Phosphates and potash miner Mosaic has restarted the Colonsay potash mine to mitigate the short-term impact of reduced output related to the planned summer maintenance at the Esterhazy potash complex, in Saskatchewan.
Production at the 1.3-million-tonne-a-year Colonsay was curtailed in December last year, owing to challenging market conditions at the time.
During the second quarter, potash production was 1.9-million tonnes, down from 2.4-million tonnes in the prior year period, reflecting the impact of idled production at Colonsay.
Sales volumes totalled 2.2-million tonnes, down from 2.3-million tonnes in the prior-year quarter.
Sales volumes in the third quarter are expected to be in the range of 2.1-million to 2.3-million tonnes.
Mosaic expects realised mine-gate MOP prices in the range of $250/t to $300/t.
Production of finished phosphates totalled 1.7-million tonnes, up 1% year-on-year, and sales volumes totalled 1.9-million tonnes, up 15% year-on-year, driven by strong demand in North America.
“The investments we've made in our business over the last decade are yielding results,” said president and CEO Joc O’Rourke.
“Our Esterhazy potash complex is now the largest in the world and our Fertilizantes business, in Brazil, accounts for nearly a quarter of all fertiliser sales in one of the most dynamic markets in the world.”
During the second quarter, total nameplate capacity at the Esterhazy operations was independently validated by a third party to be 7.8-million tonnes.
In its market outlook, Mosaic states that supply constraints for both potash and phosphates remain. In potash, the firm expects 2023 shipments from Belarus to be down five-million to six-million tonnes from pre-sanction export rates, while North American potash exports are limited by constraints at western ports.
In phosphates, China's exports are expected to see only a modest recovery from the lows in 2022, but remain well below shipments seen in 2021.
"In both phosphates and potash, the fundamental tightness in global markets is expected to persist through 2023 and likely beyond,” Mosaic notes.
Second-quarter revenues totalled $3.4-billion, down 37% from the year-ago period, reflecting the impact of lower selling prices. The gross margin rate in the second quarter was 16.8%, down from 34.4%in the year-ago period.
Net income in the second quarter totalled $369-million, compared with $1-billion in the year ago period.
