Nutrien Ag Solutions plans to expand its retail location in the Village of Clyde in central Alberta by moving an existing anhydrous ammonia storage tank to the site from Dapp, Alta., according to Town and Country Today.
The move is expected to allow the company to broaden its service area and more efficiently maintain the tank. Completion of the move is expected in August. Moving a tank northwest of Westlock to Clyde is also under consideration for next year.
Ag and fertilizer equipment provider Ag Growth International Inc. (AGI), Winnipeg, Man., confirmed on May 29 that it has received and rejected an unsolicited, nonbinding, and conditional proposal to purchase the company.
AGI was responding to media reports and said it is not in discussions with any third party, nor is there any agreement, understanding, or arrangement with respect to any proposal. AGI shares jumped 13% after it made the announcement, to C$52.10 from C$46.02, the biggest increase in four years, according to Bloomberg.
AGI said it does not intend to make any further public announcements regarding any rumors or speculation unless it determines that disclosure is warranted and in accordance with the requirements of applicable law. AGI has manufacturing facilities in Canada, the US, Brazil, India, France, and Italy and distributes its products worldwide.
Russian nitrogen and phosphate producer PhosAgro reported first-quarter EBITDA of RUB39.1 billion ($0.43 billion), down 29.5% from last year’s first quarter. The year-over-year decrease was attributed to lower fertilizer prices in global markets and the payment of export duties introduced in 2023.
PhosAgro reported a 6.9% year-over-year production increase, to 3 million mt, driven mainly by a 9.2% increase in the production of phosphate-based fertilizers and feed phosphates, to 2.3 million mt.
Fertilizer sales in the quarter exceeded 3 million mt, up 11.4% from last year’s first quarter, while phosphate sales rose 16% year-over-year. First-quarter revenue was reported at RUB119.3 billion ($1.31 billion), an increase of 2.7% from last year due to the increased production and sales.
PhosAgro posted average prices in the first quarter of $515/mt FOB Baltic for MAP, $535/mt FOB Baltic for DAP, $293/mt FOB Baltic for prilled urea, and $224/mt FOB Baltic for ammonium nitrate.
Polish chemical and fertilizer major Grupa Azoty published first quarter results on May 28. Despite a 1Q net loss of 333 million zlotys ($88 million), the fertilizer and ag division yielded a positive EBITDA of 27 million zlotys ($6.8 million).
Grupa Azoty said it increased fertilizer sales volumes towards the end of the quarter despite Polish farmers reducing their spending and deferring purchases due to lower crop prices. The Polish producer cited encouraging higher urea prices but also high competition from Russian and other FSU imports.
The company also mentioned ongoing work to devise a turnaround plan and even the potential to sell some assets or enter joint ventures to capitalize on synergies, as they believe the weaker 1Q performance will be difficult to make up for in the remainder of the year.
Grupa Azoty is the largest chemical company in Poland and is a major producer of fertilizers, plastics, chemicals, oxo alcohols, and pigments. The group is the second largest fertilizer producer in the EU, with a combined annual capacity of nearly 1.8 million mt of urea, 4.9 million mt of nitrates, and 2.7 million mt of ammonia.
Lithuania’s phosphate producer Lifosa announced on May 27 that it was gearing up to restart production following a shutdown for scheduled maintenance in May 2023. The plant, located in Kedainiai in central Lithuania, is owned by EuroChem Group AG and has an annual capacity of 990,000 mt of DAP and 850,000 mt of phosphoric acid.
Final decisions on the company’s future operations are expected in “a matter of days rather than weeks or months,” said Vitalijus Varnas, Chairman of Lifosa’s independent trade union, noting that this would depend mainly on whether banks would not suspend the company’s payments.
Lifosa’s accounts were frozen after the EU imposed sanctions on Andrey Melnichenko, EuroChem’s main beneficiary, on March 9, 2022 (GM March 11, 2022) following Russia’s invasion of Ukraine. Melnichenko withdrew as main beneficiary of the group and resigned his position as Non-Executive Director following his inclusion on the EU’s expanded sanctions list.
The Lifosa plant was acquired by EuroChem in 2002. EuroChem announced last July (GM July 7, 2023) that it planned to mothball the Lifosa fertilizer facility due to the impact of sanctions, which the company said has prevented normal and profitable operations at the site.
Lifosa had been under the control of a temporary administrator since the end of May 2022. Production resumed in August 2022 but was halted in mid-September of that year due to a shortage of critical raw materials, including ammonia, and high natural gas prices (GM Sept. 9, 2022).
EuroChem then announced in November 2022 that it was completing preparations to restart Lifosa again in December at a reduced capacity, assuming critical raw materials could be secured (GM Nov. 18, 2022). The plant then went offline in May 2023.
Italian-Thai Development (ITD) said the company is entering the “final stages” of negotiations with an investor for its Thailand potash mining unit, Asia Pacific Potash Corp., according to Bloomberg, citing an exchange filing.
ITD said the investor passed the selection process by offering partial co-investment in the mining unit. The company said it would disclose details to the stock exchange after finalizing the negotiation. ITD issued the statement after Bloomberg reported that China’s SDIC Mining Investment Co. is in advanced talks for a significant minority stake in the unit (GM May 24, p. 27).
Copper behemoth National Copper Corp. of Chile (Codelco) may soon become a major global lithium player after signing a partnership that will give the state-owned company a majority stake in SQM’s prized Chilean brine assets, according to Bloomberg.
A definitive agreement announced on May 31 ratifies a preliminary accord forged between the two firms late last year (GM Jan. 5, p. 1). The deal is a pillar of Chilean President Gabriel Boric’s agenda to have more state control in key lithium assets while boosting production of the battery metal in the transition away from fossil fuels.
World No. 2 lithium supplier SQM will relinquish a majority stake in its assets on the Atacama salt flat in exchange for three more decades of operations in one of the world’s richest sources of lithium. Its current contract expires in 2030. The agreement also pertains to potassium and other products that are extracted from the salt flats.
SQM shares rose 1.5% in premarket trading in New York on May 31.
The deal clears the way for the new public-private partnership to ramp up production at the Atacama operation from less than 200,000 mt/y toward 300,000 mt/y, thereby giving battery makers greater assurances on future supplies of a key raw material. A global lithium glut that drove down prices is still working its way through supply chains, but SQM is expecting buyers to come back into the market, forecasting demand to rise 20% this year.
The partnership will take the form of a joint venture, in which Codelco will own 50% of the shares plus one. Operational control will be in the hands of SQM through 2030, then Codelco through 2060.
There are still potential obstacles ahead of its implementation next year, including an indigenous consultation process as well as permitting. Increased production would come from efficiency gains and new technologies rather than greater brine extraction.
The two new partners will also be waiting for a decision by Chile’s securities regulator after SQM’s second-largest shareholder, Tianqi Lithium Corp., requested the deal go to a stockholder vote, alleging SQM failed to disclose key terms during the negotiation process. It bought a 22% stake in SQM for $4 billion in 2018.
Terms of the arrangement attempt to address concerns raised by some lawmakers that current boardroom restrictions on SQM’s top shareholder, Julio Ponce, and his immediate family members should also be reflected in the Codelco arrangement.
While the document released on May 31 doesn’t name Ponce, it states that board members of the new venture can’t have served as Codelco or SQM directors for more than 10 years, which would effectively rule out the former son-in-law of dictator Augusto Pinochet.
Defending criticism that the deal favored SQM, Pacheco has said in recent months that the Chilean state will initially receive about 70% of proceeds from new production, which will increase to 85% in 2031.
Bayer AG CEO Bill Anderson on May 23 said the wave of lawsuits over its Roundup weedkiller is an “existential” threat to the company and farmers, threatening innovation, with the costs exceeding those for R&D.
“The glyphosate litigation topic is an existential topic for our company because it does threaten to remove our ability to continue to innovate for farmers and for food security,” Anderson said in a speech at the Executives’ Club of Chicago, referring to Roundup’s key ingredient.
The chemical conglomerate is spending more on lawsuits than the $2.6 billion a year spent on R&D, the CEO said. He said Bayer is the largest R&D investor in agriculture, and the legal issues put at risk the progress needed to feed an exploding world population by mid-century with less water and land.
“This is actually something very serious for American agriculture,” he stressed. “It’s been estimated that the cost of groceries for the average family of four in the US would go up by more than 40% if glyphosate were removed from the agriculture system.”
Crops genetically modified to withstand the application of glyphosate weedkiller account for almost all of the corn and soybean plantings in the US and Brazil. Anderson said that despite the US’s scientific and regulatory communities giving a green light to glyphosate, the company is still subject to billions of dollars every year in lawsuits.
Bayer inherited the Roundup lawsuits through its 2018 purchase of agriculture behemoth Monsanto for $63 billion. The German company’s shares have lost more than 70% of their value since the Monsanto purchase.
Anderson’s predecessor, Werner Baumann, generally stopped short of warning that the company’s existence was threatened, even as the legal woes mounted. Bayer has set aside $16 billion to resolve Roundup suits. About $10 billion of that reserve has been spent so far, a company spokesman said.
Investor concern has grown about Bayer’s liability, eventually leading to the departure of Baumann. In addition to the legal woes, the company has been grappling with other problems, including a weak drug pipeline and high debt.
Bayer has vigorously defended its claim that glyphosate and glyphosate-based formulations are safe, and the chemical remains in widespread use across much of the world.
Bayer is ratcheting up the stakes as it considers a controversial legal maneuver known as the Texas Two-Step bankruptcy, which would allow it to settle tens of thousands of US lawsuits claiming that Roundup causes cancer, people familiar with the company told Bloomberg in March (GM March 15, p. 1).
The Texas Two-Step gets its name from the use of a state law that lets companies split their assets and liabilities into separate units, then place the part loaded with liabilities into bankruptcy to drive a global settlement.
Such a move, if successful, could permit other parts of Bayer, a major pharmaceutical and consumer health company, to keep operating normally. But courts have rejected the tactic by 3M Co. over suits targeting faulty hearing protection devices for US soldiers and by Johnson & Johnson in litigation tied to its talc-based baby powder.
Bayer agreed to transition from the glyphosate-based version of Roundup to new active weed-killing ingredients in the US consumer market by the end of last year. The company still sells glyphosate-based herbicides for agricultural markets, however, and the European Union late last year authorized sales for another decade.
Bayer has also sought a legislative solution with at least a handful of states mulling bills in recent months that would shield the company from lawsuits alleging liability due to Roundup (GM April 26, p. 29).
Negotiations continued this week between The Teamsters Canada Rail Conference (TCRC) and Canadian National (CN) and Canadian Pacific Kansas City (CPKC) railroads to avert a strike that TCRC had earlier warned could happen as soon as May 22 (GM May 3, p. 1).
While the two sides remained at an impasse following a revised proposal from CN on May 16 and an offer from CPKC on May 15 to enter binding arbitration to avoid a work stoppage, CPKC reported that a legal strike or a lockout would not likely occur before mid-July, based on timelines around an expected ruling from the Canadian Industrial Relations Board (CIRB) on whether a strike would have safety implications.
The CIRB has requested submissions from the railroads and the TCRC, as well as other interested stakeholders, by May 21, and the parties will have until May 31 to file replies. According to CPKC, a legal strike or lockout cannot occur until the CIRB renders a decision, followed by a 72-hour notice as required by the Canada Labour Code.
“Recognizing our supply chains require certainty, now more than ever, CPKC has proposed to the TCRC that both parties agree on the services that should be maintained in the event of a strike or lockout,” CPKC said in a statement. “We believe this would eliminate the need for the CIRB referral process and bring much needed clarity regarding the timing of any potential strike or lockout.”
“If no maintenance of services agreement is reached, based on precedent, it is unlikely the parties will be in a position to initiate a legal strike or lockout within the next 60 days,” CPKC added.
The threat of a rail strike continues to raise alarms from Canadian industry groups, however, including Fertilizer Canada.
“The fertilizer industry is very concerned by the potential for disruptions at both CN and CPKC railways and the devastating impacts that these disruptions will have on the fertilizer industry, Canada’s economy, and domestic and international food security,” Fertilizer Canada said in a May 23 statement to Green Markets.
“Canadian, American, and
international farmers rely on Canadian fertilizer to maximize crop yields and
the fertilizer industry relies on rail to get our products to market,”
Fertilizer Canada said. “The current situation with the involvement of the
Canadian Industrial Relations Board adds additional uncertainty for businesses.”
Fertilizer Canada is urging the Canadian government to use “all its tools
available” to ensure both parties reach an agreement.
“To address the repetitive and frequent supply chain disruptions, we are asking the government to strengthen the collective bargaining process for those working in Canada’s supply chain and for industry predictability,” Fertilizer Canada said. “As well, to protect food security, we are asking the government to recognize fertilizer as an essential good that should continue to ship during work stoppages.”
The National Grain and Feed Association (NGFA) also issued a statement on May 22 urging CIRB to take action to head off a railroad strike or lockout. Shutdowns or slowdowns of rail-dependent facilities would result “in harmful consequences for Canada’s agricultural producers and industry as well as domestic and global food security,” the NGFA said.
“A stoppage of rail service would materially harm Canada’s farmgate prices for commodities, Canada’s ag shippers and exporters, and its global customers,” the NGFA said. “The impact of a strike would be particularly severe as trucking is not a viable option for many agricultural shippers due to their high-volume needs and the long distances for many of the movements.”
Global shipping company Maersk reported on May 9 that it was “working closely” with CN, CPKC, and terminal operator DP World to speed up Canadian West Coast port operations to reduce congestion, including diverting cargo from Centerm in Vancouver to Prince Rupert, B.C.
CHS and West Central Ag Services, a cooperative based in Ulen, Minn., with nine agronomy centers in northwestern Minnesota, have signed a nonbinding letter of intent for West Central to join CHS to better serve owners and customers and position the co-op for future growth.
“Our two cooperatives are aligned in our vision to advance the cooperative system and best serve our owners by connecting our producers to the global marketplace,” says Duane Brendemuhl, West Central Board President and Chair. “This proposed transaction provides an opportunity to bring more value to our farmer-owners and compete more effectively with other local ag companies, while positioning us for the future success of a combined cooperative through efficient, globally connected supply chains.”
CHS said the proposed transaction aligns with strategic investments for CHS to grow the global agricultural supply chain while providing end-to-end value and enhanced market access for the cooperative system. CHS and West Central are already partners in an agronomy joint venture based in Hannaford, N.D. (GM Dec. 9, 2010).
“CHS and West Central Ag Services have a longstanding, strong relationship based on mutual trust and respect, as evidenced by our joint venture Central Plains Ag Services,” said Rick Dusek, Executive Vice President of Ag retail, Distribution and Transportation at CHS. “Better connecting the global agriculture supply chain and investing in the speed and space of our assets provides better market access and creates more value for farmer-owners.”
CHS and West Central Ag said they will now begin due diligence on the proposed transaction, which is subject to necessary approvals.
