Mosaic, the US phosphates and potash giant, has revealed it has given up on reopening two mothballed plants, and was ditching one of its three reporting divisions, as it prepared investors for a further quarter of steeply falling profits.

Ironically, the decision to close permanently two US plants comes less than a week after rival Israel Chemical said that the phosphate market was sufficiently bouyant that producers might consider bringing capacity back online.

Mosaic, which is 64% owned by grains trading giant Cargill, said it was merging its loss-making Offshore unit into its Phosphates division "to more clearly reflect the company's evolving business model".

The move will "further align" Mosaic's global distribution network, much of which was held within Offshore, with the groups' North America-based phosphate production operations, chief executive Jim Prokopanko said.

Mosaic said in its 2009 annual report that it was reviewing its "strategic global focus" to support returns on its production assets.

The Offshore division, which includes sales offices, fertilizer blending facilities and port terminals, has been particularly dented by the downturn in fertilizer markets, notably in Argentina and Brazil, reporting a $191.4m operating loss in the year to the end of May, compared with a $175.4m profit a year before.

Asset write-offs

Mosaic said that the closure of the US plants, which were mothballed three years ago, would help cut operating costs in the phosphate business, as well as improve return on invested capital.

However, write-offs of assets associated with the plants would lumber the group with a $50m pre-tax charge for its second quarter, which ends this month.

Analysts are already expecting the group's earnings to fall by 72% for the period, to $198m, after a 92% slump in the first quarter.

Mosaic shares closed up $0.10 at $54.45 in New York.