What changed in this filing

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Item 1. Legal Proceedings

2024-05-02 compared with 2023-11-08 · 32 added, 31 removed, 31 unchanged (67% of the section changed)

4 unchanged sentences

Countervailing Duty Orders .

Countervailing Duty Orders.

In April 2021, the U.S.

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Moroccan and Russian producers have initiated actions at the U.S.

Court of International Trade (“CIT”) seeking to overturn the orders.

Court of International Trade (“ CIT ”) and the U.S.

Court of Appeals for the Federal Circuit (“ CAFC ”) seeking to overturn the orders.

Mosaic has also made claims contesting certain aspects of DOC’s final determinations that, we believe, failed to capture the full extent of Moroccan and Russian subsidies.

These litigation challenges remain underway.

Most recently, in July and September 2023, the CIT issued three remand rulings – one addressing DOC’s determination in the CVD investigation of phosphate fertilizers from Russia, one addressing DOC’s determination in the CVD investigation of phosphate fertilizers from Morocco, and one addressing the U.S.

International Trade Commission’s determination in antidumping and countervailing duty investigations of phosphate fertilizers from Russia and Morocco – instructing the agencies to reconsider certain aspects of the rulings that were the basis for issuing the CVD orders.

In January 2024, DOC and the ITC issued revised determinations on remand from the CIT, upholding their original determinations that Moroccan phosphate fertilizer is unfairly subsidized, and that Moroccan and Russian imports materially injure the U.S.

industry, respectively.

The CIT is now reviewing these remand determinations.

Also in January 2024, the CIT issued a ruling affirming DOC’s original determinations that Russian phosphate fertilizer is unfairly subsidized.

Russian producers appealed this ruling to the CAFC.

When a CVD order is in place, DOC normally conducts annual administrative reviews, which establish a final CVD assessment rate for past imports during a defined period, and a CVD cash deposit rate for future imports.

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DOC calculated new subsidy rates of 2.12% for Moroccan producer OCP and 28.50% for Russian producer PhosAgro.

These determinations are subject to appeal to the CIT.

DOC is also conducting administrative reviews covering the period January 1, 2022 to December 31, 2022.

Commerce did not change the preexisting cash deposit rates for Russian producer EuroChem (47.05%) or all other Russian producers (17.20%).

Mosaic, foreign producers, and a U.S.

importer have appealed the final results of DOC’s first administrative reviews to the CIT.

DOC is also conducting a second set of administrative reviews covering the period January 1, 2022 to December 31, 2022.

DOC will likely issue the final results of the second administrative reviews by Q4 2024.

In addition, in April 2024, Mosaic and another party requested a third set of administrative reviews covering the period January 1, 2023 to December 31, 2023.

The applicable final CVD assessment rates and cash deposit rates for imports of phosphate fertilizer from Morocco and Russia could change as a result of these various proceedings and potential associated appeals, whether in federal courts or at the World Trade Organization.

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.

The South Pasture Mine – Hardee County Enforcement Action .

On January 8, 2020, Hardee County issued a Notice of Violation (“ NOV ”) for Mosaic’s delay in meeting the required reclamation schedule for two designated reclamation units within the South Pasture Mine.

The delay resulted from idling the South Pasture beneficiation plant in 2018;

because the plant was idled, no sand was available for reclamation activities.

Acting on Mosaic’s “Application for Waiver and Reclamation Schedule Extension,” in May 2020, the Hardee County Board of County Commissioners approved:

(1) a waiver of the applicable reclamation deadlines of the South Pasture Development Order and Land Development Code;

(2) an alternative reclamation schedule;

and (3) a settlement agreement that resolved the NOV.

Mosaic timely paid the civil penalty required by the settlement agreement and continues to implement the approved alternative reclamation schedule, as required.

Monitoring programs are 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.

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.

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We conferred with the EPA regarding the allegations in the NOPVOC on November 30, 2022.

We are continuing discussions with the agency regarding settlement, including negotiation of a consent agreement and final order.

We negotiated a Consent Agreement and Final Order (“ CAFO ”) with the agency that was filed on January 30, 2024.

As required by the CAFO, we paid a penalty in the amount of $217,085.

The CAFO also requires the completion of two supplemental environmental projects:

(1) installation of ammonia monitors and monitoring at the plant for a period of two years, and (2) donation of two generators to the St.

James Parish Department of Emergency Preparedness.

We completed the donation to the St.

James Parish Department of Emergency Preparedness on March 14, 2024.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Legal Proceedings