Bunge Ltd. announced on Oct. 5 that shareholders have approved the company’s acquisition of Viterra Ltd., including the issuance of 65,611,831 common shares of Bunge. The merger is expected to close in mid-2024, subject to satisfaction of customary closing conditions, including receipt of regulatory approvals (GM Sept. 29, p. 1; June 16, p. 1).
All posts by hlancey@bloomberg.net
KBR Inks Deals with SolydEra, Deepak
Houston-based technology provider KBR has announced new deals with Italy-based SolydEra and India’s Deepak Fertilisers and Petrochemicals Corp.
KBR on Oct. 4 signed a Memorandum of Understanding (MOU) with SolydEra to offer an integrated solution for producing lower cost clean ammonia using renewable energy. KBR will integrate SolydEra’s Solid Oxide Electrolysis (SOE) technology into its proprietary K-GreeN® process to deliver ammonia capacity worldwide.
KBR said the combination of KBR and SolydEra technologies is expected to deliver the most competitive levelized costs of carbon-neutral ammonia to accelerate the energy transition globally.
KBR on Oct. 3 reported that it was awarded a multi-year service contract by Deepak for the development of their enterprise-level Smart Factory project. The contract will cover the operations of their four nitric acid plants located in Dahej and Taloja, India. KBR will design and deploy real-time monitoring and diagnostics, first-principles modeling, artificial intelligence and machine learning, and advanced process control to optimize plant operations.
First Phosphate Receives LOI from US EXIM
Junior miner First Phosphate Corp., Saguenay, Quebec, on Sept. 29 announced that it has received a Letter of Interest (LOI) from the US Export-Import Bank (EXIM), where EXIM expresses that it would be able to provide financing in the amount of up to $170 million. The LOI is in support of the procurement of US goods and services by First Phosphate in Canada and is eligible for a maximum repayment term of 10 years. The LOI expires Oct. 14, 2024.
In addition, the company said the transaction may be eligible for special consideration under Section 402 of EXIM’s 2019 reauthorization (PL 116-94), which directs EXIM to take steps to mitigate the competitive impact of export support provided by the People’s Republic of China and other covered countries for opportunities such as this one and/or to advance the comparative leadership of the US in the Transformational Export Areas under EXIM’s China and Transformational Exports Program (CTEP).
“First Phosphate is committed to creating a strategic purified phosphoric acid (PPA) reserve to service the development of the lithium iron phosphate (LFP) battery industry in North America,” said CEO John Passalacqua. “We thank EXIM bank and US policy makers for working to build a strong North American LFP battery supply chain.”
“We are honored by the receipt of the LOI and look forward to committing to purchasing our capital equipment and services in America through support from EXIM,” Passalacqua continued. “Access to this stable, government-backed financing allows us to build out our projects judiciously while limiting the amount of equity dilution to our shareholders.”
First Phosphate said the LOI does not represent a financing commitment and does not guarantee the company’s access to any or all financing from EXIM. EXIM is to conduct its standard due diligence prior to issuing a final commitment for this transaction.
First Phosphate holds 1,500 square kilometers of total land claims in the Saguenay Region, some 110 kilometers north of the City of Saguenay, which it is actively developing to produce battery grade phosphate and with a low-carbon footprint (GM Oct. 14, 2022).
EXIM is the official export credit agency of the US. It is an independent executive branch agency with a mission of supporting American jobs by facilitating the export of US goods and services.
Drill Permits Approved for American Potash
Junior miner American Potash Corp., Vancouver, B.C., announced on Oct. 4 that it has received permits from the Utah Division of Oil Gas and Mining (UDOGM) to drill exploratory wells on three of its eleven 100% owned potash and lithium state mineral leases, which form part of its Green River Potash and Lithium Project, located within the Paradox Basin, Utah. The company received initial approval for the permits in December (GM Dec. 16, 2022).
“Securing these drill permits to test for lithium and potash on our state minerals leases is a key milestone on our path to develop the Green River Potash and Lithium Project, particularly given the challenges explorers face trying to obtain permits for drilling on federal lands,” said President and CEO Jonathan George. “We believe that results from our planned drilling program could reveal a substantial resource for both lithium and potash underlying our project in this part of the Paradox Basin.”
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.
Western Potash Receives C$5 Million
Western Resources Corp., Vancouver, B.C., announced on Sept. 28 that junior miner Western Potash Corp., the company’s 100% owned subsidiary, received funds in the amount of C$5 million from Vantage Chance Ltd.
The amount is part of the total payment of C$10 million, required to be made by Vantage to Western Potash under the terms of an exchangeable debenture agreement. Western Potash expects to receive the remaining balance in October 2023.
Western Potash is pursuing the completion of the Milestone Potash Phase 1 Project in Saskatchewan (GM March 24, p. 1). The construction of the project was kicked off in June 2019 with an anticipated initial production of 146,000 mt/y.
Unigel Misses Bond Interest Payment
Brazilian fertilizer and chemical producer Unigel’s credit score was downgraded by Fitch Ratings to C from CCC after the company failed to pay a coupon on its dollar bond due in 2026, according to an Oct. 3 report by Bloomberg.
Unigel now has a 30-day grace period to pay the interest before triggering an event of default, Fitch analysts wrote in a statement. If Unigel isn’t able to raise additional funds, “the company will need some combination of asset sales, an equity injection from its shareholder, or a renegotiation of its natural gas supply contracts,” according to Fitch.
Reporting Phase Implemented for EU Carbon Tax
The transitional phase of the European Union’s (EU) Carbon Border Adjustment Mechanism (CBAM), the Bloc’s new carbon tax on imported goods aimed at equalizing the carbon price paid by European producers with those outside of the EU, came into force on Oct. 1.
The so-called reporting phase will run until Dec. 31, 2025, after which the EU will begin collecting CO2 emissions charges at its borders. It will be the world’s first mechanism to impose CO2 emissions tariffs.
In its transitional phase, CBAM will apply to imports of fertilizers as well as imports of cement, iron and steel, aluminum, electricity, and hydrogen. EU importers of these goods will be required to report on the volume of their imports and the greenhouse gas (GHG) emissions during production, but will not be required to pay any financial adjustment at this stage.
While importers are being asked to collect data for the fourth quarter of 2023, their first report will only have to be submitted by Jan. 31, 2024, the European Commission said in a media statement last week.
The Commission adopted the reporting rules for importers of products under CBAM in August (GM Aug. 25, p. 29) after green-lighting CBAM in April (GM April 28, p. 30). The objective of the new tax is to avoid “carbon leakage,” a situation in which companies move production of emissions intensive goods to countries with less stringent environmental and climate policies.
The Commission said flexibilities have been built into CBAM’s structure for the first year of application, such as the use of default values for reporting of embedded emissions and the possibility to use the monitoring, reporting, and verification rules of the country of production.
“This transitional phase will serve as a learning period of all stakeholders,” the Commission said. “It will allow the European Commission to collect useful information on embedded emissions in order to refine the methodology for the definitive period, which starts on Jan. 1, 2026. As of that date, importers will need to buy and surrender the number of ‘CBAM certificates’ corresponding to the GHGs embedded in imported CBAM goods.”
The tariff has been raising concerns among the Bloc’s trading partners, especially China. At a forum last month, Xie Zhenhua, China’s leading climate envoy, urged countries not to resort to unilateral measures such as the EU levy, Reuters reported.
The European Commission said it needs CBAM to achieve its ambitious emission reduction targets and achieve climate neutrality by 2050. It believes CBAM will tackle the risk of carbon leakage in “a non-discriminatory way and in full compliance with WTO rules.”
Russian Fertilizer Production Up 15% in August
Russia increased its fertilizer production by 15% year-over-year in August, to 2.2 million mt (in 100% nutrient equivalent), according to Interfax, citing the country’s Federal Statistics Service (Rosstat). August fertilizer output was 1.1% higher than July’s production.
Production of potash fertilizer surged 58.3% year-over-year, to 0.9 million mt in August, and was up 9.3% from July, according to the report. Russia’s phosphate fertilizer production fell 6.6% in August, however, to 0.3 million mt, and was down 7.3% from July.
Nitrogen fertilizer output also fell year-over-year in August, dropping 1.8% to 0.9 million mt for the month, which was down 2.5% from July. Ammonia production increased 2.1% in August, to 1.3 million mt, but fell 1.1% from July.
Russia produced 16.7 million mt (100% nutrient equivalent) of fertilizer in the first eight months of the year, a 3.9% increase from 2022, according to the report. Production of potash fertilizer rose 5.7% year-over-year, to 5.5 million mt, while phosphate fertilizer output was up 0.3%, to 2.9 million mt. Nitrogen fertilizer increased 4% for the period, to 8.2 million mt.
First-Half Potash Exports Up from Belarus
Belarus exported 3.2 million mt of potash in the first half of 2023, almost “double” the volumes of last year’s first half, according to Bloomberg, citing data from the International Fertilizer Association (IFA).
Laura Cross, IFA Director of Market Intelligence, said the increase was fueled by higher volumes of Belarusian potash transiting to China by rail, replacing some of the lost volumes previously railed across Lithuania to the Lithuanian Baltic Sea port of Klaipėda.
Belarus railed more than 1 million mt of potash to China last year, according to an Interfax report in January, citing Belarus Transport and Communications Minister Alexey Avramenko (GM Jan. 6, p. 28).
Belaruskali Director General Ivan Golovaty, as cited last month by BelTA, the country’s state-run news agency, said Belarus’ sole potash producer has exported some 6.5 million mt of potash so far this year (GM Sept. 29, p. 27). Belarus is continuing to target the export of “at least 8 million mt” of potash in 2023 (GM Sept. 29, p. 27).
Taiwan Fert Company Boosts NH3 Storage
Taipei-based Taiwan Fertilizer Company (TFC) plans to build two new ammonia storage facilities over the next several years to “meet the huge demand for ammonia as a low carbon alternative to fossil fuels.”
The company intends to build the new storage tanks at its Taichung plant, where the two existing storage facilities have a total capacity of 40,000 mt, according to a report by news outlet Focus Taiwan, citing recently appointed TFC President Chang-Lang Chang.
Chang-Lang said total annual ammonia shipments to the storage facilities could reach 120,000 mt “given a turnover ratio of three times per year,” adding that the ratio could be raised further to boost ammonia supply to the Taiwan market.
As the largest liquid ammonia supplier in Taiwan, TFC sees hydrogen development for the domestic clean energy market as a niche business. In cooperation with Saudi Arabian firm Al-Jubail Fertilizer Co., TFC will import ammonia from Saudi Arabia into Taiwan, according to the report.
Al-Jubail Fertilizer Co. is jointly owned by Riyadh-based SABIC Agri-Nutrients Co. Ltd. and SABIC Ltd., which in turn owns a 50.1% stake in SABIC Agri-Nutrients. SABIC Agri-Nutrients Co. in early June reported its first commercial shipment of low-carbon ammonia to TFC, comprising a cargo of 5,000 mt (GM June 9, p. 28).
TFC sees Taiwan Power Co. (TPC) as a potential customer for the ammonia as a raw material for TPC’s coal-fired power plants, to be co-fired with coal as a way of cutting carbon emissions.