All posts by hlancey@bloomberg.net

Mota-Engil Inks Contract for Fert Plant in Mexico

Ammonia, Mexico, News Briefs, Urea

Portuguese construction firm Mota-Engil reported that it has signed an agreement with Pemex Transformación Industrial for the construction of a fertilizer plant in Mexico, Bloomberg reported on July 16, citing a regulatory filing.

Mota-Engil said the agreement includes the development of the engineering, construction, financing, and operation of a plant for ammonia, urea, and AdBlue, with annual production estimated at more than 700,000 mt. Construction of the $1.2 billion project is expected to last 42 months.

BHP Jansen 1 Now 52% Complete

Canada, News Briefs, Saskatchewan

BHP reported on July 17 that its Jansen Stage 1 potash project in Saskatchewan remains ahead of its initial schedule and is now 52% complete, up from 44% in April (GM April 19, p. 27). First production is targeted for the end of calendar year 2026. Capital expenditures are expected to be $5.72 billion with capacity of 4.15 million mt/y.

Jansen Stage 2, which reached final approval in October 2023, is now 2% complete and expected to be up in fiscal year 2029. Capital expenditures are put at $4.86 billion with capacity of 4.36 million mt/y.

Harvest Minerals Updates on Brazil Fert Project

Australia, Brazil, News Briefs

Harvest Minerals, Perth, Australia, has outlined a two-phased exploration program at its Arapuá fertilizer project in Minas Gerais, Brazil, following the discovery of rare earth elements at the site, according to a July 16 update from the company.

The first phase will involve analysis of historical rock samples and new samples derived from seven boreholes. The mining company expects to complete the first phase within four months.

In the second phase, Harvest Minerals will conduct extensive drilling activities to assess potential mineral locations and then perform an in-depth analysis of processing methods to support a preliminary economic evaluation.

Harvest Minerals in 2021 opted to exit a proposed potash project in Capela, Sergipe, in northeast Brazil by relinquishing its exploration license back to Brazil’s National Mining Agency (GM Feb. 12, 2021). The company said at the time that it would focus instead on its Arapuá project (GM April 17, 2020), which produces KPfértil, an organic, multi-nutrient slow-release fertilizer and remineralizer made from weathered potassium and phosphate-rich lava.

Tunisia Issues Arrest Warrants for Phosphate Execs

News Briefs, Phosphate, Tunisia

The Tunis Court of Appeal has issued arrest warrants on corruption charges for several individuals, including a former MP and the ex-CEO of the state utility Gafsa Phosphate, Jurist News reported on July 14, citing TAP. 

The arrests of former MP Lotfi Ali and the ex-CEO of Gafsa Romdhane Souid are linked to a phosphate extraction and transport contract between Souid, Ali, and three other defendants, including ex-industry minister Slim Feriani, Lotfi’s brother Mouldi Ali, and Abdelwaheb Hfaïedh.

Phosphate mining for fertilizer production accounts for 4% of Tunisia’s GDP and 15% of total exports. The industry has been plagued by scandals, however, and the latest arrests are part of President Kais Saied’s ongoing efforts to clean up the sector and address broader corruption issues.

In August 2021, a Tunisian judge imposed a travel ban on twelve government officials suspected of corruption linked to the phosphate industry. These officials, including former ministers and lawmakers, were arrested and formally charged with corruption crimes.

Mitsui Buys Shale Gas Assets in Texas

Ammonia, Japan, Natural Gas, News Briefs, Texas

Japanese trading house Mitsui & Co. Ltd has purchased a shale gas asset in Texas that it seeks to bring to full-scale development after 2026, Bloomberg reported. The purchase price was not disclosed.

Mitsui’s US-based subsidiary purchased the 46,500-acre asset, named Tatonka, from Sabana LLC and Vanna LLC. It will drill wells to evaluate the site, which has access to liquefied natural gas export terminals and ammonia plants on the Gulf Coast.

Japanese companies are betting that demand for natural gas will remain strong in the energy transition, Bloomberg reported. Mitsui last year bought a 92% stake in a shale gas asset in South Texas from Silver Hill Eagle Ford, and Tokio Gas Co. acquired Rockcliff Energy for about $2.7 billion in a move to expand its US shale business.

Chile Wins US Tax Credits for Lithium Products

Chile, Lithium, News Briefs, Phosphate, South Korea, U.S.

Chile has reached an agreement with the US to allow battery component made from lithium to count toward tax credits under the US Inflation Reduction Act (IRA), according to Bloomberg.

A Chilean delegation led by Economy Minister Nicolas Grau negotiated a deal whereby value-added lithium products made in Chile will qualify toward US domestic sourcing requirements for use in electric vehicles, his ministry reported on July in response to questions. White House spokespeople didn’t immediately comment.

Chile’s government has been looking to leverage the world’s biggest lithium reserves to move further down the value chain, offering preferential metal prices for companies to make lithium iron phosphate for cathodes. So far, two Chinese firms have agreed to build such plants in Chile.

While raw materials produced by US trading allies clearly qualified for IRA treatment, there was less clarity on cathodes. Treating those components made in Chile as domestically sourced would make it more attractive for US and South Korean firms, for example, to invest in Chile, Bloomberg reported.

Despite a softening of the EV market that has sent prices of lithium tumbling, Chile has been drawing interest from Korean battery makers keen to develop processing plants there. Unlike with Chinese-run projects, lithium processed by Korean firms in Chile and shipped to the US would qualify for IRA incentives.

Mabanaft Seeks Approval for Ammonia Terminal

Ammonia, Europe, Germany, News Briefs

German energy company Mabanaft Group has submitted approval documents for the construction of an ammonia import terminal in Hamburg, Germany, to the Hamburg Authority of Environment, Climate, Energy and Agriculture (BUKEA).

The new terminal will be built on Mabanaft’s existing tank terminal Blumensand in the Port of Hamburg and will be used to expand hydrogen supply.

The project entails the modification of the existing jetty, the demolition of two existing large tanks, the construction of a new tank for the storage of ammonia, and the installation of pipelines for the transport of ammonia from the jetty to the ammonia storage tank. The facilities are scheduled to come on stream in 2027.

“With the planned import terminal in the Port of Hamburg, we have the opportunity to implement yet another piece of the energy transition and bring it to Hamburg,” said Philipp Kroepels, Mabanaft Director of New Energy. “Our import terminal aims to make innovative energy solutions, such as ammonia, available for shipping and for further processing into hydrogen.”

Dangote to List on Nigerian Exchange in 2025

Africa, News Briefs, Nigeria

Aliko Dangote, President of Dangote Group, announced the upcoming listing of its refinery and fertilizer companies, Dangote Petroleum Refinery & Petrochemicals and Dangote Fertiliser Ltd., on the Nigerian Exchange (NGX) in the first quarter of 2025.

“Our joy lies in fostering self-sufficiency for Africa and promoting a circular economy where mutual growth is achievable,” said Aliko Dangote. “Our export strategy aims to alleviate foreign exchange pressures on the economy. We hope to list the refinery and fertilizer on the NGX by the first quarter of 2025.”

The 650,000 barrels per day (BPD) Dangote Refinery is Africa’s largest oil refinery, while the Dangote Fertiliser plant in Lekki is Africa’s largest granular urea fertilizer complex, with a production capacity of 3 million mt/y.

Dangote Group began as a trading company in 1978 and has since expanded into a diversified conglomerate with investments spanning cement, agriculture, fertilizers, petrochemicals, oil and gas, auto assembly, and infrastructure.

China to Boost Funding to Cut Coal Emissions

China, Green Ammonia, Natural Gas, News Briefs

China is planning to increase financial support for projects to reduce emissions at coal power plants through methods including burning biomass and green ammonia, Bloomberg reported on July 15.

The first phase of projects starting construction next year will target a 20% reduction in emissions per unit of electricity generated, according to a joint release by the National Development and Reform Commission and National Energy Administration. By 2027, such upgrades should be able to reduce emissions intensity by 50%, potentially putting the plants on par with cleaner-burning natural gas.

The release did not indicate how much funding will be available for the transformation or how many coal power plants will be targeted.

The projects highlight China’s efforts to balance its climate goals with its reliance on the dirtiest fossil fuel. While coal’s share of power generation is shrinking amid a surge of new cheap wind and solar, government officials have said the fuel will remain essential to balancing those intermittent sources and providing energy security.

In addition to projects that would blend in as much as 10% of carbon-neutral fuels like biomass or green ammonia, carbon capture technology could also be used, according to the release.

Ammonia

Ammonia, Eastern Cornbelt, India, Indonesia, Market Watch, Middle East, Northwestern Europe, South Central, South Korea, Southeast Asia, Southern Plains, Tampa, U.S. Gulf, Western Cornbelt

US Gulf/Tampa:

It’s still early for news on the August Tampa ammonia price, but sources this week speculated that an increase from July’s $415/mt CFR settlement seems likely, citing stronger pricing in some international markets, a good response to recent fall prepay offers in the Midwest, and an uptick in fall pricing this week.

Eastern Cornbelt:

Ammonia fall prepay offers were reportedly up some $15/st, to $515-$520/st FOB terminals in Illinois and Indiana. No prompt or prepay ammonia price was reported at Lima, Ohio, during the week.

Western Cornbelt:

Ammonia prepay offers were up $15/st from last week, to $515/st FOB Nebraska terminals, $520/st FOB Palmyra, Mo., and $525/st FOB Iowa terminals.

Southern Plains:

Ammonia 4Q prepay prices in the Southern Plains were up slightly from last week. New offers were quoted at $480-$500/st FOB regional terminals, depending on location, up from initial offers last week at $470/st FOB Enid and Woodward, Okla., $480/st FOB Verdigris, Okla., and $490/st FOB Dodge City, Kan. Prompt tons were pegged at the $435/st level FOB Woodward.

Prompt ammonia pricing out of Gulf Coast terminals in Eastern Texas and Oklahoma continued at $380-$400/st FOB in mid-July.

South Central:

Limited prompt ammonia offers in the South Central region were quoted in the $350-$400/st FOB range at mid-month.

Northwest Europe:

A sale late last week to a German industrial buyer at $510/mt CFR Antwerp brought the Northwest European CFR ammonia market out of a long stint of illiquidity, pushing the range to $470-$510/mt CFR from the previous $460-$470/mt CFR.

Still, several market participants expressed doubts whether this level is repeatable. Natural gas prices in Europe have edged slightly higher, with the Dutch TTF forward month now at $9.45/MMBtu. However, downstream nitrates demand remains seasonally muted, so the fundamentals for further ammonia price increases are not quite there.

Southeast Asia:

TheSoutheast Asia ammonia market was unchanged at $350-$400/mt FOB for now, though producer indications have reportedly slipped below $400/mt FOB. CFR prices in destinations such as South Korea and Japan remain stable, supporting the current FOB range.

India: 

India imported 830,000 mt of ammonia in January-May, Trade Data Monitor reported, a 16% decline from the year-ago 983,000 mt. Saudi Arabia led suppliers with 372,000 mt, Oman shipped 198,000 mt, and Indonesia added 111,000 mt. May imports were 225,000 mt, down 7% from 241,000 mt in May 2023.

The influx of Iranian ammonia, in combination with other standard long-term contracts, has virtually killed the spot market, sources said. While the official import numbers do not record any product arriving from Iran, international traders said the Iranian product is sent to a third-party port before being forwarded to India, allowing the ammonia to be recorded as coming from a location other than Iran.

Middle East: 

Ammonia prices remained steady in the Middle East, though sources said Ma’aden’s return to normal production could soon lead to softening prices. Excess supply was reported in Southeast Asia, leaving no room for price increases. At the same time, threats to logistics in the Gulf of Aden have prompted many ship owners to avoid sending cargoes west of the Suez Canal.

Indonesia:     

January-May ammonia exports stood at 743,000 mt, Trade Data Monitor reported,a roughly 6% increase from the 698,000 mt shipped during the first five months of 2023. South Korea took 221,000 mt, followed by China with 160,000 mt. May exports of 152,000 mt were up by 50% from the 101,000 mt shipped in May 2023.

South Korea:

Trade Data Monitor reported January-June ammonia imports at 598,000 mt, a marginal increase from the 559,000 mt received in first-half 2023. Saudi Arabia topped the supplier list with 286,000 mt, and Indonesia added 243,000 mt.

June imports were 123,000 mt, up 21% from 102,000 mt in June 2023, while second-quarter imports firmed to 324,000 mt from 264,000 mt in April-June 2023.