All posts by hlancey@bloomberg.net

German Rail Strike Ends as Negotiations Resume; Finnish Union Calls Strike at Industrial Companies

Featured, Germany

German rail freight and passenger services have resumed after train drivers from the Gewerkschaft Deutscher Lokomotivführer (GDL) union and state-owned rail operator Deutsche Bahn AG resumed negotiations.

The strike had been set to last six days and end on Jan. 29 (GM Jan. 26, p. 1). Freight services resumed on Jan. 28 at 6 p.m. local time while passenger services restarted on Jan. 29 at 2 a.m. GDL members have agreed to not stage another walkout until at least March 3, according to a Deutsche Bahn statement cited by Bloomberg.

Had it run its full course, the strike would have been the longest in Deutsche Bahn’s history. The country’s BDI industry lobby had warned that a six-day strike could lead to losses to the German economy of as much as €1 billion (approximately $1.1 at current exchange rates) and cause “enormous problems” for companies, particularly in the chemical, steel, automotive, paper, and timber sectors.

K+S Group confirmed to Green Markets last week that the strikes were affecting the company as Deutsche Bahn is its main rail contractor, but K+S had been able to conduct some transports and/or was able to use other rail companies, or shift to truck transports.

German chemical giant BASF SE, according to a Dow Jones report, was forced to shift railway transports on “a large scale” to trucks as a result of the strike. In normal circumstances, BASF handles about 30% of its transports by rail.

Tensions had escalated after the small but powerful GDL union rejected a third offer from Deutsche Bahn, which reportedly included a €1,500 inflation-adjustment bonus that could be paid in March, according to the report. Base pay as well as reduced working hours are being negotiated. A key demand of the union is a 35-hour work week on full pay, down from the current 38 hours.

“Deutsche Bahn’s willingness to negotiate a reduction in working hours is of central importance,” said GDL Chairman Claus Weselsky, according to the report. “If an agreement is reached, this would be a strong signal for the entire railroad system.”

In other labor news, Finland’s Industrial Union announced new political strikes to take place on Feb. 14-16 involving 60,000 industrial workers, with a large part of the country’s industry expected to come to a “standstill,” according to Bloomberg, citing a statement from the union.

The new action follows this week’s strikes of 200,000 workers opposing the government’s plans to reform the labor market and some benefits. Fertilizer producers Kemira and Yara International ASA are included on the list of affected companies.

Other industrials on the list include ABB, Andritz, BASF, Boliden, Caverion, Enersense, Fiskars, Harvia, Kesla, Kone, Konecranes, Marimekko, Metso, Nokia, Nokian Renkaat, Orion, Outokumpu, Ponsse, Sandvik, Scanfil, SSAB, Stora Enso, UPM-Kymmene, Uponor, Vaisala, Valmet, and Wartsila.

Compass Minerals – Management Brief

Management Briefs, U.S.

Edward C. Dowling Jr. became the President and CEO of Compass Minerals, effective Jan. 18, 2024. He will continue as a member of the Board of Directors. Compass also announced the promotions of Jenny Hood to Chief Supply Chain Officer, and Ben Nichols to Chief Sales Officer.

Dowling brings more than 30 years of leadership experience and international mining expertise to the role. A former petty officer in the US Navy, he earned a Bachelor of Science in mining engineering and mineral processing, a Master of Science in mineral processing, and a Doctorate in mineral processing from Pennsylvania State University.

In her new role on the company’s senior management team (SMT), Hood will continue to lead the next-generation Fire Retardant business and will have oversight of the global supply chain function, including the customer experience, integrated business planning, logistics and procurement teams. Nichols, also joining the SMT, will now oversee the sales, product management and marketing functions for the company’s Salt and Plant Nutrition businesses.

Hood and Nichols have both held roles of increasing responsibility at the company. Hood was most recently Head of Fire Retardants and previously served as Vice President, Supply Chain. Nichols was most recently Vice President, Commercial, and previously served as Vice President, Plant Nutrition, and Vice President, Salt, Consumer, and Industrial.

Hood holds an Executive Master of Business Administration from Virginia Commonwealth University and a Bachelor of Arts in technical writing from Christopher Newport University. Nichols has a Bachelor of Science in management and marketing from Baker University and a Master of Business Administration from Pittsburg State University.

Additionally, Compass has appointed Jordan Taylor to Vice President, Operations, Utah. He is responsible for leading operations and strategy at the company’s Ogden, Utah, facility. Taylor has been with the company for more than four years and has served as Vice President, Lithium Operations, and Director, Engineering and Operational Support.

Prior to Compass, Taylor held several operations and engineering roles of increasing responsibility at companies such as Covia Corp., Anglo American, and BHP. Along with his 17 years of professional experience, he holds a Bachelor of Science in mining and minerals engineering from Virginia Tech. He is also a licensed professional engineer.

American Potash Corp – Management Brief

Lithium, Management Briefs, Potash, Vancouver

Junior miner American Potash Corp., Vancouver, B.C., on Jan. 30 announced that Jonathan George has stepped down as President and CEO. Dean Besserer, a Director of the company, has been appointed as Interim President and CEO.

The company said Besserer has more than two decades of mineral exploration experience, previously serving as Vice President and Partner at Apex Geoscience Ltd., a consulting firm, and as a Director of Brilliant Mining, Niblack Resources, and Sentosa Mining. He also served as the Vice President of Exploration of numerous junior mining companies and is a professional geologist and a qualified person as defined in National Instrument 43-101, Standards of Disclosure for Mineral Projects.

With this change in management, the company said it will be renewing efforts to explore its Green River Potash and Lithium Project within the Paradox Basin in Utah (GM Oct. 6, 2023). Located only 20 miles northwest of Moab, Utah, American Potash said the project has significant logistical advantages including proximity to major rail hubs, airport, roads, water, towns, and labor markets.

Orlen SA – Management Brief

Management Briefs, Poland

Polish energy group Orlen SA’s supervisory board this week dismissed company CEO Daniel Obajtek from the management board, effective at COB on Feb. 5, according to a company filing. Earlier in the week, Obajtek had placed himself at the disposal of the supervisory board.

In December, Poland’s new Minister of State Assets Borys Budka said he expected the speedy resignation of Obajtek as CEO of Orlen. The minister’s comments followed Obajtek’s public statement that he would stand down from the position in the event of a change of government. Poland started 2024 with a new government, with Donald Tusk’s Liberal progressive coalition replacing the Conservative PiS (Law and Justice) party that had ruled Poland for eight years.

Orlen in June last year signed a cooperation and non-disclosure agreement with Polish fertilizer and chemicals producer Grupa Azoty SA for the potential acquisition of Azoty’s Zakłady Azotowe Puławy subsidiary (GM June 9, 2023). However, Azoty in November reported it would start talks aimed at ending the potential takeover of Puławy (GM Nov. 22, 2023).

CF Increases Quarterly Dividend by 25%

Ammonia, News Briefs

CF Industries Holdings Inc. on Jan. 31 reported that its Board of Directors has declared a $0.50 per share dividend on its common stock, a 25% increase compared to its prior quarterly dividend. The dividend will be payable on Feb. 29, 2024, to stockholders of record as of Feb. 15, 2024.

“CF Industries’ plan to raise its dividend 25%, to 50 cents a share, suggests management is confident about cash-flow generation capacity, supported by robust North American demand and favorable energy spreads,” said Alexis Maxell, Director of Research, Green Markets. “That’s as ammonia prices are down 73% from a 2Q 2022 cycle peak. New production capacity in line with the developing carbon-free ammonia market is instrumental in extending revenue.”

Arianne Studies PPA Plant

Canada, China, Europe, News Briefs, Phosphate, Phosphoric Acid

Arianne Phosphate, a development-stage phosphate mining company advancing the Lac à Paul project in Quebec’s Saguenay-Lac-Saint-Jean region, announced on Jan. 30 that it has commenced work on a Prefeasibility Study (PFS) to construct a downstream purified phosphoric acid plant (PPA) in the region, capable of converting the company’s phosphate concentrate into a finished PPA product.

The company hopes to move beyond being a producer and seller of concentrate and leverage its geological advantage into becoming a dominant player in the high-purity, battery, and specialty markets. Arianne noted that its project is well situated near necessary infrastructure, fully permitted, and shovel ready.

The project anticipates the production of 350,000 mt/y of battery-grade PPA, which would make Arianne the single largest producer outside of China and capable of addressing a significant portion of battery requirements in the West.

The facility would also produce more than 200,000 mt/y of a secondary premium phosphoric acid used for animal feeds and specialty fertilizers. Due to projected closures both in North America and Europe, Arianne said this secondary market will be greatly underserviced and provides additional economic opportunity to Arianne.

Arianne noted that the Government of Quebec recently placed the phosphate-bearing mineral apatite on its critical and strategic mineral list. This move follows other jurisdictions that have done the same, including the European Union.

First Phosphate Announces Drill Campaign, MOU

Canada, Lithium, News Briefs, Phosphate

First Phosphate Corp., Vancouver, B.C., on Jan. 31announced that it will undertake a 25,000-meter drill program at its Bégin-Lamarche Project in Quebec. The drilling program follows the company’s recent financing that raised gross proceeds of $8.2 million and is intended to lead to a maiden NI 43-101 compliant resource estimate, followed by a Preliminary Economic Assessment (PEA). The company announced the completion of its third tranche of financing on Jan. 19.

The company announced on Jan. 29 that it has confirmed a new high-grade discovery 500 meters from the existing northern zone of its Bégin-Lamarche Project. The original discovery of these areas was made in the fall of 2022 during a prospection campaign and was confirmed last fall with 26 grab samples returning high-grade P2O5.

First Phosphate said the Larouche area continues to return high-grade analyses, with one sample grading as high as 39.45% P2O5 in an irregular layer of pure apatite. It said at this level of purity, the mineral would be considered direct shipping ore (DSO).

The company announced on Jan. 25 that it has entered into a multi-party Memorandum of Understanding (MOU) with American Battery Factory Inc. (ABF) of Utah and technology provider Integrals Power Ltd. (IPL) of Milton Keynes, UK, to produce lithium iron phosphate (LFP) cathode active material (CAM) and LFP battery cells in North America.

The initiative LFP Project America is to support ABF’s eventual need for up to 40,000 mt/y of fully localized LFP CAM for LFP battery cell production in North America by 2028. LFP Project America aims to eventually localize the entire production supply chain of LFP CAM, LFF battery cells storage devices for the battery storage sector, to North America.

Jury Awards Record $2.2 B Roundup Verdict

News Briefs, Texas, U.S.

Bayer AG’s Monsanto unit was ordered by a Pennsylvania jury to pay more than $2.2 billion to a former Roundup user who blamed his cancer on the weedkiller. The verdict is the largest so far in five years of litigation over the herbicide, according to Bloomberg.

Jurors in state court in Philadelphia on Jan. 26 awarded John McKivison $250 million to compensate for his losses and $2 billion in punitive damages over his claims that years of using Roundup at work and at home caused his cancer. The 49-year-old was exposed to Roundup when he worked as a landscaper, according to evidence in the case.

Bayer shares fell as much as 5.7%, the most since Nov. 20, after the verdict. Shares had already fallen almost 3% just before the jury announced its verdict after Bank of America analysts downgraded the company to underperform from neutral because of an overhang created by the Roundup litigation.

Analysts said the decision emphasizes the risks the firm continues to face from legal action, though they say the high verdicts are likely to be reduced.

Justin Teresi, an analyst with Bloomberg Intelligence, said the verdict suggests “settlement pressure will likely keep building through 1H. The award may likely be reduced as excessive at some point, yet this challenge could prove more difficult because the ratio of compensatory to punitive damages is within constitutional limits.”

Monsanto has won 10 of 16 Roundup trials recently, but the cases it has lost include a $1.5 billion verdict in Missouri handed down in November to three ex-users of the herbicide. The Bayer unit faces its next US trial early this month in state court in Delaware.

The German conglomerate remains under intense pressure from the massive liability it inherited with its $63 billion acquisition of St. Louis-based Monsanto in 2018. Bloomberg News reported on Jan. 18 that company leaders were leaning against breakup options, including separating its consumer-health and crops-science divisions, in spite of investor frustration over Monsanto.

“We disagree with the jury’s adverse verdict that conflicts with the overwhelming weight of scientific evidence and worldwide regulatory and scientific assessments, and believe that we have strong arguments on appeal to get this verdict overturned and the unconstitutionally excessive damage award eliminated or reduced,” Bayer said in an emailed statement.

In 2019, a California jury awarded a combined $2.055 billion in damages to a husband and wife who claimed they got cancer from using the weedkiller for 30 years. That award later was cut to $87 million and allowed to stand by the US Supreme Court.

Bayer has set aside as much as $16 billion to resolve more than 100,000 cases over Roundup, which it acquired in the Monsanto deal. The company now faces a second wave of suits alleging glyphosate and other elements of the herbicide are carcinogens. It lost a bid in 2022 to have the US Supreme Court hear arguments that all Roundup suits should be barred from going forward on procedural grounds.

Lawyers for McKivison, a resident of Williamsport, Pa., said the former landscaper loaded 25-gallon tanks of Roundup on his tractor to deal with weeds and other vegetation on the job and also used it on his lawn and garden at home. He was diagnosed with non-Hodgkins lymphoma, a cancer linked to Roundup’s active ingredient glyphosate, in 2020, according to court testimony.

“The jury spoke very elegantly with their verdict about the lengthy list of misconduct Monsanto engaged in as they recklessly sold this product for more than 50 years and callously endangered the safety of users,” said Thomas Kline, a Philadelphia-based lawyer who represented the plaintiff in the three-week trial.

Roundup users argue in the lawsuits that Monsanto knew some researchers tagged glyphosate as a carcinogen, but the company sought to bury those studies. Internal Monsanto documents made public during the litigation also showed company officials ghost-wrote scientific studies backing glyphosate’s safety.

Bayer CEO Bill Anderson has been reviewing the company’s strategy and structure since taking over at the helm in June. The Texas native has said nothing is off the table as he seeks to win back the faith of investors and navigate the company out of a thicket of challenges.

In the meantime, closing arguments in a Bayer Roundup class action case in Australia were made on Jan. 30, according to Reuters. It is reported the be first such case to advance so far in Australia.

BioConsortia Expands Nitrogen-Fixing Products

News Briefs, Nitrogen

Ag tech provider BioConsortia Inc., Davis, Calif., on Jan. 26 announced that it has developed nitrogen-fixing products to expand its microbe-based technology to vegetables such as potatoes, tomatoes, and lettuce.

“The field results in potatoes and other vegetables continue to impress, and we’re excited to continue our work with vegetable seed developers, input providers, and growers around the globe as we get one step closer to product launch,” said Dr. Hong Zhu, Senior Vice President of Research and Development at BioConsortia.

BioConsortia said its nitrogen-fixing seed treatment products have already been validated through hundreds of field trials in cereals like wheat, rice, and corn, where the products routinely deliver increased yield or enable nitrogen displacement. In fruit and vegetable markets, BioConsortia will offer both seed treatment and formulations designed for application to soil or through drip irrigation.

“This is an exciting development for BioConsortia and the vegetable industry,” said Marcus Meadows-Smith, CEO at BioConsortia. “Products like these allow growers to reduce their reliance on synthetic nitrogen fertilizers and better meet the challenges of balancing crop productivity with ecological safety.”

OSHA Issues Citations, Penalty for Ammonia Release

Ammonia, News Briefs, U.S.

The US Department of Labor’s Occupational Safety and Health Administration (OSHA) announced on Jan. 29 that it has issued 12 citations and a proposed penalty of $145,097 against AJLS Enterprises Inc., operating as Schoep’s Ice Cream. Federal investigators found that the Madison, Wisc., ice cream plant lacked sufficient process safety management procedures to control the release of anhydrous ammonia.

In addition, OSHA noted multiple safety and health violations including a lack of lockout/tagout procedures and machine guarding; failing to train workers in lockout/tagout procedures; not having a written hazard communication plan and failing to update the emergency action plan; and having ladder openings unprotected from fall hazards.

AJLS has 15 business days from receipt of the citations and penalties to comply, request an informal conference with OSHA’s area director, or contest the findings before the independent Occupational Safety and Health Review Commission.