All posts by hlancey@bloomberg.net

Potash, Lithium Miner Zangge Among Chinese Companies Charged with Back Taxes

Australia, China, Featured, Lithium, Potash

Local governments in China have asked several companies to pay tax bills dating back as far as the 1990s, including some fertilizer producers, Bloomberg reported on June 17, noting that the move underscores the need for funding due to China’s uneven economic recovery and persistent housing slump.

A number of listed firms have said in exchange filings in recent months that they have gotten government demands to pay tens of millions in back taxes and warned investors this could impact their earnings.

Among them is Zangge Mining Co., whose subsidiary Golmud Zangge Potassic Fertilizer Co. produces 2 million mt/y of potash at its 724-square mile mining area in Qarhan Salt Lake, in China’s western interior. Zangge also mines 10,000 mt/y of battery-grade lithium carbonate through its Golmud Zangge Lithium Co. Ltd. subsidiary.

China’s local governments are facing unprecedented pressure to expand revenues because economic growth is slowing and the contracting real estate market has sent income from land sales plunging, Bloomberg reported. An elevated debt stockpile is limiting their ability to leverage up further, forcing the central government to borrow more and give them the funds.

The tax recovery efforts are “likely due to the fiscal distress of local governments,” said Xing Zhaopeng, an analyst at Australia & New Zealand Banking Group. “I think they need some money by quarter end” because regional authorities usually pay contractors for government projects then, he added.

Local governments booked less than 5.8 trillion yuan in revenues under the general public budget and the government-fund account, which include taxes and land sales income, in the first four months of the year, according to Bloomberg. That figure was less than the roughly 5.9 trillion yuan in the same period last year, according to data from the Finance Ministry. Their spending also fell to just under 10 trillion yuan from 10.4 trillion yuan a year earlier.

V V Food & Beverage Co. said last week that a liquor-making unit was told to pay some 85 million yuan ($11.7 million) on income it “failed to disclose” for about 15 years starting in 1994. Zangge Mining, ChinaLin Securities Co., and Ningbo Bohui Petrochemical Technology Co. issued similar statements.

Ningbo Bohui Petrochemical said in a statement in late March that it objected to the tax authorities’ decision, saying it was based on a rule change made in 2023 and required a key product to be taxed at a higher rate. The back tax payment would drive the firm into losses for last year, it said. The company said in another statement last week that it would suspend production of the item from June 12.

OCP Breaks Ground on PPA Plant; First Phase Commissioning Expected in 2026

Africa, DAP/MAP, Featured, Lithium, Morocco, Phosphoric Acid

Morocco’s OCP Group SA announced on June 14 that it has broken ground on the first wholly-owned purified phosphoric acid (PPA) plant integrated to technical MAP in Jorf Lasfar.

The first phase consists of 200,000 mt/y P2O5 of pretreated phosphoric acid capacity, 100,000 mt/y P2O5 of PPA capacity, 100,000 mt/y of technical MAP capacity, and further downstream activities, including phosphate salts and lithium iron phosphate (LFP) capacities.

Commissioning of the first phase is scheduled for mid-2026 and marks the first step in building a Specialty Phosphate Complex within Jorf Lasfar. For the first phase buildup, OCP is assisted by JESA, a joint venture between OCP and WorleyParsons, an African leader in technology, design, engineering, and project delivery services, together with its affiliate JESA Technologies.

The Specialty Phosphate Complex at Jorf Lasfar is scheduled to commission between 2026 and 2029 and aims to support OCP’s efforts in addressing global sustainability challenges such as water saving agriculture, food conservation, and the global energy transition.

OCP last August announced plans to build four new plants to be completed by 2028 for the production of PPA and technical MAP (GM Aug. 18, 2023). OCP said the new production facilities will be built within the group’s existing industrial platforms, with the first PPA and the technical MAP units targeting an equivalent annual production capacity of 120,000-150,00 mt/y P2O5.

“The project is part of OCP’s strategy to meet the growing demand for use of PPA and technical MAP as captive inputs in other products such as lithium iron phosphate (LFP) batteries and phosphate salts, as well as the growing needs of horticulture and water-stressed agriculture markets around the world,” the company reported in August.

Biden Administration Expands Secondary Sanctions on Russia

Baltic Sea, China, Europe, Featured, Natural Gas, Russia, Ukraine

President Biden’s administration is expanding the use of secondary sanctions on Russia with an eye toward curtailing the sale of semiconductor chips and other goods to Russia, targeting third-party sellers in China and elsewhere as it looks to further choke off Vladimir Putin’s war machine in Ukraine, Bloomberg reported.

The new measures include all Russian companies, people, and entities that have been previously sanctioned, including banks Sberbank and VTB, increasing the risk to third-country financial institutions or companies who do business in the Russian economy. The measures also include sanctions on new Russian natural gas projects and Russia’s main stock exchange, the MOEX, as well as the National Clearing Center and the country’s main settlement depository.

“We are increasing the risk for financial institutions dealing with Russia’s war economy and eliminating paths for evasion, and diminishing Russia’s ability to benefit from access to foreign technology, equipment, software, and IT services,” Treasury Secretary Janet Yellen said in a statement. “Every day, Russia continues to mortgage its future to sustain its unjust war of choice against Ukraine.”

On the energy front, new measures target Russia’s planned liquefied natural gas (LNG) projects, including Obsky LNG, Arctic LNG 1, Arctic LNG 3 and Murmansk LNG. The measures also target seven LNG tankers at Russian shipyard Zvezda, including three vessels for an Arctic LNG 2 project hit by an earlier round of sanctions that prevented the start of exports from Russia’s newest LNG export plant.

New sanctions also target RusGazDobycha, which is Gazprom PJSC’s partner in a project to produce LNG and other products at Ust-Luga on the Baltic Sea, and insurer Sogaz. General licenses permitting trade in agriculture, medicine, and other forms of energy, including oil, remain in effect, according to Bloomberg.

The European Union is currently discussing proposals demanding companies enhance checks and making them responsible for the actions of firms they control. Several member states are pushing to water down these proposals, however, over concerns they place too heavy a burden on companies and are difficult to enforce.

The EU is also discussing sanctions on banks in third-party countries that are enabling some of these transactions by using Russian alternatives to the SWIFT payments system, which processes many international money transfers.

FuelPositive Installs First Modular Green Ammonia System in Manitoba

Canada, Carbon, Clean Ammonia, Featured, Green Ammonia, Low-Carbon

Green ammonia tech developer FuelPositive Corp., Waterloo, Ont., announced that it has successfully installed the world’s first farmer-owned Modular Green Ammonia production system on the farm of Tracy and Curtis Hiebert in Sperling, Man.

“June 11, 2024, marks a historic moment for FuelPositive as all containers of its first commercial-scale system were placed in their final positions on the Hieberts’ farm,” said Luna Clifford, FuelPositive’s Co-Founder and Chief Impact Officer.

Nelson Leite, FuelPositive’s Chief Technology Officer, said the containerized processing units were placed in their final positions on June 11 and the 90-ton storage tank arrived on June 12. Once commissioning is completed, he said the system will be ready for the production of green ammonia for multiple applications, including fertilizer and fuel for grain drying and internal combustion engines.

The first FP300 system (100 mt/y) was moved to FuelPositive’s 15,000-square-foot manufacturing facility earlier this year (GM Feb. 9, p. 31) for the Factory Acceptance Test (FAT), the final approval step before delivery and on-farm installation. The June delivery was pushed back from earlier hopes for delivery in March or April (GM Dec. 8, 2023) due to additional safety verification steps.

The FuelPositive system is designed to produce pure anhydrous ammonia from air, water, and electricity, effectively eliminating carbon emissions during the production process. The company purchased the technology in 2021 (GM April 9, 2021) and filed for a US patent several months later (GM June 11, 2021).

FuelPositive began taking presales orders for the green ammonia modules in 2022 (GM Sept. 23, 2022), estimating the initial base price of the system at C$950,000 at that time. The company in 2023 (GM Oct. 13, 2023) announced that it had received a funding grant of up to C$1.9 million through the Research and Innovation Stream of the Agriculture Clean Technology (ACT) Program, delivered by Agriculture and Agri-Food Canada (AAFC).

“Emissions in agriculture are hard to abate; farmers need accessible tools and solutions to meet the Canadian emission reduction targets set for them. FuelPositive is here to support farmers in mitigating greenhouse gas emissions,” said Clifford. “FuelPositive’s groundbreaking project, happening right here in Manitoba, could mean the beginning of a beautiful success story for the province and Canada.”

EverWind Releases Renderings of Green Fuels Project

Canada, Clean Ammonia, Green Ammonia, Green Hydrogen, Low-Carbon

EverWind Fuels Co., Halifax, Novia Scotia, on June 6 released site renderings of its green fuels project under development on the Burin Peninsula in Newfoundland and Labrador. The renderings leverage EverWind’s recent FEED completion on the first phase of its Point Tupper green hydrogen and ammonia project in Nova Scotia (GM April 12, p. 25).

“FEED completion is always an important milestone on any project, but it is exponentially more important when it’s a first-of-a-kind design in a new industry like green hydrogen and ammonia,” said Trent Vichie, CEO of EverWind. “The renderings for our project on the Burin Peninsula are based on over 110,000 hours of engineering that have gone into our Point Tupper Project but have been adjusted to reflect the massive size and scale of our project on the Burin Peninsula.”

EverWind has been advancing the development of its green hydrogen and ammonia project on the Burin Peninsula since early 2022. On Aug. 30 last year the company was selected as one of four successful proponents in the Crown Land for Wind Process administered by the Department of Industry, Energy and Technology.

EverWind has been focused on critical long lead development workstreams including its wind resource campaign. The company commissioned four meteorological towers (MET) in 2023 and is in the process of constructing an additional four MET towers and installing 2 LiDAR systems.

EverWind said it is now preparing to register its Environmental Assessment for the project in July 2024. Phase I of the project contemplates 3GW of wind energy, and combined the multiple phases represent nearly 10GW, EverWind said. Combined, EverWind said it is actively developing a pipeline of over 15GW of renewables across Atlantic Canada.

“This project represents the future for the Burin Peninsula – the jobs and the economic opportunities that our region has been losing for decades,” said Dave Pittman, Mayor of Winterland and member of the Burin Peninsula Energy Board. “I know there is a tremendous amount of work left to bring the project to our peninsula, but these renderings are an exciting glimpse into the future we hope to see.”

Phase 1 of the Point Tupper Project will use PEM electrolyzers to separate water from the nearby artificial Landrie Lake, using renewable electricity generated by wind power. The project is expected to produce 240,000 mt/y of green ammonia. Production is expected to begin in 2026.

India Seeks Green Ammonia Bids for Fertilizer

Clean Ammonia, Green Ammonia, Green Hydrogen, India, Low-Carbon

The Indian state-owned Solar Energy Corporation of India (SECI) is inviting bids for ammonia producers to supply 5.39 lakh mt/y of green ammonia, which is equal to 539,000 mt/y. SECI issued a Request for Selection (RFS) for green ammonia producers for cost-based competitive bidding under the SIGHT program implemented by the Ministry of New and Renewable Energy.

The green ammonia that is being bid is expected to be used at fertilizer companies, with delivery points at eleven existing fertilizer plants along India’s east and west coasts.

The auction requires that successful bidders begin to supply all the capacity they had quoted within three years of signing the contract. If a bidder chooses not to produce ammonia in a location at a fertilizer use point, they must factor in transportation costs to their bid.

Under the SIGHT program, the Ministry of New and Renewable Energy has already allocated 4.12 lakh mt/y of green hydrogen capacity and 1.5 GW per year of electrolyzer manufacturing capacity.

Frontier Invests in Carbon Negative Fert Company

Carbon, Clean Ammonia, Low-Carbon, Nitrogen, NPK, Phosphate, Potash

UK-based crop production company Frontier has announced an investment in CCm Technologies, an environmental technology company that has engineered a process to capture CO2 from the atmosphere with recycled nutrients from agricultural waste, resulting in an “organo-mineral fertilizer.”

The flagship product is CCm Growth®, which contains nitrogen, phosphate, and potash but also holds fiber to deliver organic matter and carbon back to the soil to improve soil health and sustainability. An analysis by The Carbon Trust showed the footprint of the product is not only low, but negative, as it takes carbon out of the atmosphere and adds it to the soil.

Frontier will have an exclusive distribution agreement for CCm Growth across England, Scotland, and Wales. The product has been in collaborative testing from Frontier and CCm Technologies since 2021 and has demonstrated positive results for both harvests in 2022 and 2023, Frontier reported.

“There’s nothing like this product on the market today, which is why we’re excited to see how it performed in comparison to standard nitrogen and NPK fertilizers,” said Edward Downing, Frontier National Crop Nutrition Technical Manager.

Shipper Orders Ammonia-Propulsion Carriers

Ammonia, Carbon, Clean Ammonia, Low-Carbon, South Korea

Capital Product Partners L.P., an international shipping company based in Greece, announced an investment in 10 new gas carriers, including four Liquid CO2 Handy Multi Gas Carriers (LCO2s) that have options for ammonia propulsion and/or onboard carbon capture.

The LCO2s are unique vessels that can transport liquid CO2, LPG, and ammonia with capacities to move more than 1 million mt/y of liquid CO2.

The four vessels will be produced at the Hyundai Mipo Shipyard in Ulsan, South Korea, and will have a size of 22,000 cubic meters. Each vessel has a contract price of $78.2 million. Delivery is expected in January 2026 for the first vessel and November 2026 for the last of the four.

Verdesian Life Sciences – Management Brief

Latin America, Management Briefs, South America, U.S.

Nutrient use efficiency company Verdesian Life Sciences, Cary, N.C., on June 18 announced the appointment of Wendy Shusko as Chief Financial Officer. In her role, Shusko will oversee corporate finance, financial planning and analysis, tax, accounting, internal audit, and risk management.

“We’re excited that Wendy has joined the Verdesian team,” said Verdesian CEO Clare Doyle. “Wendy’s leadership and expertise will be a major asset to us as we continue to grow our business globally.”

Shusko brings more than 35 years of financial experience to Verdesian, most recently serving as CEO and CFO of STATinMED, a life sciences data and insight organization. She began her career with Shire Pharma, holding multiple financial leadership roles before becoming President and CEO of WellSpring Pharmaceutical. She also serves as board member of privately held Sheffield Pharmaceuticals. Shusko attended the University of North Carolina Wilmington and Rutgers University, studying accounting. She will be based out of the company’s Cary office.

Verdesian has made other recent changes to its executive leadership team. In March the company promoted Sergio Melloni to the role of Vice President, South America and Latin America, and added Avinash (Avi) Deshmukh as Vice President, Global Marketing. Also in March, Sudhir Shinde was appointed Vice President, EMEA and Asia Pacific.

Melloni joined Verdesian in 2018 and previously served as Managing Director, South America, with earlier roles at Monsanto and Novozymes. Deshmugh held prior roles at Cyanamid India, BASF, and UPL, while Shinde was formerly with UPL and held prior roles at Monsanto, FMC, Novozymes, and Sumitomo Chemicals.

Omya Completes First Upgrades to Granulation Plant

News Briefs, Switzerland

Swiss-based specialty chemical producer Omya reported that it has completed the first phase of upgrades at its specialty fertilizer granulation plant in Wathena, Kan. Omya acquired the Wathena facility from MK Minerals in May 2022, and has committed $6 million in investment to plant assets and infrastructure through 2024.

The facility produces granulated products made from limestone, gypsum, or dolomitic lime for the agriculture and turf and ornamental markets. The first phase of enhancement projects focused on health and safety upgrades, repairs and maintenance throughout the property, supply chain efficiency, and product quality and process improvements, including the installation of advanced controls on dust collectors.

A new hiring campaign has also increased the workforce by 40%, Omya reported, offering pay above the community average.

Omya said it plans to transform the facility into a world-class producer of crop nutrition and soil conditioning products for growers of row and specialty crops, turfgrass, and the home retail industry. Omya said it chose the Wathena location to anchor its growing presence in the US heartland.