All posts by hlancey@bloomberg.net

EU Delays Plans to Require More Fallow Land

Europe, News Briefs, Nitrogen, Russia, Ukraine

The European Union has delayed plans that would require farmers to leave more of their land fallow to improve biodiversity after a wave of protests (GM Jan. 26, p. 27) over higher production costs and stringent regulations, according to Bloomberg. 

Instead of keeping 4% of land fallow, farmers growing nitrogen-fixing crops like lentils and peas on 7% of their land will now be considered as meeting the requirement, the Commission said in a press release. Belgian Prime Minister Alexander De Croo said on the social media platform X that it was an “important step” for farmers.

Changing the rules on fallow land have been one of the key points pushed by French farmers’ unions, whose members continue to block highways around Paris and other cities in France.

President Emmanuel Macron said on Jan. 30 that he would discuss the demands, including more EU flexibility on fallow land rules, with European Commission President Ursula von der Leyen on the sidelines of a summit of the bloc’s leaders this week. Farmers were planning to stage a protest near EU offices in Brussels during the meeting on Feb. 1.

The delay is the latest setback for the bloc’s efforts to push green farming in the food sector. Plans to halve the use of pesticides collapsed late last year, while von der Leyen has been holding meetings with the agricultural sector to stave off growing discontent ahead of elections.

The proposed environmental measures have angered farmers faced with extreme weather events, as well as higher energy and input costs due to Russia’s invasion of Ukraine.

The Commission also said that it would strengthen protections for “sensitive EU agricultural products.” In particular, poultry, eggs, and sugar coming from Ukraine will remain tariff-free only up to the average volumes imported in 2022 and 2023.

Russia, Belarus Increase Potash Supplies to China

China, News Briefs, Potash, Russia

China imported 3 million mt of potassium chloride from Russia in 2023, up 76% from the prior year’s 1.7 million mt, according to an Interfax report on Jan. 30, citing China’s General Administration of Customs. China imported 2.25 million mt of potassium chloride from Russia in 2021.

Russian supplies of complex fertilizers to China last year also increased significantly, to 400,000 mt, according to the report. China imported nearly 3.5 million mt of potassium chloride from Belarus last year, up from 1.9 million mt in 2022 and 1.75 million mt in 2021.

Ostchem Boosts Production, Impacted by Imports

Ammonium Nitrate, News Briefs, Nitrogen, Russia, Ukraine, Urea

Ukraine’s Ostchem Holdings produced 2.1 million mt of nitrogen fertilizers in 2023, up 20% from the previous year’s 1.75 million mt, according to a media statement by parent company Group DF. DF is owned by Ukraine businessman Dmytro Firtash.

Ostchem currently has two fertilizer plants in operation. Cherkasy Azot produced 1.56 million mt of fertilizers last year, a 40% increase from 2022, while Rivne Azot produced 528,000 mt, an 11% year-over-year increase, according to Group DF. The main fertilizers produced were ammonium nitrate (835,900 mt), UAN (572,700 mt), and urea (447,100 mt).

“The fertilizer market is recovering, but the increased import of nitrogen fertilizers prevented us from making full use of our plants,” said Ostchem Production Director Sergei Pavlyuchuk, as cited in the statement.

“Despite the difficulties in the agricultural sector, the forced shutdown of plants due to the war, the stubbornly high gas prices, and abnormally high volumes of imports into Ukraine at dumping prices, Ostchem began to restore production volumes in 2023,” he said, adding that the company fully met demand from farmers, even during peak periods.

According to the statement, mineral fertilizer imports into Ukraine in 2023 increased by 1.9 times compared with 2022, reaching 1.99 million mt. Of the total fertilizer imports last year, imports of urea grew by 3.7 times, to 501,000 mt.

Group DF said in the statement that despite Ukrainian sanctions, “colossal” flows of Russian and Belarusian fertilizer are being imported into Ukraine.

In a separate development, Pavlyuchuk confirmed that Ostchem/Group DF are holding talks with global players about the development of the company’s industrial sites. The plans include the construction of new workshops and plants, as well as investment in new energy-efficient fertilizer production and the launch of new products such as AdBlue, industrial gases, and petrochemicals.

Wilson Partners with Egypt to Build Phosphate Plant

Asia, Egypt, India, News Briefs, Phosphate

Singapore-based commodity trading company Wilson International Ltd. and Egypt’s El Nasr Mining Company and Al Safy Group have signed a partnership agreement to establish a company to set up and operate a phosphate beneficiation plant in Egypt, according to a report by news portal Zawya, citing Egyptian media.

According to some reports, the signing was completed in Cairo on Jan. 24 through Wilson International Trading (India) Private Ltd., an Indian subsidiary of Wilson. No further details of the proposed project were immediately available.

“This project represents an added value for phosphate ore and will support the import, export, and storage of phosphates,” said Egyptian Public Business Sector Minister Mohamed Esmat, as cited by the report.

Tecnimont Awarded FEED in Norway

Ammonia, Hydrogen, News Briefs, Nitrogen, Norway

MAIRE SpA, Milan, Italy, announced on Jan. 17 that its subsidiary Tecnimont has been awarded a Front-End Engineering Design (FEED) contract by Fortescue for a green ammonia plant to be located in the Nordgulen fjord in Norway. 

The scope of work entails the design of electrolyzer integration, the air separation unit for nitrogen production, the ammonia production plant, as well as its storage and ship loading facilities. As part of the agreement, Tecnimont will also submit an Engineering, Procurement and Construction (EPC) proposal for the realization of the plant.

The facility will produce green ammonia through electrolyzers that will use renewable hydropower for the hydrogen production. The plant aims to ship the resulting green ammonia to domestic and European markets.

Cinis Workforce in Place

News Briefs, Sulfate of Potash, Sweden

Sweden’s Cinis Fertilizer reported on Feb. 2 that it has now recruited and hired the entire workforce required to complete commissioning of its first fossil-free sulfate of potash (SOP) production facility.

The 100,000 mt/y plant in Köpmanholmen, just outside of Örnsköldsvik, is nearing completion and the company is preparing for commissioning at the end of first-quarter 2024, with production starting a few weeks later.

ADNOC, POSCO to Evaluate Blue Hydrogen

ADNOC - Abu Dhabi, Blue Ammonia, Blue Hydrogen, News Briefs, Saudi Arabia, South Korea

Abu Dhabi National Oil Co. (ADNOC) and South Korea’s POSCO International have signed a strategic agreement to jointly assess the production of blue hydrogen from POSCO’s LNG terminal in Gwangyang, POSCO reported on Jan. 31, according to Bloomberg.

The two companies will push for operations to produce and supply blue hydrogen, as well as work on carbon capture and storage. The companies will supply the fuel to meet demand in South Korea, including POSCO’s Gwangyang steel mill, from 2029.

The agreement is part of POSCO’s effort to expand its hydrogen production capacity to 1.26 million mt/y by 2035.

POSCO is evaluating a blue ammonia project with CF Industries Holdings Inc. at CF’s Blue Point Complex in Ascension Parish, La. (GM Sept. 15, 2023). A Front-End Engineering Design (FEED) study is expected to be completed in the second half of 2024, with a final investment decision by CF and POSCO to follow. The proposed facility would cost approximately $2 billion.

Saudi Arabia’s ACWA Power and POSCO have also announced the signing of a Memorandum of Understanding (MOU) to jointly explore production of green hydrogen and green ammonia (GM July 29, 2022).

Zimbabwe Contemplates Green Hydrogen Project

Africa, Ammonium Nitrate, Green Hydrogen, News Briefs

Zimbabwe’s Climate Change Management Department (CCMD) is looking to recommission the Sable Chemicals Industries Inc. ammonium nitrate plant into a green hydrogen facility, implemented through the use of a 30MW Solar PV plant.

Sable is Zimbabwe’s only manufacturer of nitrogen, with a nameplate capacity of 240,000 mt/y. The producer’s AN output in recent years has been well below the nominal installed capacity, however, due to apparent technical issues and limited ammonia availability. The ammonia line at the site was decommissioned in 2015 due to power shortages and increased costs.

According to the project proponents, the green hydrogen plant would aid in the decarbonization and self-sufficiency of Zimbabwe’s agriculture, which requires 380,000 mt/y of topdress fertilizers.

Australian Potash Exits Administration

Australia, News Briefs, Sulfate of Potash

Former aspiring junior sulfate of potash producer Australian Potash Ltd. (APC) said it exited administration as of Feb. 1, following creditor approval of a Deed of Company Arrangement (DOCA) on Jan. 19.

The DOCA went into effect on Feb. 1, allowing the administrators to step down and APC to be returned to the directors as a solvent entity, APC said in a Feb. 2 ASX statement. The company’s balance sheet has been significantly restructured with all previous trade creditors and other payables agreeing to the settlement terms proposed in the DOCA. Most creditors will receive 100 Australian cents on the dollar.

“We successfully and quickly negotiated our way through the voluntary administration process, which now allows us to move forward with having APC’s shares requoted on the ASX,” said APC Managing Director and CEO Matt Shackleton.

Hayden White and Daniel Woodhouse of FTI Consulting were appointed as Voluntary Administrators of the Subiaco, Western Australia-based company on Dec. 6 last year (GM Dec. 8, 2023).

In the months prior to administration, APC had been turning its focus to critical minerals, which included its Nexus rare earth elements project in the West Arunta and its Lake Wells Gold Project, some 500 kilometers northeast of Kalgoorlie, both in Western Australia. It is these projects that APC will now focus on.

The company surrendered the mining leases for its Lake Wells SOP Project in August last year after it was unable to secure further funding (GM Aug. 18, 2023). The project, which was aiming at potential production of 150,000 mt/y of SOP (GM May 25, 2021), was put on ice in June (GM June 16, 2023).

APC retains the database for the development of Lakes Wells, as well as its interest in the exploration license tenure its holds for the project. The company reported in December that it was ready to deploy the project information and know-how should a new opportunity emerge for the project.

APC said it will shortly lodge a prospectus for the issue of shares to fund a planned exploration program and access work.  The capital raising program has been managed by Canaccord Genuity and Cumulus Wealth, which will underwrite A$2.75 million of the targeted A$6 million (approximately $3.9 million at current exchange rates) maximum raise.

Emmerson Unveils New Process for Khemisset

News Briefs, Potash

Isle of Man-registered potash junior Emmerson plc reported on Feb. 1 that it has completed a scoping study on a new processing method for its Khemisset potash project in northern Morocco, which aims to reduce the project’s environmental impact while enhancing its economic returns.

The Khemisset Multi-Mineral Process (KMP) represents a strategic innovation by treating the brine to remove magnesium and iron chlorides through the addition of phosphate and ammonia, allowing the residual brine to be recycled in the plant. The new approach eliminates the need for deep-well injection and reduces water consumption by approximately 50%, Emmerson said.

The company has met with recent delays in securing environmental approval for its Khemisset project from Morocco’s government. Khemisset’s environmental approval was referred to the national Ministerial Committee in July 2023 after the local regional committee was unable to approve the application due to concerns about its impact on water resources (GM July 14, 2023).

Emmerson reported last month that it had not yet received a meeting date for the Ministerial Committee to discuss the Environmental and Social Impact Assessment (EISA) for the project (GM Jan. 12, p. 28). Emmerson CEO Graham Clarke said Emmerson believes the Moroccan authorities are continuing to assess the company’s application.

In addition to the environmental benefits, the KMP creates two new products, struvite and vivianite, that have the potential to command a price premium as multi-nutrient, slow-release fertilizers. The new process also increases the recovery rate of potash from 85% to approximately 91%, according to the company.

Emmerson said the KMP is expected to improve the project’s economics, more than doubling the post tax net present value to $2.2 billion, the internal rate of return to 40%, and annual EBITDA to $440 million. The company now estimates the total capex for the project incorporating KMP to be $525 million versus the original design capex of $539 million, reflecting industry-wide cost inflation since 2020.

Clarke said the KMP is an exciting innovation that represents a major improvement both environmentally and economically. “The KMP arose from our team continuously exploring ways to minimize impact on the environment, particularly when it comes to water,” he said.