Mosaic’s Radioactive Sinkhole Problem Could Mean Mine Delaysby
Leak wasn’t publicly disclosed until two weeks after discovery
Mosaic says 45-feet-wide sinkhole has reached Floridan aquifer
As the world’s largest producer of phosphate fertilizer, Mosaic Co. is used to digging up parts of Florida to recover the mineral. But lately, one particular hole is causing the company some headaches.
A sinkhole 45 feet (14 meters) wide has opened up in a pile of mining waste at the company’s New Wales site in Polk County, about 30 miles east of downtown Tampa, swallowing about 215 million gallons of radioactive wastewater -- enough to fill about 326 Olympic-sized swimming pools. Mosaic says it believes the sinkhole has reached the Floridan aquifer, which provides the local community’s water supply.
While Mosaic first noticed the problem in late August, it didn’t make a public announcement until Sept. 15. Three local residents are now suing the company, alleging improper storage of chemical waste. The spill could mean increased hurdles for Mosaic’s expansion plans in Florida, according to Jonas Oxgaard, a New York-based analyst at Sanford C. Bernstein & Co.
“Mosaic should have really disclosed this when they found out about it,” said Chris Damas, an analyst at BCMI Research in Barrie, Ontario, who advised his clients to sell Mosaic shares after news of the sinkhole broke. “Investors are really going to feel less trusting that Mosaic is being forthcoming with their environmental liabilities.”
Plymouth, Minnesota-based Mosaic said it discovered the loss of water on Aug. 27. The pool of water that drained away had sat atop a stack of phosphogypsum, a type of waste from processing phosphate rock, which, according to the U.S. Environmental Protection Agency, emits a radioactive gas and contains uranium and radium. The company said a preliminary estimate for the cost of repairing the sinkhole is as much as $50 million.
While the company contacted state and federal environmental officials and took immediate steps to pump out water from the sinkhole, Mosaic regrets and apologizes “for not providing information sooner,” Walter Precourt, the company’s senior vice president for phosphates, told the Polk County Commission last week.
Florida Governor Rick Scott is directing the state’s Department of Environmental Protection to issue an emergency rule that requires immediate public notification of pollution incidents, he said Monday in a statement.
“A lot of people are very upset they didn’t tell anyone there was this massive release of radioactive wastewater into the aquifer where we get our drinking water from," said Bradley Marshall, a lawyer with Earthjustice in Tallahassee, Florida. "That is not water you would want to be drinking."
Mosaic maintains the contaminated water is contained on its property, as water within the aquifer in the vicinity of the New Wales facility generally moves west at a pace of about 1,000 feet per month, it said in a statement. The nearest private drinking well is about three miles away from the site. Ongoing monitoring indicates the affected water is contained and there’s no indication of a threat to that well, according to a Sept. 23 statement from the Florida Department of Environmental Protection.
There are about 5,000 people who live within five miles of the sinkhole and about 1,500 private wells in the affected area, according to a lawsuit filed by three Florida residents, who allege Mosaic improperly stored radioactive and chemical waste. The residents are seeking class-action status, compensation for property damage and an order requiring the company to test their water wells for the presence of chemicals that leaked into the groundwater. Mosaic is reviewing the details of the filing and will respond in court, company spokesman Ben Pratt said in an e-mail.
Mosaic shares fell 0.6 percent to $23.99 in New York, They have dropped 13 percent this year.
Sinkholes are more common in Florida than in most other states largely because of its geology, but their occurrence can also be caused or accelerated by human activities such as construction and mining. And this isn’t the first time Mosaic has been the focus of environmental concerns.
Last year, the company committed $630 million to start a trust fund to close and clean up fertilizer plants after the Environmental Protection Agency said they violated federal and state laws in its handling of hazardous waste and wastewater at six facilities in Florida and two in Louisiana. To settle the EPA’s claims, which date back to 2005, Mosaic also agreed to spend $170 million on projects to lessen its facilities’ environmental impact and $2.2 million on local environmental projects, plus $8 million in civil penalties.
Mosaic is still investing in Florida, where it has three active mining-permit applications to develop reserves at its Wingate mine and is working toward the development of two new mines, DeSoto and Ona. The company intends to continue with its permitting efforts, Pratt said. That work may be hampered by the leak, Bernstein’s Oxgaard said. “If this makes that review even slower or possibly it gets denied, that would be a concern” for investors, he said.
Environmental groups including the Sierra Club have previously challenged Mosaic’s planned expansions. While the previous court dispute was settled in 2012, the group is now urging public officials to deny new permits.
The safeguards in place at New Wales weren’t enough to prevent the water from eating away at the rock below the stack of waste and more needs to be done to prevent similar spills in the future, Earthjustice’s Marshall said. Mosaic didn’t immediately respond to requests for comment on its methods at the site.
“This is certainly a really big spill,” Marshall said. “Without additional safeguards, they might keep happening.”