The potash will keep flowing to Saskatchewan fertilizer firm PotashCorp from a U.S. rival’s mine in the province until a court sorts out whether a supply deal between the two companies has already ended.
Minneapolis-based Mosaic Co. said Thursday it has been ordered by Saskatchewan’s Court of Queen’s Bench to keep supplying PotashCorp with potash from the Mosaic mine at Esterhazy, Sask., as per the terms of a tolling agreement which Mosaic claims was concluded in May.
Mosaic, formed in 2004 from the fertilizer businesses of Cargill and IMC Global, said in May that over the past 40 years it and its heritage companies have supplied potash at cost from Esterhazy on demand from PotashCorp.
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During that time, Mosaic said, PotashCorp “has requested and received substantially more potash” than has been mined from the reserves allocated to PotashCorp within the Esterhazy mine.
PotashCorp’s requests, which Mosaic said have recently been as much as a million tonnes per year, have thus been met from Mosaic’s own reserves, the U.S. firm said, now contending it has “no further obligation” to deliver anything other than PotashCorp’s remaining inventory.
Mosaic said in May it would stop shipments to the Saskatoon company effective July 1.
However, Mosaic said Thursday, PotashCorp “disputes Mosaic’s determination as to when Mosaic’s obligation to provide potash to (PotashCorp) from the Esterhazy mine expires.”
Last week’s Queen’s Bench ruling “did not address the merits of any claims in the pending lawsuit between PCS and Mosaic,” the U.S. company said.
The court order requires Mosaic to continue supplying PotashCorp from the Esterhazy mine until the matter can be heard at trial, now booked to begin in January 2012.
Mosaic reiterated Thursday that it believes PotashCorp’s claims in the lawsuit “are without merit.”
