All posts by jlarareo@bloomberg.net

Rail Union Files Appeals Challenging Binding Arbitration Order

Canada, Featured, News

The Teamsters Canada Rail Conference (TCRC) on Aug. 30 filed appeals with Canada’s Federal Court of Appeal challenging the decisions that led to binding arbitration being imposed on workers at Canadian National Railway Co. (CN) and Canadian Pacific Kansas City Ltd. (CPKC), which the union described as “effectively stripping them of their right to collectively bargain.”

The union filed four separate appeals challenging Labor Minister Steven MacKinnon’s referrals and the Canada Industrial Relations Board’s (CIRB) decision ordering employees back to work at CN and CPKC less than a day after more than 9,000 union members went on strike and both railroads issued lockout notices (GM Aug. 23, p. 1). The appeals argue, among other things, that workers’ charter rights were violated.

“These decisions, if left unchallenged, set a dangerous precedent where a single politician can bust a union at will,” said Paul Boucher, TCRC President. “The right to collectively bargain is a constitutional guarantee. Without it, unions lose leverage to negotiate better wages and safer working conditions for all Canadians. We are confident that the law is on our side, and that workers will have their voices heard.”

ADNOC Buys 35% Stake in Exxon’s Texas Hydrogen Plant

ADNOC - Abu Dhabi, Featured, Hydrogen, Low-Carbon, News

Abu Dhabi National Oil Co. (ADNOC) has agreed to take a 35% stake in ExxonMobil Corp.’s proposed hydrogen project in Baytown, Texas, which is likely to be the world’s biggest once built, Bloomberg reported on Sept. 4.

The backing from the United Arab Emirates’ national oil company is “another proof point of the overall momentum” behind the project, Dan Ammann, President of Exxon’s Low Carbon Solutions division, said in an interview. Exxon sees the plant starting up around 2029, about a year later than originally planned in part due to a disagreement with the Biden administration over whether the facility qualifies for tax credits under the Inflation Reduction Act.  

ADNOC is the third major industrial partner to join Exxon’s project, which would produce 1 billion cubic feet of hydrogen per day and 1 million tons of ammonia a year. JERA Co., Japan’s biggest power provider and a joint venture between Tokyo Electric Power Company Holdings and Chubu Electric Power Co., signed a non-binding agreement in March to buy half of the ammonia (GM March 15, p. 27).  In June Air Liquide SA said it could use its pipelines.

The project will provide hydrogen for the refinery and local users and ammonia for export, said Michele Fiorentino, ADNOC’s Executive Vice President for Low-Carbon Solutions and Business Development.

“We’re really looking at building a portfolio of blue hydrogen supply capabilities,” Fiorentino said. “We’re developing production capacity in what we estimate being the most cost competitive regions to do so,” which he said are the US and ADNOC’s home in the Persian Gulf.

This would be ADNOC’s second acquisition in the US after the UAE oil giant in May agreed to buy a stake in NextDecade Corp.’s liquefied natural gas export project in Texas. The UAE, first among major Gulf oil producers to declare a 2050 net zero target, is looking to technologies like hydrogen and carbon capture to help cut emissions even as it looks for ways to keep selling hydrocarbons to new industries.

The main sticking point for the Texas facility remains the government’s 45V tax credit. Under the current guidelines, incentives are earmarked for projects that produce so-called green hydrogen by using water and renewable energy. Exxon’s plant will produce blue hydrogen from natural gas, which creates carbon dioxide emissions. Still, executives believe it should qualify for the tax credits because an accompanying carbon capture project would remove 98% of those emissions. 

“We think that the policy and the incentives in place to support the creation of these new value chains should be technology agnostic,” Ammann said. “They should be focused on which projects can deliver what levels of carbon intensity regardless of the means by which they get there.”

Anglo Forms Polyhalite Partnerships with Sinochem, BeiFeng

Featured, News, Polyhalite

Anglo American Plc, which owns the Woodsmith polyhalite project in northeast England, has signed Memorandums of Understanding (MoUs) with two major Chinese fertilizer companies, Sinochem Fertilizer and BeiFeng AMP, to further develop the market for polyhalite in China, according to an Aug. 30 announcement from Anglo.

Sinochem, a member of Syngenta Group, is the largest distributor of agricultural inputs in China, with sales covering 95% of China’s arable land. BeiFeng is the third largest fertilizer distributor in the county, with operations focused in the three northeastern provinces known as the country’s “grain barn.”

“China is a key customer for us in our ambition to be a leader in sustainable crop nutrition,” said Tom McCulley, CEO of Anglo’s Crop Nutrients business. “Given our Crop Nutrients business forms part of Anglo American’s exceptional growth trajectory over the next decade, we are continuing to foster strategic partnerships across the agricultural industry to prepare the market for the full range of commercial and environmental benefits that polyhalite can offer farmers and the entire food value chain.”

Under the agreements, the parties will collaborate on the promotion and development of low-carbon fertilizer products and practices and the establishment of polyhalite product standards in China. This will include joint commercial-scale demonstrations and further research on crops such as corn, soybeans, potatoes, rice, apples, citrus, and grapes.

“As a leading fertilizer distributor in China, Sinochem Fertilizer has significant advantages in production, R&D and marketing. We are delighted to collaborate with a company like Anglo American, which shares our vision and strategic goals,” said Tielin Wang, Vice President of Syngenta China and General Manager of Sinochem Fertilizer.

“The signing of this MoU marks an initial achievement in our mutually beneficial partnership,” Wang continued. “We are eager to move beyond the agreement on paper to practical implementation, continuously advancing our collaborative projects. By leveraging our combined strengths, we’re working together towards our goal to create substantial value for Chinese farmers.”

Anglo said its global market development program for polyhalite now totals over 2,000 commercial-scale demonstrations in 40 countries across more than 80 different crops, involving approximately 350 distributors, retailers, cooperatives, blenders, and manufacturers, as well as farmers, universities, NGOs, global research institutions, media, and membership associations.

Compass Minerals Inks Salt Lake Conservation Agreement

Featured, News

Compass Minerals, Overland Park, Kan., announced on Sept. 3 that it has executed a binding voluntary agreement with the Utah Division of Forestry, Fire and State Lands (FFSL) outlining water and land conservation commitments the company is making toward the health of the Great Salt Lake.

“The Great Salt Lake is a vital ecosystem and economic engine that we must all work to protect, and Compass Minerals stands with the many diverse stakeholders contributing toward the preservation of this globally significant resource,” said Edward C. Dowling Jr., Compass President and CEO. “Through this Voluntary Agreement, we commit to significant contributions toward lake health, while also ensuring future predictability in our water use allotment that supports sustainable production at our Ogden facility.”

Under the agreement, Compass will donate non-production-related water rights totaling approximately 201,000 acre-feet annually to be used by the State of Utah for lake conservation and preservation. Additionally, the company will remit back to Utah nearly 65,000 acres of leasehold, also currently not utilized for production, which will be set aside for conservation and other beneficial uses according to FFSL’s existing management authority.

In addition, the agreement outlines a progressive set of brine withdrawal caps for certain of Compass’s consumptive water rights, based on annual lake elevation and informed by the Great Salt Lake Strategic Plan. Compass said it does not expect these consumption caps to materially impact its essential mineral production on the Great Salt Lake unless lake elevations were to fall to historic lows.

“This agreement is an example of the good we can accomplish when public and private come together to be a part of the solution,” said Utah Gov. Spencer J. Cox. “The donation from Compass Minerals will ensure that water delivered to the Great Salt Lake will remain in the lake. We look forward to the lasting benefit this will make toward the health and sustainability of the lake for generations to come.”

Compass and FFSL entered into a term sheet in early March 2024 establishing the framework for negotiations on a binding agreement. As part of its regulatory authorities, FFSL is responsible for managing Utah’s sovereign lands, including the beds and banks of navigable rivers and lakes within the State.

“When lake levels are high, Compass can withdraw up to its existing water right, just as they could always do – but in years with lower lake levels, they have committed to decreasing their water use – or suspending it completely if the lake reaches the critical levels we experienced several years ago,” said Jamie Barnes, FFAL Director.

Compass’s Ogden facility has operated on the Great Salt Lake for more than half a century producing sulfate of potash, salt, and magnesium chloride from the lake’s mineral-enriched brine. The company’s Ogden operation currently provides nearly 400 local jobs.

Lower Sales Volumes, Production Impact Itafos

Houston, TX, News, News Briefs, Phosphate

Houston-based Itafos Inc. reported second-quarter revenues of $105.1 million and net income of $16.2 million, down from $116.1 million and $20.4 million, respectively, in last year’s second quarter. Adjusted EBITDA came in at $32.8 million, compared with $39.7 million last year.

Itafos attributed the results to lower sales volumes driven by lower production at its Conda phosphate fertilizer project in Idaho due to the completion of a large-scope turnaround in 2024, which was partially offset by slightly higher realized prices.

“We are extremely pleased to report on the significant progress we have made on the execution of our strategic priorities in Q2, 2024,” said Itafos CEO David Delaney. “On the back of positive market fundamentals, the company continues to report strong operational and financial performance.”

Itafos said it continues to build out infrastructure and work towards realizing the H1/NDR project and extending the mine life of Conda to 2037, an estimate confirmed by an updated NI 43-101 Technical Report the company received in April. Itafos said the project remains on schedule and on budget to deliver first ore from H1/NDR in the second half of 2025.

Conda produced 69,532 mt P2O5 in the second quarter, compared with 83,190 mt last year, and generated revenues of $101.8 million and adjusted EBITDA of $37.2 million, down from $112.9 million and $44.6 million, respectively, in last year’s second quarter.

Itafos on Aug. 5 reported that it has entered into an agreement to sell its 100% interest in the Araxá project in Brazil, a rare earth elements and niobium mine and extraction project located in Minas Gerais State, to a wholly-owned subsidiary of St George Mining Ltd. The sale is structured as a cash and equity transaction consisting of a total cash purchase price of $21 million and securities of St. George.

“We are also pleased to announce the sale of our Araxa project, which will unlock value associated with our overseas asset portfolio,” Delaney said. “As we progress through 2024, the Board and Management will continue to focus on creating shareholder value.”

Itafos’ Arraias phosphate operation in Tocantins, Brazil, produced 16,652 mt of sulfuric acid in the second quarter, nearly double last year’s 8,523 mt, as well as 3,794 mt P2O5 of Direct Application Phosphate Rock (DAPR), compared with zero last year. Adjusted EBITDA for Arraias was a $0.5 million loss compared with an $0.8 million loss last year.

For the first half, Itafos posted revenues of $233.1 million and adjusted EBITDA of $76 million, down from $235.7 million and $82.6 million, respectively, in 2023. Net income for the first six months was $39.9 million, down from $48.6 million last year. Itafos cited lower realized prices at Conda, partially offset by higher sales volumes at Conda and higher sulfuric acid sales at Arraias.

Looking ahead, Itafos said it expects minor increases in MAP pricing going into the fall due to low on-site inventory and a productive autumn application season. The company said it expects low inventory levels in the North American market, continued strength in global demand, and ongoing export restrictions from China to support global phosphate pricing through the end of 2024.

Itafos plans to open a new sales office in Luís Eduardo Magalhães, in the western region of Bahia, in October 2024.

Contract Awarded for Jansen Stage 2 Project

News, News Briefs, Potash, Saskatchewan

Stockholm-based engineering group Sandvik announced on Sept. 3 that it has been awarded a major contract from BHP Group Ltd. for the Jansen Stage 2 Potash Project in Saskatchewan. The contract, which includes potash continuous mining systems, is valued at approximately SEK1.9 billion ($184.7 million).

Sandvik said an order value of approximately SEK500 million ($48.6 million) will be reported in the third quarter of 2024, and approximately SEK400 million ($38.9 million) in each of the second and third quarters of 2025. The remaining order value is estimated to be booked in the second quarter of 2026. The delivery period is expected to commence in 2028 and conclude in 2029.

The new contract follows an SEK2 billion ($194.4 million) contract announced in 2022 for Jansen Stage 1, which is currently being executed. Sandvik said it has been collaborating with BHP for several years to develop the underground mining equipment.

“We are very pleased to continue our partnership with BHP and look forward to further strengthen our collaboration with the supply of our high-performing mining solutions for Stage 2 of the Jansen project,” said Mats Eriksson, President of Sandvik Mining and Rock Solutions.

BHP’s $14 billion Jansen potash mine in Saskatchewan is expected to produce 4.15 million mt/y, with first production targeted for the end of calendar year 2026. BHP in July reported that Jansen Stage 1 remains ahead of schedule and is now 52% complete (GM July 19, p. 27). Jansen Stage 2, which reached final approval in October 2023, is now 2% complete and expected to be up in fiscal year 2029.

Bion Secures OMRI Listing for Nitrogen Fertilizer

News, News Briefs, Nitrogen

Bion Environmental Technologies Inc., a developer of advanced livestock waste treatment and resource recovery technology, announced on Aug. 27 that its commercial 10-0-0 liquid nitrogen fertilizer is now OMRI listed for use in organic production.

Bion applied to the Organic Materials Review Institute (OMRI) in March for the listing for 10-0-0 (GM March 15, p. 30), which is produced from livestock waste using Bion’s patented Ammonia Recovery System (ARS).

According to Bion, ARS stabilizes the ammonia nitrogen from manure with carbon dioxide, converting it to ammonium bicarbonate, a 100% soluble nitrogen fertilizer. Bion said ARS reduces the carbon footprint associated with current organic systems and significantly reduces nitrogen runoff and off-gassing to protect surface waters, aquifers, and the atmosphere.

Bion said the nitrogen fertilizer produced from ARS is pathogen free, unlike manure, and can be applied at any time through standard drip systems, field irrigation, soil injection, sidedressing, and foliar spraying.

Bion said it will initially focus on several markets for its OMRI listed fertilizers, including production of high-value specialty crop fruits and vegetables, organic corn sidedressing, and hydroponic and greenhouse applications. Bion said it is also evaluating opportunities in regenerative practices that include fertilized pastures to graze cattle.

Incitec Upgrades Fertilizer Facility in Victoria

Australia, News, News Briefs

Incitec Pivot Fertilizer (IPF), the fertilizer business of Melbourne-based Incitec Pivot Ltd. (IPL) and the largest supplier of fertilizer on Australia’s East Coast, announced on Aug. 28 that it has opened a newly upgraded fertilizer import and distribution facility at Portland in regional Victoria, following a $20 million investment in the site.

IPF said the upgrades will improve operational efficiency and storage capacity, with the site now capable of distributing 200,000 mt/y of fertilizer products to growers. The upgrades also enable the application of coatings to produce enhanced efficiency fertilizers such as Green Urea NV® and eNpower®, IPF said.

“The upgraded facility can now blend up to 300 tonnes of fertilizer per hour, increasing output and ensuring customers across Victoria and South Australia receive product promptly,” said IPF President Scott Bowman, who attended the facility opening along with growers, IPF customers, and industry stakeholders.

“It will not only enhance supply to the local and domestic market, but ensure customers have access to customized formulations that provide exact nutrients needed for maximum yield and more environmentally sustainable outcomes,” he added. “IPF’s investment in the Portland facility is part of our strategy to deliver productivity benefits for growers through innovation and provision of high-quality products. It also demonstrates IPF’s dedication to rural and regional Australia.”

The Portland site was first commissioned as a fertilizer manufacturing plant in November 1968 by Victoria-based Cresco Fertilisers, which sold the facility to IPF in 1972.

QatarEnergy Announces Urea Capacity Expansion

News, News Briefs, Qatar, Urea

QatarEnergy announced on Sept. 1 that it will build a new world-scale urea production complex, which is expected to double Qatar’s current urea production from 6 million mt/y to 12.4 million mt/y.

The project includes the construction of three ammonia production lines that will supply feedstock to four new urea production trains in Mesaieed Industrial City, about 40 km south of the capital Doha, according to the company. Production of the first new urea train is slated for 2030.

“We have been producing ammonia and urea in Qatar for over 50 years. Today, we are expanding our experience and further solidifying our position by this unprecedented mega project that will make the State of Qatar the world’s largest urea producer, playing a crucial role in ensuring food security for hundreds of millions of people around the globe, day after day,” said Saad Sherida Al-Kaabi, QatarEnergy President and CEO.

“Developing this project in Mesaieed Industrial City will ensure the optimum utilization of the excellent existing infrastructure for the petrochemical and fertilizer industries, including the city’s export port, which is one of the largest fertilizer and petrochemical export facilities in the MENA region,” Al-Kaabi added.

Strike Threatened at CF Fertilisers UK Site

England, News, News Briefs

Loading workers employed by Hargreaves Industrial Services at CF Fertilisers UK’s fertilizer facility in Billingham, UK, are preparing to strike over what the union is describing as a “derisory pay offer” from Hargreaves, FarmingUK reported on Sept. 4.

Strikes are tentatively scheduled for Sept. 12-20 and Sept. 28 to Oct. 6 and could disrupt the production and distribution of ammonium nitrate at the site to farmers across the country. Unite the Union, which announced the work stoppage, said the industrial action would escalate if the dispute is not resolved.

“Both Hargreaves and CF Fertiliser can fully afford to ensure these workers receive a fair pay offer,” said Unite General Secretary Sharon Graham. “Our members at Billingham will receive Unite’s total backing during these strikes.”