News And Updates
Published By: Sun Herald
OUR POSITION: Opportunity lost with Mosaic settlement should be revisited by Sarasota County.
2007 was a banner year for Mosaic fertilizer. Its stock price soared 342 percent, the biggest gain among large-cap issues, revenues in its most recent quarter were up 55% to $2 billion, its production costs were down and its product prices were up.
Two weeks into the new year, the news keeps getting better. The stock is staging another rally, climbing from $94.34 at year's end to 103.65 at midday Monday. The company expects fertilizer prices to climb another 15 percent this year, after more than doubling in 2007.
We don't usually engage in market analysis in this space, but investors who are only now climbing on the Mosaic bandwagon have a lot in common with area counties. Both missed out on a landmark opportunity. Unlike investors, though, we think Charlotte and Sarasota counties will continue to pay for their inability to reach a global litigation settlement with Mosaic.
It's hard to blame the Charlotte County Commission for this failure. The board voted 4-1 to approve the settlement of mining challenges in exchange for stricter regulation, restrictions on mining certain areas (especially near Peace River tributaries), water reservoir land and broad oversight of mining operations.
It was the Sarasota County Commission that rejected the settlement, despite its Johnny-come-lately role in phosphate litigation that cost its smaller neighbor more than $14 million in legal fees and research costs.
But all parties, including Mosaic and the Peace River/Manasota Regional Water Supply Authority, whose staff provided diligent legal and scientific expertise during the negotiations, bear responsibility for the failure. The Sarasota decision, which was never going to be more decisive than 3-2 in either direction, seemed to hinge on lingering doubt about the effect of the settlement rather than its ultimate goal. In other words, despite months of legal wrangling and wordsmithing, the parties failed to create a document that clearly said the following: phosphate mining in the Peace River Watershed will take place under the best worldwide management practices known at the time, with the least possible impact on the flow, timing or quality of water.
That said, the Sarasota County vote was the sporting equivalent of snatching defeat from the jaws of victory. Years of litigation by Charlotte County and later the authority (of which Sarasota County is a member) had produced some minor victories, tighter permitting standards and hefty fees, but most importantly it convinced Mosaic it would be better served by meeting the demands of downstream counties than by fighting dozens of skirmishes along the way. We won.
It's not too late. Mosaic is in a position to be both generous and humble. Any negotiation requires committed parties acting in good faith. We understand Mosaic must overcome significant public skepticism on the latter point, but we believe they are committed to a "good neighbor" policy. They didn't have to come to the table. Litigation is an acceptable cost of business in many controversial businesses. The lack of success at the negotiating table had no discernable effect on its profits or stock price last year.
But that failure left the Peace River Watershed with less protection than the settlement would have provided. We encourage all sides to return to the table, more committed than ever to a common goal that acknowledges the inescapable reality that phosphate mining will occur, but that millions of Floridians demand that the Peace River and its tributaries be protected more than the have in the past.