Mosaic and seven other large fertilizer companies are accused of price-fixing and collusion in a federal lawsuit filed Thursday in Minneapolis.
The suit, which seeks class-action status, accuses Plymouth-based Mosaic Co. of conspiring since 2004 with companies in Belarus, Canada and Russia to limit competition and drive up prices of potash, a mined mineral that is a key ingredient in fertilizer. Artificially high potash prices have hurt farmers, consumers and smaller fertilizer manufacturers worldwide, according to Richard Lockridge, a Minneapolis attorney who filed the lawsuit.
Potash prices have more than quadrupled over the past year, transforming little-known fertilizer companies into Wall Street darlings. Mosaic's stock price has skyrocketed from $42.84 a share a year ago to $85.60, though shares are down sharply from their high of $163.25 in June. Many economists and agricultural analysts have blamed the rising prices on a global commodities boom and increased demand for biofuels, which has encouraged farmers to plant more crops such as corn that demand large amounts of fertilizer.
The suit's plaintiff is Minn-Chem Inc., a Sanborn, Minn.-based maker of fertilizer for farmers and cooperatives that ceased manufacturing operations about a year ago in part because of high potash prices, Lockridge said.
Minn-Chem and other members of the class are seeking unspecified damages and a court injunction that would prevent Mosaic and the other potash suppliers listed as defendants in the case from continuing the alleged price-fixing conspiracy, according to the complaint.
Linda Thrasher, a spokeswoman for Mosaic -- the world's largest producer of potash and phosphate, another key fertilizer ingredient -- declined to comment Thursday, noting that the company's lawyers had not had a chance to thoroughly read the lawsuit.
Minnetonka-based Cargill Inc. owns a 65 percent stake in Mosaic.
Minn-Chem argues that the potash industry is "marked by a high degree of cooperation" among several large companies, which have overlapping ownership interests and cooperate through reciprocal visits to their production facilities. In addition to Mosaic, the lawsuit lists as defendants Agrium Inc. of Calgary, Alberta; Potash Corp. of Saskatchewan Inc.; JSC Uralkali of Moscow; RUE PA Belaruskali, of Soligorsk, Belarus; RUE PA Belarusian Potash Co. of Minsk, Belarus; JSC Silvinit of Solikamsk, Russia; and JSC International Potash Co. of Moscow.