Mosaic Mine

For seven months, the coverage of the war with Iran has been about oil: tanker counts, the price of Brent, how much is left in the Strategic Petroleum Reserve. Hardly anyone outside the fertilizer trade has noticed that the Strait of Hormuz also carries close to half of the world’s seaborne sulfur. Sulfur is not glamorous. It is a byproduct of cleaning sour gas and crude oil, and most Americans could not tell you what it is used for. But turned into sulfuric acid, it is the indispensable ingredient in phosphate fertilizer. Without it, phosphate rock stays rock.

When the Strait closed on February 28, that supply disappeared. Then Russia banned its own sulfur exports and China banned exports of sulfuric acid, so the shortage got worse. Sulfur that sold for about $400 a ton before the war now costs more than $1,000. In July, Abu Dhabi’s national oil company set its official price at $1,000 a ton.

Most of the sulfur America uses is produced at home. That has not protected American industry, because sulfur is priced on a world market. In May, Mosaic, the country’s largest phosphate producer, cut output by roughly half at its Bartow, Florida, and Faustina, Louisiana, plants. It had already idled two plants in Brazil. In August it told 206 workers in St. James Parish, Louisiana, that they would lose their jobs by October 30, and the reason it gave was the availability and cost of sulfur.

Meanwhile Morocco’s OCP, which has adapted better to the shortage, keeps shipping fertilizer into a U.S. market that Washington reopened to it in March.

These are not abstractions. On October 5, I received an email from a Mosaic employee in Florida. I will call him S, because he asked me to keep his name confidential. That morning, he and his co-workers were told that the South Fort Meade mine would cease all operations. Under the WARN Act they have 60 days’ notice. Some will be moved to other mines; most, he expects, will be laid off in December. He does not yet know which group he will be in.

S is not a political activist. He voted for Donald Trump three times. Here is what he wrote to me:

Hello Larry.

I am an avid listener to your interviews, and really appreciate you sharing your insights about what is happening in the world.

The reason why I am writing is, I am a worker at The Mosaic Company here in Florida. Today, October 5th at 9 am we were notified that effective today, the South Fort Meade Mine will cease all operations. Therefore all phosphate mining at that mine will be shut down. That comes on the heels of several of Mosaics chemical plants, which produce the fertilizer, reducing their production now for several months. They are trying to relocate as many of the employees to other mines and fill positions that they can. But most will more than likely be laid off. Due to the WARN ACT they had to give us a 60 notice of this. So as of December, whoever will not be able to fill positions at other locations will be laid off. I don’t know if I will be part of the group that will be laid off or not. I won’t find out for several more days…maybe a few weeks, until they have sorted everything out.

The reason why they are suspending operations is the high price and lack of sulfur….the main driver. Also affecting our production and operations at the mines are high diesel prices. Couple that with high fertilizer prizes, due to high sulfur and diesel prices, that farmers are no longer able to or willing to pay, high tariffs, and now also Trump removing import bans of Belarusian potash and Russian and Moroccan fertilizer; which are much cheaper than what we can produce at the moment; we are being hit hard.

Trump’s clusterf**k of a war with Iran is finally hitting us. Right now, they are “hoping” that this will be for only six months. But we have also been told by our boss that this will more than likely be at least 12 months…..if the Strait of Hormuz were to fully open today.

We all know that won’t happen. And I would not be surprised if Trump restarts the war after the Midterms. I actually expect that to happen. That guy just can’t take a hint that he lost. And if he does restart the war, I fully expect Iran to not only retaliate, but escalate. God help us if that happens.

I can tell you, whoever was still voting in favor of the GOP, the Republicans lost massive amounts of voters today. Employees. Contractors that will also be hit today. Their families and friends.

Where we will be going from here, I don’t know. It will be interesting to see what will happen over the next 3 – 4 month.

Anyway. I wanted to let you know and give you an additional data point.

Sincerely,

S

PS: I am no Democrat. And I voted for Trump three times……I guess the joke is on me this last time around…….I hope that the Democrats sweep the Midterms, impeach his ass (pardon my French) and remove him from office. For all I care, they can shove him into a prison for all his corruption and war crimes and throw the keys away.

I for one will be voting third party. I am done with the Republicans. I my even hold my nose and bite my tongue, and vote Democrats to help make that happen.

Closure of the Strait of Hormuz is treated by most folks as an abstract problem. This email from “S” brings home the human dimension of the problem. Imagine you’re this man. The holiday season, i.e. Thanksgiving, Eid and Christmas, is just around the corner. You’re facing the loss of your job, which includes losing health care benefits. I don’t think Trump and his Republican cronies grasp the anger that is surging below the surface across America.

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Colonel Wilkerson and I discuss the latest leak of a CIA analysis predicting the possible collapse of Israel with Danny Haiphong:

The Z-Man and I are back to discuss Saudi Arabia’s panic over the Houthi offensive:

Great chat with Brandon Weichart regarding reports that Turkey and Pakistan are sending troops to Saudi Arabia to battle the Houthis:

Discussed the ridiculous report that Syria is planning to join the war in Yemen with Sulaiman Ahmed:

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