was successfully completed increasing the site nameplate processing plant capacity from 4.8 million tonnes per year to 6.3 million tonnes per year.
2014 3D seismic survey at Panel 11Q 3C (3.6 sq. miles, 9.3 sq. km) completed.
2015 3D seismic surveys at Gerald (4.7 sq. miles, 12.1 sq. km) and K3 (89.7 sq. miles, 232.4 sq. km) completed.
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2016 Nine exploration drill holes completed.
2017 The K3 North shaft sinking was completed and the first K3 ore from the South shaft was skipped to surface and trucked to the K1 mill.
2018 The K3 to K2 overland conveyor construction was completed. The K3 North shaft steel and Keope hoist rope up were completed. The K3 North shaft first ore skipped in December 18 and trucked to the K2 mill.
The first K3 ore was conveyed on the overland conveyor to the K2 mill in December.
2019 Commissioned the K3 Koepe production and Blair service hoists. Four drum miners cutting K3 shaft pillar development started. Two four rotor miner assemblies completed. The K3 South shaft sinking was completed in November.
2020 Completion of the South shaft bottom steel, added a third four-rotor miner, installed the Mainline conveyor, added a fourth rotor miner cutting and completed the K3 South Headframe concrete slip. K3 shaft pillar development completed in December. The K3 fifth four-rotor continuous miner started cutting in October. The first ore from K3 conveyed to K1.
2021 The sixth K3 four-rotor miner started cutting in January and the seventh four rotor-miner started cutting in May. The K1 and K2 mines were closed 9 months ahead of schedule in response to brine inflow conditions.
2022 K1 and K2 shaft decommissioning completed.
Geology and Mineralization
The intracratonic Elk Point Basin is a major sedimentary geological feature in western Canada and the northwest U.S. It contains one of the world’s largest stratabound potash resources. The nature of this type of deposition is largely continuous with predictable depths and thickness. It is mined at several locations, including the Esterhazy Facility.
Potash at the Esterhazy Facility area occurs conformably within Middle Devonian-age sedimentary rocks and is found in total thicknesses ranging from approximately 100 to 131 feet (30 to 40 m) at a depth of approximately 5,345 to 5,740 feet (1,630 to 1,750 m).
The Prairie Evaporite Formation, host to the potash mineralization, is divided into a basal “lower salt” and an overlying unnamed unit containing three potash-bearing units and one unit containing thin marker beds. In ascending order, the potash horizons in the upper unit are the Esterhazy Member, White Bear Marker Beds, Belle Plaine Member, and Patience Lake Member. Mineralogically, these members consist of sylvite and halite, with minor amounts of carnallite (KCl, MgCl2, 6H2O).
In the Esterhazy area, the Esterhazy, White Bear and Belle Plaine Members are present, and the Patience Lake Member is absent. The following is a summary of the key stratigraphic units for the Esterhazy Facility area:
•Belle Plaine Member: The Belle Plaine Member underlies Second Red Bed and makes up part of the salt back that is critical to isolating the mining horizon from the formations above. The Belle Plaine Member is mined using solution mining techniques at the Belle Plaine Facility and is not mined at the Esterhazy Facility.
•White Bear Member: The White Bear Member consists of marker beds that are a distinctive unit of thin interbedded clay, halite, and sylvinite horizons that are not minable due to their insufficient thickness of only 4.0 to 5.0 feet (1.2 to 1.5 m).
•Esterhazy Member: The Esterhazy Member is separated from the Belle Plaine Member by the White Bear Member marker beds, a sequence of clay seams, low-grade sylvinite, and halite. The Esterhazy Member is mined using conventional underground techniques at the Esterhazy Facility in southeastern Saskatchewan, and by solution mining techniques at the Belle Plaine Facility.
The typical sylvinite intervals within the Prairie Evaporite Formation consist of a mass of interlocked sylvite crystals that range from pink to translucent and may be rimmed by greenish-grey clay or bright red iron insoluble material, with minor halite randomly disseminated throughout the mineralized zones. Local large one inch (2.5 cm) cubic translucent to cloudy halite crystals may be present within the sylvite groundmass, and overall, the sylvinite ranges from a dusky brownish red color (lower grade, 23% to 27% K2O with an increase in the amount of insoluble material) to a bright, almost translucent pinkish orange color (high grade, 30%+ K2O). Carnallite is also present locally in the Prairie Evaporite Formation as a
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mineral fraction of the depositional sequence. The intervening barren salt beds consist of brownish red, vitreous to translucent halite with minor sylvite and carnallite and increased insoluble materials content.
Mineral Resource and Mineral Reserve Assumptions and Modifying Factors
The key mineral resource and mineral reserve assumptions and modifying factors are listed in Table 2.27.
Table 2.27: Key Assumptions and Modifying Factors
Parameter Value TRS Section
Supporting Information Regional geologic studies, 59 exploration holes, seismic surveys, in-mine channel samples and 50 years of mining history at K1 and K2. Section 7
Average total thickness of the potash mineralization 8.55 feet (2.6 m)., based on the ratio of 8.5 feet (2.6 m)t. production panel mining height and 9.0 feet (2.7 m) t. development mining height. Section 11
Density 129.878 lbs./cu ft. (2,080.446 kg/cu m) Section 11
In-mine channel samples grade 27.1% K2O
Section 11
Operating Days per Year 365 days Section 13
Mining Method Underground room and pillar mining. Section 13
Production Rate 17.527 million tonnes per year. Section 13
Cut-off No cutoff grade is applied. Section 11
Mining Recovery 27.6% Section 12, 13
External Dilution None Section 12, 13
Processing Method Two mill facilities that crush, float, screen and compact KCl. Section 14
Processing Recovery 85 to 88% (86.1% average) Section 14
Deleterious Elements and Impact Increased amounts of NaCl can significantly impact production volumes. Section 10
Environmental Requirements, Permits, etc. No significant environmental permitting encumbrances. Section 17
Geotechnical Factors (if any) No concerns/issues. Section 13
Hydrological or Hydrogeological Factors (if any) Undersaturated brines from adjacent aquifers. Section 13
Commodity Prices 2021 LOM plan KCl commodity prices (US$): 2022-$103/tonne, 2023-$231/tonne, 2024-$219/tonne, 2025-$185/tonne, 2026-$188/tonne and for the LOM $219/tonne for the economic evaluation of the mineral resources. The following 2022 LOM plan K2O commodity prices were used to assess economic viability for the mineral reserves, but were not used for cut-off purposes, 2023-$616/tonne, 2024-$472/tonne, 2025-$253/tonne, 2026-$214/tonne, 2027-$301/tonne and for the LOM plan $417/tonne. Section 16
Exchange Rate (US$/CAD$) 1.3 Section 16
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Mineral Resource Estimates
The Esterhazy Facility’s mineral resources are reported as in-situ mineralization and are exclusive of mineral reserves. The mineral resources occur in the Esterhazy, White Bear and Belle Plaine Members. We assume that the mineralization is laterally continuous and consistent, based on publicly available regional geological information and our knowledge of the local geology and area.
Mineral resources that are not mineral reserves have not demonstrated economic viability utilizing the criteria and assumptions required at the Esterhazy Facility.
The methodology for estimating mineral resources consists of interpreting the available geological data in plain view using AutoCAD 2020 software. The plan is updated to include the current mineral rights status, seismic survey interpretations, the limits of the current mining footprint, known areas (geological anomalies, town sites and other surface infrastructure) that make the mineral resource inaccessible and therefore excluded from the mineral resource estimation process, property boundary pillars, pillars around exploration holes and infrastructure, “no mining” areas in the uncontrolled mineral rights locations and a pillar between the K1 and K2 mining area and the adjacent K4 mineral resource areas.
Additional details regarding the estimation methodology are listed in Section 11 of the 2021 Esterhazy Facility TRS filed as an Exhibit to the 2021 Form 10-K.
The mineral resource estimates for the Esterhazy Facility are listed in Table 2.28.
Table 2.28: Mineral Resources at the End of the Fiscal Year Ended December 31, 2022 Based on a LOM Plan KCl Price of $103.4 per tonne(a)(b)(c)(d)(e)(g)(h)
(tonnes in millions)
Category Tonnes Grade
%K2O(f)
Metallurgical
Recovery
Measured 255.0 23.3 86.1
Indicated 2,092.0 22.8 86.1
Measured + Indicated 2,347.0 22.9 86.1
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(a)Mineral resources are reported exclusive of those mineral resources that have been converted to mineral reserves. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
(b)Mineral resources are not mineral reserves and do not meet the threshold for mineral reserve modifying factors, such as estimated economic viability, that would allow for conversion to mineral reserves. There is no certainty that any part of the mineral resources estimated will be converted into mineral reserves.
(c)Mineral resources assume an underground room and pillar mining method.
(d)Mineral resources amenable to underground mining methods are accessed via shaft and scheduled for extraction based on a conceptual room and pillar design using the same technical parameters as for mineral reserves.
(e)No cut-off grade or value based on commodity price is used to estimate mineral resources. This is because the mining method used at Esterhazy is not grade selective. The potash mineralization is mined on one level by continuous miners following the well-defined and continuous beds of mineralization with relatively consistent grades (Section 11.2 of TRS).
(f)%K2O refers to the total %K2O of the samples.
(g)We used the following 2021 LOM plan KCl commodity prices to assess prospects for economic extraction for the mineral resources but are not used for cut-off purposes: 2022-$103/tonne, 2023-$231/tonne, 2024-$219/tonne, 2025-$185/tonne, 2026-$188/tonne, and for the LOM plan $219/tonne.
(h)We used a US$/CAD$ exchange rate of 1.30 to assess prospects for economic extraction for the mineral resources but was not used for cut-off purposes.
There were no changes to the mineral resources from 2021 to 2022.
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Mineral Reserve Estimates
The Esterhazy Facility’s mineral reserves are reported as in-situ mineralization, accounting for all applicable modifying factors. Mineral reserves meet all the mining criteria required at Esterhazy including, but not limited to mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social and governmental factors.
The methodology for estimating mineral reserves consists of post pillar mine design work and scheduling and the application of mining recovery and unplanned dilution. Additional details regarding the estimation methodology are listed in Section 12 of the 2021 Esterhazy Facility TRS filed as an Exhibit to the 2021 Form 10-K.
The mineral reserve estimates for the Esterhazy Facility are listed in Table 2.29.
Table 2.29: Mineral Reserves at the End of the Fiscal Year Ended December 31, 2022 Based on a LOM Plan KCl Price of $103.4 per tonne(a)(b)(d)(e)
(tonnes in millions)
Category Tonnes Grade
%K2O(c)
Metallurgical
Recovery %
Proven 110.0 23.9 86.1
Probable 433.0 20.9 86.1
Proven + Probable 543.0 21.3 86.1
___________________________
(a)The mineral reserves are based on measured and indicated resources only and are reported as in-situ mineralization.
(b)We used underground mining standards and design criteria to constrain measured and indicated mineral resources within mineable shapes. Only after a positive economic test and inclusion in the LOM plan is the mineral reserve estimate included as mineral reserves.
(c)%K2O refers to the total %K2O of the samples.
(d)We used the following KCl commodity prices to assess economic viability for the mineral reserves, but were not used for cut-off purposes: 2022- $103/tonne, 2023-$616/tonne, 2024-$472/tonne, 2025-$253/tonne, 2026-$214/tonne, 2027-$301/tonne and for the LOM plan $417/tonne.
(e)We used a US$/CAD$ exchange rate of 1.30 to assess economic viability for the mineral reserves but was not used for cut-off purposes.
Mineral Resources and Mineral Reserves Comparison
Our mineral reserves decreased by 3% to 543 million tonnes at December 31, 2022 compared to 557 million tonnes at December 31, 2021. Year-over-year changes are due to mining depletion.
TAPIRA
Tapira is located in the western portion of the state of Minas Gerais, in the southeast of Brazil, to the north of the town of Tapira, and approximately 22 miles (35 km) south-southeast of the city of Araxá (Figure 2.6). The mine is 261 miles (420 km) to the Minas Gerais state capital of Belo Horizonte, via the BR-262 highway to Araxá and then the BR 146 highway to Tapira. The property extends from approximately UTM 7,805,000 N to 7,799,500 N, and from 304,000 E to 310,000 E (Corrego Alegre 1961, UTM Zone 23 South), and is centered approximately at 19º52’S/46º51’W. The Tapira complex consists of a mine and a phosphate beneficiation plant. The plant produces phosphate conventional and ultrafine concentrate, which is sent by pipeline (conventional) and truck (ultrafine) to local Mosaic chemical plants for finished product production.
Figure 2.6: Project Location Plan
Infrastructure
Tapira is located in a highly developed region known as Alto Parnaíba. This region is known for its excellent, modern infrastructure with high standards of living compared with other regions in Brazil. The local infrastructure available to Tapira is excellent, as it is situated within a well-established mining area, 22 miles (35 km) from the well-developed city of Araxá and within 16 miles (25 km) of two other mining operations.
The supply of electricity occurs via a 138 kiloVolt (“kV”) transmission line that is operated by CEMIG and Vale Energia Concessionaires. Tapira has a total receipt of 40 megawatts (“MW”) and an annual power usage around 305 gigawatts (“GW”). The main substation receives 138 kV in three oil-type transformers which is transferred to secondary substations. From the secondary substations, power is distributed to the end-use areas at 110 volts (“V”), 220 V, 280 V, 440 V, or 4,160 V.
Water intake comes from the Ribeirão do Inferno and artesian wells, as well as recovered water from the tailings dams. Additionally, there are four artesian wells at Tapira. The industrial reuse system used to recover water from the dams includes 10 pumps (four operating and six on stand-by) and 36 inch (91 cm) pipes covering varying distances to the different dam areas. The distance from BR1 dam is approximately six miles (nine km) with a rated capacity of 4,400 cubic meters per hour (“m3/hr”). The distance from BL1 dam is approximately two miles (three km) with a rated capacity of 10,400 m3/hr. The distance from BR dam is approximately 2.5 miles (four km) with a rated capacity of 4,900 m3/hr.
There is currently no rail or airport access at Tapira. The closest rail and airport access is in the city of Araxá.
Infrastructure includes a phosphate beneficiation plant with associated support infrastructure, including tailings storage facilities, maintenance facilities, warehouses and various administrative and other support facilities. The mine infrastructure
includes overburden storage and other material storage facilities, surface water management features and maintenance, warehouses, and other typical support infrastructure.
Tapira includes an impoundment stability monitoring system that covers all the operating impoundments at Tapira.
Network connectivity is in place at the mine buildings and a telephone system provides coverage throughout the mine unit. A radio system provides the ability to dispatch and control the mining equipment and transport trucks as well as communicate with the control room in the beneficiation plant.
Mineral and Surface Rights
Mining rights in Brazil are governed by the Mining Code, Decree 227, dated February 27, 1967, and further regulation enacted by the ANM. This governmental agency, which controls the mining activities throughout Brazil, was recently created as a replacement of the former National Department of Mineral Production (“DNPM”). All sub-soil situated within Brazilian territory is deemed state property, with the mining activities subject to specific permits granted by the ANM.
We currently hold a total of eight mining permits within the Tapira area (3,842 hectares (“ha”). The Tapira mineral assets are part of a Consortium named Consórcio Vale Fosfértil Tapira created by Decree number 98.962 (February 16, 1990), process number 930.785/1988 (4,355.76 ha) granted to Vale S.A. (previously Vale do Rio Doce S.A.) and Vale Fertilizantes Fosfatados S.A. - Fosfértil (the “Tapira Mining Consortium”).
The Tapira Mining Consortium and all mining permits, except for one permit, 803.387/1974 which is currently pending, have transferred from Vale S.A to Mosaic Fertilizantes P&K Ltda. Tapira operates via the Tapira Mining Consortium, therefore, the transfer process of mining right ANM 803.387/1974 does not affect the continuity of the mining operations.
Tapira has an overall surface rights area of 8,008 ha distributed in 18 different property registrations. The surface area within the ultimate pit is currently mostly controlled by Mosaic. There is a small area near a local village that is not within the current property rights. The relocation of the village and State Highway MG-146 will be necessary to fully realize the LOM tonnages. The area surrounding the village and State Highway MG-146 is included in the currently controlled mining permits, and is therefore not seen as a significant encumbrance to Tapira.
The capacity requirements are not currently in place for all tailings disposal for total LOM capacity requirements. However, Tapira has an ongoing permitting and development plan to support the mining operations that will continue through the LOM requirements.
Present Condition of the Property
The Tapira mine has been in operation since 1978 and is a production stage property.
All required fixed and permanent infrastructure of power, pipelines and primary roadways, and project access are established. Drainage, water controls, and mine access roads and ramps are established for current operations and will be expanded and continued as the pit progresses through its planned life of operations.
The ore at Tapira is recovered using open-pit conventional truck and shovel mining methods, due to the proximity of the ore to the surface and the physical characteristics of the deposit. The ore is transported via truck to a homogenization pile where it is later fed to the beneficiation plant via conveyors. The beneficiation plant produces phosphate conventional and ultrafine concentrate which is sent by pipeline (conventional) and truck (ultrafine) to local Mosaic chemical plants for finished product production.
The mining equipment at Tapira is leased and therefore not owned by us. The beneficiation plant has been in operation since Tapira started 44 years ago. The tailings dams, water dams and sedimentation ponds have been active at Tapira since mining started 44 years ago as well. Currently the BR1 dam is being raised to its final design height to accommodate the LOM plan.
The total book value for Tapira is R$1,692 million (US$332 million with exchange rate of 1 US dollar = 5.0993 Brazilian real) as of December 31, 2022.
Exploration activities are ongoing for in-fill drilling for phosphate production to complete the current LOM. Additional areas of exploration and research include better understanding of the non-weathered material and titanium ore for future mining prospects.
History of Previous Operations
Tapira has been in operation since 1978 and has produced more than 70 million tonnes (“Mt”) of phosphate concentrate. Since 1978, Titanium Dioxide (TiO2) bearing material, mainly in the form of anatase, has been stockpiled, with more than 200,000 tonnes awaiting the implementation of an economical beneficiation method.
The geological structure of the alkaline complex of Tapira was first recognized in 1953, through magnetometric and radiometric investigations carried out by the Brazil-Germany Project. There was an agreement between the two countries to carry out regional geophysical aero-survey programs, performed by the Geological Survey of Brazil in the 1950s, 1960s, and 1970s.
In 1968, three major private groups - Pedro Maciel, Companhia Meridional de Mineração, and Companhia Brasileira de Metalurgia e Mineração - had exploration research requests granted by DNPM. In early1971, Vale (previously known as Companhia Vale do Rio Doce) joined Pedro Maciel to create the company Titan International S.A., which changed its name to Rio Doce Titânio in later years. Vale acquired the rights of Pedro Maciel at the end of 1971, with the mining rights incorporated into the company Mineração Rio Paranaíba. At the time, a series of intensive and detailed systematic works were undertaken, and important occurrences of phosphate, titanium, niobium, rare earths and vermiculite were identified.
Extensive exploration works were undertaken between 1971 and 1973, with particular focus on the occurrences of titanium. From 1973 to 1977, the exploration priorities changed to occurrences of phosphate, with the aim of replacing the massive imports of fertilizers in the agricultural sector that was then undergoing a period of expansion in Brazil. In 1977, the Fosfértil (Fertilizantes Fosfatados S.A.) company was created under the administration of Petrofértil (a subsidiary of Petrobras, the Brazilian state oil company). In 1992, Fosfértil was privatized, and a pool of investors held the company shares.
In 2010, Vale S.A. acquired complete control of Fósfertil. Thereafter it created a new company, Vale Fertilizantes S.A., which also included other fertilizer assets. At the start of 2018, Mosaic Fertilizantes P&K S.A. acquired the assets of Vale Fertilizantes S.A,, including the Tapira mineral deposit.
Mineral Resources and Mineral Reserves
The regional and local geology, mineral resources, and mineral reserves are detailed in the sub-sections below.
Regional and Local Geology
The Tapira phosphate deposit is part of a series of Late-Cretaceous, carbonatite-bearing alkaline ultramafic plutonic complexes belong to the Alto Paranaiba Igneous Province. The Tapira igneous rocks intrude the phyllites, schists, and quartzites of the Late-Proterozoic Brasília mobile belt. The Tapira igneous complex is roughly elliptical, 35 square kilometers (km2) in area and consists predominantly of alkaline pyroxenite rocks with subordinate carbonatite, serpentinite (dunite), glimmerite, syenite, and ultramafic potassic dikes.
The tropical weathering regime prevailing in the region and the inward drainage patterns developed from the weathering-resistant quartzite margins of the dome structures resulted in the development of an extremely thick soil cover in most of the complexes. The extreme weathering process was responsible for the residual concentration of apatite. The main geological types identified in the deposit are a combination of the igneous protoliths (bebedourites, phoscorites, and carbonatites) and the products of the weathering process.
Mineral Resources
The mineral resources at Tapira were estimated based on the long-standing exploration drilling and sampling completed at Tapira since 1967. The drilling results were loaded into the geological database, verified, and vetted for errors and then used in the geological model to create the lithology and weathering surfaces. The geological model was used in creating the block model, where geological domains based on the lithology and weathering surfaces were utilized to interpret grade, density, and mass recovery in a geologically appropriate manner. Exploratory Data Analysis and geostatistical analysis were completed on the raw and composite data sets to help define interpolation parameters and mineral resource classifications. The mineral resources were restricted based on an optimized pit limit that took into account cut-off grade, price, mining costs, infrastructure limitations, and mineral licenses. The mineral resources are exclusive of mineral reserves and include approximately 129.8 million tonnes of measured and indicated mineral resources with a P2O5ap grade of 7.2%. There are an additional 112.8 million tonnes of inferred mineral resources with a P2O5ap grade of 8.6% (Table 2.30).
Table 2.30: Mineral Resources at the End of the Fiscal Year Ended 2022 Based on R$ 1,492.92/tonne of Phosphate Concentrate
(tonnes in millions)
Category Tonnes Grade (%P2O5ap)
Metallurgical Recovery (%P2O5ap)
Measured 62.8 8.0 52.7
Indicated 67.0 7.8 53.2
Measured + Indicated 129.8 7.9 53.0
Inferred 112.8 8.6 52.4
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(a)Additional details are described in the TRS filed as an Exhibit to the 2021 Form 10-K.
(b)Mineral resources are reported exclusive of mineral reserves. Mineral resources are not mineral reserves and do not meet the threshold for mineral reserve modifying factors, such as estimated economic viability, that would allow for conversion to mineral reserves. There is no certainty that any part of the mineral resources estimated will be converted into mineral reserves.
(c)Grades are P2O5ap, which represents the P2O5 associated with apatite and was calculated by the evaluation of the CaO / P2O5 ratio. Where CaO / P2O5 ratio was greater than or equal to 1.34, P2O5ap was equal to the total of P2O5; where the CaO / P2O5 ratio was less than 1.35, P2O5ap was equal to the CaO / 1.35 ratio.
(d)Mineral resource tonnages and grade are stated in-situ and exclusive of mineral reserves. Cut-off grade of P2O5ap ≥ 5.0% and 0.9 ≤ Ratio of CaO to P2O5 (RCP) ≤ 3.0 was applied to mineral resources. Measured, indicated and inferred blocks were included in mineral resource estimates if they were inside mining concessions and exploration permits with a final report approved by ANM, but exclusive of physical structures such as the crusher and waste piles. A revenue factor of 1.0 with sales price of R$1,492.92 per tonne of phosphate concentrate (2020 price evaluation) was used to develop the mineral resource pit shell.
Mineral Reserves
A mineral reserve estimate has been prepared for Tapira. Mineral reserves are limited by the Tapira property boundary, and the ultimate pit designed for the LOM plan, which was limited with an economic optimized pit analysis.
The mineral reserve estimate includes mining modifying adjustments for mining ore recovery, mining dilution, and ore concentration recovery factors. The mineral reserve estimate is limited to a cut-off grade of 5.0% P2O5ap, as well as certain geometallurgical beneficiation criteria, including:
a.Diluted ratio of CaO to P2O5 (RCP) between 0.9 and 3.0
b.Within one of the four mineralized domains characterized by lithology and alteration
The beneficiation plant generates conventional (coarse) and ultrafine concentrates from the Tapira ore. The mass recovery of coarse concentrate is forecast based on the results of laboratory flotation tests performed on drill core samples. The mass recovery of coarse concentrate is predicted based on a mass recovery regression equation as a function of the ROM Fe2O3, CaO and P2O5 chemical compositions.
The metallurgical recovery is calculated from the mass recovery, the concentrate % P2O5, and the ROM % P2O5 according to the following equation:
Metallurgical recovery = 100 x Mass recovery x Concentrate % P2O5 / ROM % P2O5
The annual production estimates were used to determine annual estimates of capital and operating costs. All cost estimates were in real 2022 R$ terms. Total capital costs included R$3.7 billion of sustaining capital and opportunity costs. Annual operating costs were based predominantly on historical consumption factors and unit costs. They included costs for ongoing, final reclamation, and closure. Annual total cost of rock production varied from R$250 per concentrate tonne to R$379 per concentrate tonne, with an average total cost of production for a tonne of phosphate rock concentrate at R$311.
For the purpose of reporting for our total financial statistics, the discounted cash flow was converted from Brazilian reals to U.S. dollars at an exchange rate of R$4.69 = US$1.00.
Because Tapira is a captive operation supplying rock to other Mosaic-owned chemical plants, there is no transparent mined phosphate rock commodities price market in Brazil. Mineral reserves for Tapira were estimated based on an internal transfer price. This internal transfer price was set as a constant number of US$102.47 per tonne (R$480.59 per tonne).
The Tapira mineral reserve, as of December 31, 2022, was estimated to be 457.3 Mt ROM (dry), with a dry grade of 9.7% P2O5ap delivered to the concentrator plant and 72.8 Mt (dry) concentrated phosphate tonnes at 35.0% P2O5 post-concentration process plant. This includes (Table 2.31):
a.182.7 Mt of Proven Mineral Reserve at a 9.4% P2O5ap dry grade, resulting in 28.3 Mt of concentrate with a 35.0% P2O5 post beneficiation plant; and
b.274.6 Mt of Probable Mineral Reserve with a 9.1% P2O5ap dry grade, resulting in 44.5 Mt of concentrate at 35.0% P2O5.
Table 2.31 Mineral Reserves at the End of the Fiscal Year Ended 2022 Based on R$1,492,92/tonne of Phosphate Concentrate
(tonnes in millions)
Category Tonnes (Dry) Grade
(%P2O5ap Dry)
Metallurgical Recovery (%P2O5)
Proven 182.7 9.4 57.4
Probable 274.6 9.1 62.6
Proven + Probable 457.3 9.2 60.4
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(a)Additional details are described in the TRS filed as an Exhibit to the 2021 Form 10-K.
(b)Mineral reserves are within measured and indicated mineral resource limits.
(c)Only after a positive economic test and inclusion in the LOM plan is the mineral reserve estimate included as a mineral reserve.
(d)Grades are P2O5ap, which represents the P2O5 associated with apatite and was calculated by the evaluation of the CaO / P2O5 ratio. Where CaO / P2O5 ratio was greater than or equal to 1.34, P2O5ap was equal to the total of P2O5; where the CaO / P2O5 ratio was less than 1.35, P2O5ap was equal to the CaO / 1.35 ratio.
(e)Mineral reserve tonnages and grade are stated as ROM tonnages. The mineral reserves are constrained by a pit design that honors site specific geotechnical designs by pit sector. The mine plan considers constraints required for surface and groundwater management, appropriate extraction methodology, labor and equipment requirements, beneficiation plant mass and metallurgical recoveries, and are dependent upon all permits and environmental licenses in place and continued approved status. The reference point for cut-off grade and pit optimization analysis is tonnes of concentrate at a price of R$1,492.92/tonne concentrate (2020 price evaluation). Cut-off grade of P2O5ap ≥ 5.0% and 0.9 ≤ RCP ≤ 3.0 was applied to mineral reserves. Mineral reserves were proven to be economic based on internal transfer price that was derived in the discounted cash flow and compared to the gross margin available.
Mineral Resources and Mineral Reserves Comparison
Our mineral resources have not changed since the 2021 TRS. Our mineral reserves decreased by 3% to 457 million tonnes at December 31, 2022 compared to 469 million tonnes at December 31, 2021. Year-over-year changes are due to mining depletion.
REGULATION S-K 1300 INTERNAL CONTROLS DISCLOSURE
Qualified persons, including third parties and Mosaic employees, are responsible for estimating mineral resources and reserves. Mosaic has a Global Review Team, consisting of a broad spectrum of internal personnel outside the operating organization whose primary responsibilities include review of the mineral resources and reserves estimation reporting for compliance with SEC rules and regulations. The Global Review Team includes members from Mosaic’s accounting, finance, business units and legal departments. Reports prepared by qualified persons and third parties are reviewed at various levels of the Global Review Team before they are ultimately reviewed and approved by our senior leadership team. In future years, Mosaic expects to modify and streamline our S-K 1300 processes and internal controls.

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ITEM 3. LEGAL PROCEEDINGS
Item 3. Legal Proceedings.
We have included information about legal and environmental proceedings in Note 23 of our Notes to Consolidated Financial Statements. That information is incorporated herein by reference.
We are also subject to the following legal and environmental proceedings in addition to those described in Note 23 of our Consolidated Financial Statements included in this Form 10-K:
Countervailing Duty Petitions. In 2020, we filed petitions with the DOC and the ITC that requested the initiation of countervailing duty investigations into imports of phosphate fertilizers from Morocco and Russia. The purpose of the petitions was to remedy the distortions that we believe foreign subsidies have caused or are causing in the U.S. market for phosphate fertilizers, and thereby restore fair competition. On February 16, 2021, the DOC made final affirmative determinations that countervailable subsidies were being provided by those governments. On March 11, 2021, the ITC made final affirmative determinations that the U.S. phosphate fertilizer industry is materially injured by reason of subsidized phosphate fertilizer imports from Morocco and Russia. As a result of these determinations, the DOC issued countervailing duty orders on phosphate fertilizer imports from Russia and Morocco, which are scheduled to remain in place for at least five years. Currently, the cash deposit rates for such imports are approximately 20 percent for Moroccan producer OCP, 9 percent and 47 percent for Russian producers PhosAgro and Eurochem, respectively, and 17 percent for all other Russian producers. The final determinations in the DOC and ITC investigations are subject to challenge before U.S. federal courts and the World Trade Organization. Mosaic has initiated actions at the U.S. Court of International Trade contesting certain aspects of the DOC’s final determinations that, we believe, failed to capture the full extent of Moroccan and Russian phosphate fertilizer subsidies. Moroccan and Russian producers have also initiated U.S. Court of International Trade actions, seeking lower cash deposit rates and revocation of the countervailing duty orders. Further, the cash deposit rates and the amount of countervailing duties owed by importers on such imports could change based on the results of the litigation as well as DOC’s annual administrative review proceedings.
The South Pasture Extension Mine Litigation. On January 8, 2020, the Hardee County Mining Coordinator issued a Notice of Violation (“NOV”) for the failure by Mosaic to proceed with reclamation of two designated reclamation units within the South Pasture Mine footprint. These two reclamation units comprise 166 acres of mined lands. The NOV cites noncompliance with the County Land Development Regulations and with the conditions of Development of Regional Impact (“DRI”) Development Order 12-21 that was issued in 2012 to authorize continued mining at the South Pasture Mine, continued operation of the South Pasture beneficiation plant, and mining at the South Pasture Mine Extension. Through the NOV, the county requested that Mosaic submit a revised reclamation plan and schedule to demonstrate when initial reclamation activities would be completed for the two reclamation units identified in the NOV.
The delay in meeting the required reclamation schedule at the two reclamation units is tied to the idling and eventual shutdown of the Plant City fertilizer plant and the idling of the South Pasture Mine beneficiation plant. The Plant City Facility was first idled in late 2017. In June 2019, Mosaic announced that the Plant City Facility would be closed permanently.
Given the relationship between the Plant City fertilizer plant and the South Pasture beneficiation plant, and facing adverse market conditions, Mosaic idled the South Pasture beneficiation plant in September 2018. Idling that plant resulted in no tailings sand being produced by the processing of phosphate matrix. As a result, there was no tailings sand available for use in backfilling reclamation at the South Pasture Mine, and specifically, the two reclamation units identified in the county’s January 8, 2020 NOV.
On March 10, 2020, Mosaic filed an “Application for Waiver and Reclamation Schedule Extension” to secure Board of County Commissioners (“BOCC”) approval of extended reclamation deadlines for the South Pasture Mine. To obtain waiver relief from the BOCC, a quasi-judicial hearing would be required.
Extensive negotiations between Mosaic and county legal and technical staff resulted in an agreement that involved two separate but related actions: (1) secure a waiver and reclamation schedule extension through formal action by the BOCC at a quasi-judicial public hearing; and (2) enter into a settlement agreement that would require payment of a civil penalty by Mosaic for the non-compliance in meeting the required reclamation deadlines of the South Pasture Mine Development Order and the County Mining Ordinance. The settlement agreement would also be presented and acted upon at a formal public hearing before the BOCC.
On May 7, 2020, a quasi-public judicial hearing was held before the Hardee County BOCC. At that hearing, the BOCC voted unanimously to issue a waiver of the applicable reclamation deadlines of the South Pasture Development Order and the
county ordinance for three specific reclamation areas of the South Pasture Mine. The waiver also included a negotiated alternative reclamation schedule that extends the deadline for completion of reclamation until the end of 2023. At that same hearing, the BOCC approved a settlement agreement that resolved all outstanding non-compliance associated with reclamation obligations at the South Pasture Mine and required Mosaic to pay an agreed settlement amount of $249,000.
Mosaic has satisfied the payment obligation of the settlement agreement and continues to implement the alternative reclamation schedule, as required. Monitoring programs have been put in place to ensure continued compliance with the waiver and settlement agreement.
Cruz Litigation. On August 27, 2020, a putative class action complaint was filed in the Circuit Court of the Thirteenth Judicial Circuit in Hillsborough County, Florida against our wholly-owned subsidiary, Mosaic Global Operations Inc., and two unrelated co-defendants. The complaint alleges claims related to elevated levels of radiation at two manufactured housing communities located on reclaimed mining land in Mulberry, Polk County, Florida, allegedly due to phosphate mining and reclamation activities occurring decades ago. Plaintiffs seek monetary damages, including punitive damages, injunctive relief requiring remediation of their properties, and a medical monitoring program funded by the defendants. On October 14, 2021, the court substantially granted a motion to dismiss we filed late in 2020, with leave for the plaintiffs to amend their complaint.
On November 3, 2021, plaintiffs filed an amended complaint and in response, Mosaic filed a motion to dismiss that complaint with prejudice on November 15, 2021. On December 23, 2021, plaintiffs opposed that motion and Mosaic replied to that opposition on January 26, 2022. On April 6, 2022, the court heard argument on the motions to dismiss filed by Mosaic and each other co-defendant.
We intend to continue to vigorously defend this matter.
Faustina Plant Risk Management Plan. On September 14, 2022, EPA Region 6 issued a Notice of Potential Violation and Opportunity to Confer (“NOPVOC”) regarding compliance of our Faustina Plant with Section 112(r) of the Federal Clean Air Act and 40 C.F.R. Part 68, commonly known as the Risk Management Plan Rule (“RMP Rule”). The NOPVOC relates to a compliance evaluation inspection conducted by EPA at the Faustina Plant from February 22-25, 2022 and alleges violations of the RMP Rule. We conferred with the EPA regarding the allegations in the NOPVOC on November 30, 2022. The EPA provided a penalty calculation on January 19, 2023 which we are reviewing. We intend to continue discussions with the agency.

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ITEM 4. MINE SAFETY DISCLOSURE
Item 4. Mine Safety Disclosures.
Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95 to this report.
PART II.

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
We have included information about the market price of, dividends on and the number of holders of our common stock under “Quarterly Results (Unaudited)” in the financial information that is incorporated by reference in this Form 10-K in Part II, Item 8, “Financial Statements and Supplementary Data”.
The principal stock exchange on which our common stock is traded is The New York Stock Exchange under the symbol “MOS”.
The following provides information related to equity compensation plans:
Plan category Number of shares to be
issued upon exercise of
outstanding options,
warrants and rights (a)
Weighted-average
exercise price of
outstanding options,
warrants and rights (b)
Number of shares remaining
available for future issuance
under equity compensation plans
(excluding shares reflected
in first column)
Equity compensation plans approved by stockholders 6,369,391 $ 36.12 10,490,759
Equity compensation plans not approved by stockholders - - -
Total 6,369,391 $ 36.12 10,490,759
______________________________
(a)Includes grants of 651,456 stock options, 2,152,495 time-based restricted stock units and 3,565,440 total stockholder return (“TSR”) performance units settled in stock. The total does not include cash-settled TSR performance units. For purposes of the table above, the number of shares to be issued under a performance unit award reflects the maximum number of shares of our common stock that may be issued pursuant to such performance award. The actual number of shares to be issued under a TSR performance unit award will depend on the change in the market price of our common stock over a three-year vesting period, with no shares issued if the market price of a share of our common stock at the vesting date plus dividends thereon is less than 50% of its market price on the date of grant and the maximum number issued only if the market price of a share of our common stock at the vesting date plus dividends thereon is at least twice its market price on the date of grant.
(b)Includes weighted average exercise price of stock options only.
Pursuant to our equity compensation plans, we have granted and may in the future grant employee stock options to purchase shares of common stock of Mosaic for which the purchase price may be paid by means of delivery to us by the optionee of shares of common stock of Mosaic that are already owned by the optionee (at a value equal to market value on the date of the option exercise). During the period covered by this report, no options to purchase shares of common stock of Mosaic were exercised for which the purchase price was so paid.
The following table sets forth information with respect to shares of our Common Stock that we purchased during the quarter ended December 31, 2022 under the $2.0 billion share repurchase program authorized by our Board of Directors in the third quarter of 2022:
Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of a publicly announced program Maximum approximate dollar value of shares that may yet be purchased under the program(a)
Common Stock
October 1, 2022- October 31, 2022 - $ - - $ 1,979,868,011
November 1, 2022- November 30, 2022 - - - 1,979,868,011
December 1, 2022- December 31, 2022 1,409,611 45.45 1,409,611 1,915,799,008
Total 1,409,611 $ 45.45 1,409,611 $ 1,915,799,008
(a) At the end of the month shown.

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ITEM 6. SELECTED FINANCIAL DATA
Item 6. Reserved.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The Management’s Discussion and Analysis of Financial Condition and Results of Operations listed in the Financial Table of Contents included in this report is incorporated herein by reference.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
We have included a discussion about market risks under “Market Risk” in the Management’s Analysis that is included in this report in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. This information is incorporated herein by reference.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Item 8. Financial Statements and Supplementary Data.
Our Consolidated Financial Statements, the Notes to Consolidated Financial Statements, the report of our Independent Registered Public Accounting Firm, and the information under “Quarterly Results” listed in the Financial Table of Contents included in this report are incorporated herein by reference. All other schedules for which provision is made in the applicable accounting regulation of the SEC are not required under the related instructions or are inapplicable, and therefore, have been omitted.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures.
None.

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ITEM 9A. CONTROLS AND PROCEDURES
Item 9A. Controls and Procedures.
(a)Disclosure Controls and Procedures
We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in our filings under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (ii) accumulated and communicated to management, including our principal executive officer and our principal financial officer, to allow timely decisions regarding required disclosures. Our management, with the participation of our principal executive officer and our principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Form 10-K. Our principal executive officer and our principal financial officer have concluded, based on such evaluations, that our disclosure controls and procedures were effective for the purpose for which they were designed as of the end of such period.
(b)Management’s Report on Internal Control Over Financial Reporting
We have included management’s report on internal control over financial reporting under “Management’s Report on Internal Control Over Financial Reporting” listed in the Financial Table of Contents included in this Form 10-K.
We have included our registered public accounting firm’s attestation report on our internal controls over financial reporting under “Report of Independent Registered Public Accounting Firm” listed in the Financial Table of Contents included in this Form 10-K.
This information is incorporated herein by reference.
(c)Changes in Internal Control Over Financial Reporting
Our management, with the participation of our principal executive officer and our principal financial officer, has evaluated any change in internal control over financial reporting that occurred during the quarter ended December 31, 2022 in accordance with the requirements of Rule 13a-15(d) promulgated by the SEC under the Exchange Act. There were no changes in internal control over financial reporting identified in connection with management’s evaluation that occurred during the quarter ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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ITEM 9B. OTHER INFORMATION
Item 9B. Other Information.
None.
PART III.

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Item 10. Directors, Executive Officers and Corporate Governance.
The information contained under the headings “Proposal No. 1-Election of Directors,” “Corporate Governance-Committees of the Board of Directors,” “ Beneficial Ownership of Securities,” and“Delinquent Section 16 Reports” included in our definitive proxy statement for our 2023 annual meeting of stockholders and the information contained under “Information About our Executive Officers” in Part I, Item 1, “Business,” in this report is incorporated herein by reference.
We have a Code of Business Conduct and Ethics within the meaning of Item 406 of Regulation S-K adopted by the SEC under the Exchange Act that applies to our principal executive officer, principal financial officer and principal accounting officer. Our Code of Business Conduct and Ethics is available on Mosaic’s website (www.mosaicco.com) and we intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding any amendment to, or waiver from, a provision of our code of ethics by posting such information on our website. The information contained on Mosaic’s website is not being incorporated herein.

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ITEM 11. EXECUTIVE COMPENSATION
Item 11. Executive Compensation.
The information under the headings “Director Compensation” and “Executive Compensation” included in our definitive proxy statement for our 2023 annual meeting of stockholders is incorporated herein by reference.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The information under the headings “Beneficial Ownership of Securities” and “Certain Relationships and Related Transactions” included in our definitive proxy statement for our 2023 annual meeting of stockholders is incorporated herein by reference. The table containing information related to equity compensation plans set forth in Part II, Item 5 “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” of this report is also incorporated herein by reference.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Item 13. Certain Relationships and Related Transactions, and Director Independence.
The information under the headings “Corporate Governance-Board Independence,” “Corporate Governance-Committees of the Board of Directors,” “Corporate Governance-Other Policies Relating to the Board of Directors-Policy and Procedures Regarding Transactions with Related Persons,” and “Certain Relationships and Related Transactions” included in our definitive proxy statement for our 2023 annual meeting of stockholders is incorporated herein by reference.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Item 14. Principal Accounting Fees and Services.
Our independent registered public accounting firm is KPMG LLP, Tampa, FL, Auditor Firm ID: 185.
The information included under “Audit Committee Report and Payment of Fees to Independent Registered Public Accounting Firm-Fees Paid to Independent Registered Public Accounting Firm” and “Audit Committee Report and Payment of Fees to Independent Registered Public Accounting Firm-Pre-approval of Independent Registered Public Accounting Firm Services” is included in our definitive proxy statement for our 2023 annual meeting of stockholders is incorporated herein by reference.
PART IV.

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Item 15. Exhibits and Financial Statement Schedules.
(a) (1) Consolidated Financial Statements filed as part of this report are listed in the Financial Table of Contents included in this report and incorporated by reference in this report in Part II, Item 8, “Financial Statements and Supplementary Data”.
(2) All schedules for which provision is made in the applicable accounting regulations of the SEC are listed in this report in Part II, Item 8, “Financial Statements and Supplementary Data”.
(3) Reference is made to the Exhibit Index in (b) below.
(b) Exhibits
Exhibit No. Description Incorporated Herein by
Reference to Filed with
Electronic
Submission
2.i. Agreement and Plan of Merger and Contribution, dated as of January 26, 2004, by and among IMC Global Inc. (now known as Mosaic Global Holdings Inc.), Global Nutrition Solutions, Inc. (now known as The Mosaic Company (“Mosaic”), as successor by merger to MOS Holdings Inc. (“MOS Holdings”)), GNS Acquisition Corp., Cargill, Incorporated (“Cargill”) and Cargill Fertilizer, Inc., as amended by Amendment No. 1 to Agreement and Plan of Merger and Contribution, dated as of June 15, 2004, and as further amended by Amendment No. 2 to Agreement and Plan of Merger and Contribution, dated as of October 18, 2004 (1)
Exhibit 2.1 to Mosaic’s Current Report on Form 8-K dated October 22, 2004, and filed on October 28, 2004(2)
3.i. Restated Certificate of Incorporation of Mosaic, effective May 19, 2016
Exhibit 3.i to Mosaic’s Current Report on Form 8-K dated May 19, 2016 and filed on May 23, 2016(2)
3.ii. Amended and Restated Bylaws of Mosaic, effective March 5, 2020
Exhibit 3.1 to Mosaic’s Current Report on Form 8-K dated March 5, 2020 and filed on March 6, 2020(2)
4.i Credit Agreement dated as of August 19, 2021, among Mosaic, Bank of America, N.A., as administrative agent, Swing Line Lender and an L/C Issuer, and the lenders and other L/D Issuers party thereto
Exhibit 4.i to Mosaic’s Current Report on Form 8-K dated August 23, 2021 and filed on August 23, 2021(2)
4.ii. Indenture dated as of October 24, 2011, between Mosaic and U.S. Bank National Association, as trustee.
Registrant hereby agrees to furnish to the Commission, upon request, all other instruments defining the rights of holders of each issue of long-term debt of the Registrant and its consolidated subsidiaries
Exhibit 4.1 to Mosaic’s Current Report on Form 8-K dated October 24, 2011 and filed on October 24, 2011(2)
4.iii Description of Registrant’s Common Stock
Exhibit 4.iii to Mosaic’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019
10.ii.a Time Charter dated as of October 24, 2017 between Tampa Port Services, LLC and Savage Harvest Operations, LLC
Exhibit 10.1 to Mosaic’s Current Report on Form 8-K dated October 24, 2017 and filed on October 30, 2017
10.ii.b Guaranty dated as of October 24, 2017 by The Mosaic Company
Exhibit 10.2 to Mosaic’s Current Report on Form 8-K dated October 24, 2017 and filed on October 30, 2017
10.iii.a.(3)
The Mosaic Company 2004 Omnibus Stock and Incentive Plan (the “Omnibus Incentive Plan”), as amended October 8, 2009
Appendix A to Mosaic’s Proxy Statement dated August 25, 2009(2)
10.iii.a.1(3)
Form of Amendment dated May 11, 2011, to the Omnibus Incentive Plan
Exhibit 10.iii.u. to Mosaic’s Annual Report on Form 10-K for the Fiscal Year ended May 31, 2011(2)
10.iii.a.2(3)
Form of Employee Nonqualified Stock Option Award Agreement under the Omnibus Incentive Plan, approved July 20, 2011
Exhibit 10.iii.b. to Mosaic’s Quarterly Report on Form 10-Q for the Quarterly Period ended August 31, 2011(2)
10.iii.b(3)
Description of Mosaic Management Incentive Program
X
10.iii.c.1(3)
Mosaic Nonqualified Deferred Compensation Plan, as amended and restated effective October 9, 2008
Exhibit 10.iii.b. to Mosaic’s Quarterly Report on Form 10-Q for the Quarterly Period ended November 30, 2008(2)
10.iii.c.2(3)
Amendment dated April 13, 2011, to the Mosaic Nonqualified Deferred Compensation Plan, as amended and restated effective October 9, 2008
Exhibit 10.iii.r. to Mosaic’s Annual Report on Form 10-K for the Fiscal Year ended May 31, 2011(2)
10.iii.c.3(3)
Mosaic LTI Deferral Plan, approved March 5, 2015
Exhibit 10.1 to Mosaic’s Current Report on Form 8-K dated March 5, 2015 and filed on March 11, 2015(2)
10.iii.c.4(3)
Amendment to Mosaic LTI Deferral Plan, approved March 1, 2017
Exhibit 10.iii.c.4 to Mosaic’s Quarterly Report on Form 10-Q for the Quarterly Period ended March 31, 2017(2)
10.iii.c.5(3)
Amendment dated December 20, 2018, to the Mosaic Nonqualified Deferred Compensation Plan, as amended and restated effective October 9, 2008.
Exhibit 10.iii.c.5 to Mosaic’s Annual Report on Form 10-K for the Fiscal Year ended December 31, 2018
10.iii.c.6(3)
Amendment dated December 16, 2020, to the Mosaic Nonqualified Deferred Compensation Plan, as amended and restated effective October 9, 2008
Exhibit 10.iii.c.6 to Mosaic’s Annual Report on Form 10-K for the Fiscal Year ended December 31, 2020
10.iii.d.1(3)
Form of Senior Management Severance and Change in Control Agreement effective April 1, 2020
Exhibit 10.iii.d to Mosaic’s Quarterly Report on Form 10-Q for the Quarterly Period ended March 31, 2020
10.iii.d.2 Form of Non-Competition, Non-Solicitation, Non-Defamation and Confidentiality Agreement effective April 1, 2020
Exhibit 10.iii.d.2. to Mosaic’s Annual Report on Form 10-K of Mosaic for the fiscal year ended December 31, 2022(2)
10.iii.d.3(3)
Form of expatriate agreement dated November 1, 2019 between Mosaic and an executive officer
Exhibit 10.1 to Mosaic’s Current Report on Form 8-K dated October 31, 2019 and filed on November 4, 2019
10.iii.d.4(3)
Form of expatriate agreement dated January 8, 2016, between Mosaic and an executive officer
Exhibit 10.iii.d to Mosaic’s Quarterly Report on Form 10-Q for the Quarterly Period ended March 31, 2022
10.iii.e.1(3)
Agreement between Cargill and Mosaic relating to certain former Cargill employees’ participation in the Cargill International Pension Plan
Exhibit 10.iii.b. to Mosaic’s Quarterly Report on Form 10-Q for the Quarterly Period ended August 31, 2012(2)
10.iii.e.2(3)
Form of Supplemental Agreement between Mosaic and certain former participants in the Cargill International Pension Plan
Exhibit 10.iii.x. to Mosaic’s Annual Report on Form 10-K of Mosaic for the fiscal year ended May 31, 2013(2)
10.iii.f.(3)
Form of Indemnification Agreement between Mosaic and its directors and executive officers
Exhibit 10.iii. to Mosaic’s Current Report on Form 8-K dated October 8, 2008, and filed on October 14, 2008(2)
10.iii.g.(3)
Summary of Board of Director Compensation of Mosaic
Exhibit 10.iii.a. to Mosaic’s Quarterly Report on Form 10-Q for the Quarterly Period ended June 30, 2022
10.iii.h.(3)
Executive Perquisite Program
The material under “Compensation Discussion and Analysis-Other Executive Compensation Arrangements, Policies and Practices-Perquisites” in Mosaic’s Proxy Statement dated April 6, 2022
10.iii.i.(3)
The Mosaic Company 2014 Stock and Incentive Plan (the “2014 Incentive Plan”)
Appendix B to Mosaic’s Proxy Statement dated April 2, 2014(2)
10.iii.j.(3)
Form of Amendment dated August 14, 2019, to the 2014 Incentive Plan
Exhibit 10.iii.j to Mosaic’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019
10.iii.k.1(3)
Form of Non-Qualified Stock Option Award Agreement under the 2014 Incentive Plan, approved March 5, 2015
Exhibit 10.iii.a. to Mosaic’s Quarterly Report on Form 10-Q for the Quarterly Period ended March 31, 2015(2)
10.iii.k.2(3)
Form of Non-Qualified Stock Option Award Agreement under the 2014 Incentive Plan, approved March 2, 2016
Exhibit 10.iii.a. to Mosaic’s Quarterly Report on Form 10-Q for the Quarterly Period ended March 31, 2016(2)
10.iii.k.3(3)
Form of Employee Restricted Stock Unit Award Agreement under the 2014 Incentive Plan, approved March 2, 2016
Exhibit 10.iii.e. to Mosaic’s Quarterly Report on Form 10-Q for the Quarterly Period ended March 31, 2016(2)
10.iii.k.4(3)
Form of Director Restricted Stock Unit Award Agreement under the 2014 Incentive Plan, approved May 19, 2016
Exhibit 10.iii.kk to Mosaic’s Quarterly Report on Form 10-Q for the Quarterly Period Ended June 30, 2016(2)
10.iii.k.5(3)
Form of Employee TSR Performance Unit Award Agreement under the 2014 Incentive Plan, approved March 1, 2017
Exhibit 10.iii.k.1 to Mosaic’s Quarterly Report on Form 10-Q for the Quarterly Period ended March 31, 2017(2)
10.iii.k.6(3)
Form of Executive TSR Performance Unit Award Agreement under the 2014 Incentive Plan, approved March 1, 2017
Exhibit 10.iii.k.2 to Mosaic’s Quarterly Report on Form 10-Q for the Quarterly Period ended March 31, 2017(2)
10.iii.k.7(3)
Form of Retention Award Agreement under the 2014 Incentive Plan, approved October 31, 2019
Exhibit 10.2 to Mosaic’s Current Report on Form 8-K dated October 31, 2019 and filed on November 4, 2019
10.iii.k.8(3)
Form of Executive TSR Cash Settled Performance Unit Award Agreement under the 2014 Incentive Plan, approved March 6, 2019
Exhibit 10.iii.k.11 to Mosaic’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019
10.iii.k.9(3)
Form of Restricted Stock Unit Award Agreement under the 2014 Incentive Plan approved March 4, 2020
Exhibit 10.iii.a to Mosaic’s Quarterly Report on Form 10-Q for the Quarterly Period ended March 31, 2020
10.iii.k.10(3)
Form of Executive TSR Stock Settled Performance Unit Award Agreement under the 2014 Incentive Plan, approved March 4, 2020
Exhibit 10.iii.b to Mosaic’s Quarterly Report on Form 10-Q for the Quarterly Period ended March 31, 2020
10.iii.k.11(3)
Form of Executive TSR Cash Settled Performance Unit Award Agreement under the 2014 Incentive Plan, approved March 4, 2020
Exhibit 10.iii.c to Mosaic’s Quarterly Report on Form 10-Q for the Quarterly Period ended March 31, 2020
10.iii.k.12(3)
Form of Director Restricted Stock Unit Award Agreement under The Mosaic Company 2014 Stock and Incentive Plan, as amended, approved May 19, 2022
Exhibit 10.iii.k to Mosaic's quarterly report on Form 10-Q for the Quarterly Period Ended June 30, 2022
10.v.a Consent Decree dated September 30, 2015 among the United States of America, the Florida Department of Environmental Protection, Mosaic Fertilizer, LLC and The Mosaic Company(4)
Exhibit 10.1. to Mosaic’s Current Report on Form 8-K dated September 30, 2015 and filed on October 6, 2015(2)
10.v.b Description of Modifications to Consent Decree dated September 30, 2015 among the United States of America, the Florida Department of Environmental Protection, Mosaic Fertilizer, LLC and The Mosaic Company, filed as Exhibit 10.1 to the Current Report on Form 8-K of Mosaic dated September 30, 2015 and filed on October 6, 2015
Exhibit 10.v.i to Mosaic’s Quarterly Report on Form 10-Q for the Quarterly Period Ended June 30, 2016(2)
10.v.c Consent Decree dated September 30, 2015 among the United States of America, the Louisiana Department of Environmental Quality, Mosaic Fertilizer, LLC and The Mosaic Company(4)
Exhibit 10.2. to Mosaic’s Current Report on Form 8-K dated September 30, 2015 and filed on October 6, 2015(2)
10.v.d Description of Modifications to Consent Decree dated September 30, 2015 among the United States of America, the Louisiana Department of Environmental Quality, Mosaic Fertilizer, LLC and The Mosaic Company, filed as Exhibit 10.2 to the Current Report on Form 8-K of Mosaic dated September 30, 2015 and filed on October 6, 2015
Exhibit 10.v.ii to Mosaic’s Quarterly Report on Form 10-Q for the Quarterly Period Ended June 30, 2016(2)
21 Subsidiaries of the Registrant
X
23.1 Consent of KPMG LLP, independent registered public accounting firm for Mosaic
X
23.2 Florida Phosphate Mining Consent of Qualified Persons
X
24 Power of Attorney
X
31.1 Certification of Chief Executive Officer Required by Rule 13a-14(a)
X
31.2 Certification of Chief Financial Officer Required by Rule 13a-14(a)
X
32.1 Certification of Chief Executive Officer Required by Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code
X
32.2 Certification of Chief Financial Officer Required by Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code
X
95 Mine Safety Disclosures
X
96.1 Florida Phosphate Mining Technical Report Summary
X
101 The following materials from the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 formatted in Inline Extensible Business Reporting Language: (i) the Consolidated Statements of Earnings, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Equity, and (vi) Notes to Consolidated Financial Statements. X
104 Cover Page Interactive Data File (embedded within the iXBRL document and contained in Exhibit 101). X
(c) Summarized financial information of 50% or less owned persons is included in Note 9 of Notes to Consolidated Financial Statements. Financial statements and schedules are omitted as none of such persons are significant under the tests specified in Regulation S-X under Article 3.09 of general instructions to the financial statements.
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(1) Mosaic agrees to furnish supplementally to the SEC a copy of any omitted schedules and exhibits to the extent required by rules of the Commission upon request.
(2) SEC File No. 001-32327.
(3) Denotes management contract or compensatory plan.
(4) Confidential information has been omitted from this Exhibit and filed separately with the SEC pursuant to a confidential treatment request under Rule 24b-2 of the Exchange Act.