Mosaic closer to solving brine inflows

The Mosaic Co, using 3D seismic testing and also through visual confirmation, has located the source of the inflow in old workings of its K2 potash mine at Esterhazy, Saskatchewan, Canada. The company has completed installation of four strategically located wells where calcium chloride can be injected, and further intends to install several additional injection wells over the next few weeks, as necessary. "We’ve successfully pinpointed the source of the brine inflow at Esterhazy. Data obtained after our injection of calcium chloride over the past ten days shows a slow but upward trend in brine pressure. Based on our prior experiences, this data suggests that our mitigation efforts are working and should result in an initially modest but continuous decline in the inflow rate," James T. Prokopanko, President and CEO said on February 12. "We are cautiously optimistic and will continue our aggressive mitigation efforts at Esterhazy. While we would like to remediate the issue immediately, it could take several weeks before significant progress can be made in treating the inflow."

The company’s data indicates that the current inflow is approximately at the rate of 20,000 to 25,000 gallons per minute, which is consistent with its prior estimates. Mosaic is currently pumping some 6,000 gallons per minute above ground and is progressing well on plans to increase pumping capacities. Costs incurred by Mosaic in addressing the Esterhazy brine inflow, which was first identified in December 2006, are expected to be in the range of $30 to $40 million for the fiscal year ending May 31, 2007. The cmpany anticipates that a majority of the expenditures will be capitalized.

Mosaic began to experience salt saturated brine inflows at Esterhazy in 1985 and has been managing brine inflow areas as part of its ongoing operations for the past two decades. Without abatement, and assuming current estimates to be accurate, the company has storage capacity to handle the inflow for several months without adversely affecting production at Esterhazy. The recently identified brine inflow has not had any current impact on Mosaic’s potash production at the Esterhazy facilities.