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House Bill Introduced to Add Potash, Phosphates to DOI Critical Minerals List

Featured, News, Phosphate, Potash, U.S.

A bill to include phosphate and potash on the Department of the Interior’s (DOI) final list of critical minerals for national security was introduced in the US House on June 13 by Reps. Kat Cammack (R-Fla.), Barry Moore (R-Ala.), Elissa Slotkin (D-Mich.), and Jimmy Panetta (D-Calif.). Sen. Thom Tillis (R-N.C.) is the lead sponsor of the legislation in the US Senate.

The sponsors said the bill seeks to spur domestic production of these minerals in an effort to reduce dependence on foreign sources, particularly as the ongoing war in Ukraine disrupts global supply chains and inflated fertilizer prices. Cammack, Moore, and Slotkin all serve on the House Agriculture Committee, while Panetta serves on the Ways and Means Subcommittee on Trade.

“A nation that cannot feed itself is not secure. Without the necessary inputs to feed, clothe, and fuel our nation, we’re leaving our food and national security up to our adversaries,” Cammack said. “Adding these vital resources to the Critical Minerals List will encourage increased domestic production and deliver much-needed relief to the Florida producers who rely on these inputs for their crops. We have the resources here at home; it’s time we tap into them.”

“America’s producers are the only customers who buy their inputs at retail cost and sell their outputs at wholesale price. Farmers, ranchers, and foresters in Alabama have been dealing with profit margins too thin to take care of their families,” said Moore. “Designating phosphate and potash as critical minerals is the first step in tapping our capacity for domestic production of our producers’ input costs, namely affordable fertilizer products.”

“Our food security is our national security, so when we’re dependent on Russian and Chinese minerals for the fertilizer that grows our crops, we are putting ourselves at risk,” said Slotkin.“Adding potash and phosphate to the Department of Interior’s Critical Minerals List will accurately reflect their strategic importance, encouraging increased domestic production, lowering fertilizer costs for our farmers, and keeping our food supply secure. And as one of the only states to hold its own supply of potash, Michigan is well-equipped to fuel a resurgence in production.”

The bill follows a DOI decision in 2021 to remove potash from the Critical Minerals List because its supply risk score fell just below the quantitative threshold (GM Nov. 24, 2021), even though potash had been added to the list in 2018 in response to Executive Order 13817, a federal strategy to ensure secure and reliable supplies of critical minerals.

A Federal Register notice on Nov. 9, 2021, said the production of potash – along with rhenium and strontium, two other minerals that did not make the list – was “either not highly concentrated or was concentrated in countries considered to be reliable trade partners,” despite acknowledging that the US was “highly net import reliant” for all three commodities. “Any changes in the supply chain dynamics of these commodities will be closely monitored, but none of the three is recommended for inclusion on the 2021 draft list of critical minerals,” the notice added.

Phosphates did not make it on the 2018 or 2021 lists. DOI said in 2021 that while it may be an essential mineral, the supply chain vulnerability for phosphates is mitigated by domestic production, lack of import dependence, and diverse, secure sources of supply.

“American producers are feeling the high prices for fertilizer due to the war in Ukraine and its disruption of the supply chains for needed minerals,” added Panetta. “We want to help our farmers with this bipartisan legislation that would allow the federal government to readily tap into our domestic potash and phosphate resources. Despite the devastation and destruction in Ukraine, we are acting in Congress to protect American agriculture and preserve global food security.”

Back in 2021, seven Republican Senators sent a letter to U.S. Geological Survey Acting Director Dave Applegate urging him not to remove potash from the Critical Minerals List and to add phosphates to the list, citing “a serious supply shortage” and a “doubling” of prices for both products (GM Dec. 17, 2021). Those senators included Roger Marshall (Kan.), John Boozman (Ark.), Chuck Grassley (Iowa), John Hoeven (N.D.), Mike Braun (Ind.), John Thune (S.D.), and Tommy Tuberville (Ala.).

At that time, phosphate, potash, and other fertilizer prices were rising rapidly amid supply chain disruptions, reaching a peak in spring 2022 following Russia’s invasion of Ukraine. Since then, however, fertilizer prices have been under steady pressure, with current NOLA DAP prices down nearly 43% and NOLA potash more than 48% below year-ago levels.

Yara, Cepsa Sign Green Ammonia/Hydrogen Deal

Featured, Green Ammonia, Green Hydrogen, Hydrogen, News, Norway, Spain

Yara Clean Ammonia (YCA) and Cepsa, a Madrid-based oil and gas company, have signed a deal to start a green hydrogen, ammonia corridor between the Spanish port of Algeciras and Rotterdam, the companies announced on June 14.

Under the agreement, YCA will supply Cepsa with green ammonia, which Cepsa will supply to its industrial and maritime customers in Rotterdam and central Europe using Yara’s supply network. The green ammonia will then be converted back into hydrogen for distribution at the Port of Rotterdam, where a terminal is being built to channel the clean hydrogen via pipelines to Germany, Belgium, Denmark, or the Netherlands.

“Yara Clean Ammonia and Cepsa have forged a pioneering partnership to establish a credible and robust supply chain for clean energy transformation in Europe,” said YCA President Magnus Krogh Ankarstrand. “This partnership will lay a solid foundation for industrial efforts to secure clean ammonia and hydrogen for several downstream applications in Europe while securing the clean transformation goals. We are delighted to be a part of this collaborative initiative.”

Cespa also signed a deal with Dutch gas network operator Gasunie to access its green hydrogen transport network in the country. In addition, Cepsa plans to invest $1 billion to build a 750,000 mt/y green ammonia plant at its energy park in San Rogue, Cadiz, near the port of Algeciras, with completion slated for 2027. Cespa is a partner in the Andalusian Green Hydrogen Valley, the largest green hydrogen project in Europe.

“Today’s agreements are a crucial step towards the long-term viability of the Andalusian Green Hydrogen Valley and the implementation of the first maritime corridor of sustainable fuels that will link the South with the North of Europe,” said Maarten Wetselaar, CEO of Cepsa. “Green hydrogen and its derivatives are the fastest, most viable, and competitive solution to accelerate the energy transition in heavy transport and ensure energy independence in Europe.”

The companies said their commitment to sustainable fuels is in line with the European Commission’s (EC) Fit for 55 Package, a legislative initiative to stimulate demand for alternative fuels in maritime transport to reduce greenhouse gas emissions by 2% in 2025, 6% in 2030, and 75% in 2050 compared to 2020 levels.

The development and use of sustainable fuels also contributes to several of the EC’s 2030 Agenda’s Sustainable Development Goals, the companies said, including SDG 7 (Affordable and clean energy), SDG 8 (Decent work and economic growth), SDG 12 (Responsible consumption and production), and SDG 13 (Climate action).

“The agreements announced today give our project crucial access to markets, customers, and distribution infrastructure, three key elements to unlock the potential of our Hydrogen valley,” Wetselaar added. “This is major news for the decarbonization of European shipping and industry and for the planet.”

Japanese Shipping Company Invests in Louisiana Blue Ammonia Project

Blue Ammonia, Featured, Japan, Louisiana, News, Texas

MOL Clean Energy US LLC (MCE), a subsidiary of Japanese shipping company Mitsui O.S.K. Lines Ltd. (MOL), has made a strategic investment in Ascension Clean Energy (ACE), a proposed global-scale clean hydrogen-ammonia production and export facility in Ascension Parish, Louisiana, according to a June 14 announcement.

As a result of the investment, MOL has become a joint venture shareholder in the project, along with project development startup Clean Hydrogen Works LLC (CHW), Grand Prairie, Texas; carbon solutions provider Denbury Carbon Solutions, a subsidiary of Denbury Inc., Plano, Texas, and the largest CO2 pipeline operator in the US; and Singapore-based Hafnia, a major oil product and chemical tanker company.

“Clean hydrogen-ammonia is critical to decarbonizing the global energy market,” said Tomoaki Ichida, CEO of MCE. “With this innovative project, MOL is investing not only for our future growth, but also helping promote the development and adoption of clean hydrogen-ammonia within our fleet and customer base.”

First announced by CHW in November last year (GM Nov. 4, 2022), the $7.5 billion ACE project plans to include two world-scale ammonia blocks with estimated ammonia production totaling 7.2 million mt/y. The two ammonia blocks are currently projected to start up in a staged approach, with Block 1 production anticipated to commence in 2027.

The facilities are to be constructed on a 1,700-acre RiverPlex MegaPark site on the West Bank of the Mississippi River in Donaldsonville, La., with ready access for exports. A final investment decision on the project is anticipated in 2024. Approximately 75% of the planned ammonia production volume is supported by letters of intent for offtake agreements with high-quality purchasers, the partners announced in November.

ACE is expected to generate approximately 1,500 construction jobs over five years, 350 permanent, full-time jobs once fully operational, and an additional 626 jobs in Ascension Parish, along with nearly $2.2 billion in new sales in firms across Louisiana, CHW said.

“With the rapidly evolving macro-environment, the world’s net zero goals must be increasingly coupled with affordability and security of energy supply,” said Mitch Silver, CHW Senior Vice President and Chief Operating Officer. “MOL’s practical yet visionary approach to decarbonization will add critical capabilities and insights to support ACE in delivering on its mission to provide customers with affordable and large-scale clean energy solutions.”

As reported last November, Denbury has a 12-year contract, with extension options, to transport and sequester CO2 captured from the project, which is anticipated to be built less than two miles from Denbury’s existing CO2 pipeline network. Captured CO2 volumes are estimated to be approximately 12 million mt/y. Hafnia plans to export the ammonia to emerging energy markets overseas.

As of last November, Denbury had invested $10 million into the ACE project through an investment in CHW and had committed to invest another $10 million when certain project milestones are achieved.

Incitec Pivot Ltd. – Management Brief

Australia, Management Briefs

Melbourne-based fertilizers and explosives company Incitec Pivot Ltd. (IPL) announced on June 13 that Christine Corbett has resigned from her role as Incitec Pivot Fertilisers (IPF) CEO designate. Corbett will leave the company at the end of June.

IPL said Corbett’s decision was due to the company’s deferral of the proposed demerger of its fertilizers and explosives business. This follows the IPL Board’s decision to sell the Waggaman, La., ammonia plant ahead of the proposed demerger. The company inked a definitive agreement with CF Industries Holdings Inc. on March 20 for the sale of the plant (GM March 24, p. 1).

Corbett was appointed as CEO designate of the proposed standalone IPF in October last year (GM Oct. 28, 2022) and took up the role on Jan. 9, 2023. Corbett’s resignation follows IPL Managing Director and CEO Jeanne Johns’decision to step down from the role, announced a week ago (GM June 9, p. 26). Mike Carroll continues as IPF Chairman designate, and IPF’s current CFO, Chris Opperman, will be appointed IPF Interim President, effective June 13.

Corbett’s departure could be another sign that IPL’s proposed split into separate fertilizer and explosives arms could be off. But in its statement on June 13, IPL said the proposed separation of the IPF business remains “a key strategic priority” even though it has been delayed.

K+S Cuts EBITDA Guidance on Lower Potash Prices

Earnings, Germany, News

K+S Group, Kassel, Germany, on June 14 cut its EBITDA guidance for full-year 2023 due to depressed potash prices, but noted that it expects prices to recover in the second half of the year.

K+S said the “decisive factor” for the K+S earnings situation is what price level subsequently emerges worldwide following the settlement of the new China potash supply contract price at $307/mt CFR, “how quickly a recovery from this price floor occurs,” and “what volumes are demanded at the respective prices.”

Canpotex on June 6 confirmed that it had reached a potash supply contract with Chinese buyers at $307/mt CFR for shipments through Dec. 31, 2023 (GM June 9, p. 15). The price marked a 48% decline from the $590/mt CFR agreement that Canpotex concluded last year with China, and is also well below the $422/mt CFR contract inked with India in April (GM April 7, p. 14).

“A greater clarity regarding the annual results EBITDA will only arise after the movement of significant volumes in the important overseas market of Brazil,” K+S said. “In case that the Chinese potassium chloride price radiates accordingly into other markets and there is no price recovery in these markets from the levels then reached until the end of 2023, this would result in total EBITDA of about €0.8 billion (approximately $0.87 billion at current exchange rates) for K+S in 2023.”

K+S cut its full-year EBITDA guidance in May after reporting first-quarter earnings of €1.15-€1.35 billion (GM May 12, p. 27), down from the previous €1.3-€1.5 billion guidance issued in March (GM March 17, p. 24). FY2022 EBITDA came in at €2.4 billion.

The company said in its June 14 disclosure that this would also have a negative impact on adjusted free cash flow, “but to a lesser extent than for EBITDA.” K+S expects prices to recover in the second half of the year, however, which it said should result in EBITDA exceeding €0.8 billion.

The company said in the second quarter that the conclusion of the China contract and lower prices in Brazil, as well as lower sales volumes due to a wait-and-see attitude from customers, would have a negative impact on EBITDA. It reported an EBITDA for the first quarter of €453.8 million, down 13% from the same prior-year quarter.

K+S shares fell as much as 9.7% immediately following the latest EBITDA guidance cut, their lowest since November 2021. However, shares were boosted as much as 2.5% in Frankfurt on June 15 after Scotiabank raised the producer to “sector perform” from “sector underperform,” saying that the potash market has bottomed and its outlook has improved, according to Bloomberg.

Togo Phos Rock Production, Sales Increase

Africa, Earnings, News, Phosphate Rock

Togo’s phosphate rock production increased by 6% in 2022, reaching 1.54 million mt, while sales rose by 14% to 1.58 million mt, up from 1.39 million mt, according to a report by Togo First, citing figures released by the Central Bank of West African States (BCEAO).

According to the report, the volume sold last year was the highest since 1999. The growth was spurred by several initiatives launched by Togo’s government to revive its phosphate mining industry, as well as increased global phosphate prices.

The government also wants to bolster the phosphate value chain by processing ores locally, an ambition launched in 2015. In line with this goal, the country’s Agriculture Ministry in late May signed a Memorandum of Understanding (MOU) with OCP Africa SA, a wholly-owned subsidiary of OCP Group SA, under which the Moroccan company will launch a feasibility study for developing a phosphate-based fertilizer plant in Togo (GM June 9, p. 28).

Initial plans by Lomé to establish a 1.3 million mt/y DAP/MAP/TSP plant in 2015 were never realized (GM Sept. 14, 2015). That project involved a privately-held holding company owned by Israeli businessman Jacob Engel, as well as China’s Wengfu as strategic partners.

Similarly, an agreement reached between Togo and Nigeria’s Dangote Industries in late 2019 also failed to progress. That plan called for Dangote to invest $2 billion in a project to mine an estimated 2 billion mt of phosphate rock for processing into as much as 1 million mt/y of fertilizer at a new complex in Lagos (GM Nov. 8, 2019).

However, an NPK fertilizer blending plant, Togo’s first such facility, is scheduled to start production soon. That plant, located in the Adétikopé Industrial Platform in the northern suburbs of the Togolese capital, belongs to Singapore-based manufacturer and farm inputs supplier Nutrisource Pte. Ltd. and is projected to reach a capacity of 200,000 mt/y (GM March 3, p. 28).

PADCOM Mine Commissioned in Manitoba

Canada, News, News Briefs, Potash

Potash and Agri Development Corporation of Manitoba (PADCOM) on June 9 officially commissioned the province’s first potash mine, located in the Hamlet of Harrowby, approximately 16 kilometers west of the Municipality of Russell-Binscarth, Man.

The mine will initially produce 50,000-100,000 mt/y using a selective solution mining process, which PADCOM expects will increase to up to 250,000 mt/y or more over an expected life of up to 100 years. Last summer, PADCOM said its plan was to sell the product to a single customer loaded on trucks (GM June 17, 2022) with the buyer responsible for logistics. No offtake deal has yet been announced.

Manitoba Premier Heather Stefanson and Economic Development and Investment and Trade Minister Jeff Wharton were on hand for the commissioning event. Stefanson said the project is part of the government’s commitment to position Manitoba as a global leader in sustainable mineral development.

“PADCOM has been persistent in their efforts to develop this resource for the benefit of the region and the province, and it is wonderful to see all of that hard work finally pay off,” she said. “In addition to the economic and social benefits, it is important to note that the selective solution mining technique that this mine will utilize is environmentally friendly technology.”

In March, PADCOM received final approval to commence commercial production from the Director of the Mining, Oil, and Gas Branch of the Manitoba Department of Economic Development, Investment, and Trade (GM March 17, p. 1). At that time, construction of the project was estimated at 99% complete.

PADCOM invested more than $12 million in the project, with Gambler First Nation as a 20% equity partner. Stefanson said the mine will be a carbon-neutral facility, and its use of green Manitoba Hydro energy will make it “the lowest carbon-emitting potash mine in the world.”

Among the projects still to complete, according to PADCOM President Daymon Guillas, are building a rail spur to start shipping tons to Canada and the US; boiler and dry centrifuge infrastructure; and building vessel loading facilities at the Port of Churchill in Manitoba to start shipping tons to Europe and Brazil.

Andersons Buys ACJ Pet Food Business

Eastern Cornbelt, News, News Briefs

The Andersons Inc., Maumee, Ohio, announced on June 13 that it has signed an agreement to purchase the assets of ACJ International LLC and its subsidiaries, an ingredient, logistics, and supply chain management company in the pet food ingredient industry. The purchase is expected to close in July 2023. Terms were not disclosed.

The purchase includes ACJ’s headquarters in Lake St. Louis, Mo., and its production and warehouse facilities in Joplin, Mo., Webb City, Mo., and Monroe, Wisc.

“We are excited to once again expand our pet food ingredient portfolio and our physical presence in the central region of the US,” said Bill Krueger, The Andersons Chief Operating Officer and President Trade and Processing. “We are looking forward to this opportunity to provide value-add ingredients and processing as well as enhanced supply chain services for the pet food industry.”

According to its website, The Andersons’ Pet Products business specializes in cat litters, animal bedding, and environmental enrichment for birds, mice, reptiles, guinea pigs, chickens, and horses.

USDA to Invest $320 Million in 19 States

News, News Briefs, U.S.

The US Department of Agriculture (USDA) on June 15 announced that it is making $320 million in new investments to create better markets for agricultural producers and food businesses in 19 states across rural America.

The projects are being funded through the Food Supply Chain Guaranteed Loan Program, Meat and Poultry Intermediary Lending Program, Business and Industry Loan Guarantee Program, and the Rural and Economic Development Loan and Grant Program. The states include Alabama, California, Connecticut, Iowa, Idaho, Kentucky, Massachusetts, Michigan, Minnesota, Montana, North Carolina, North Dakota, New Hampshire, New York, Ohio, Oklahoma, Pennsylvania, Texas, and Virginia.

“The Biden-Harris Administration and USDA are standing up for America’s farmers and ranchers by expanding processing capacity, creating fairer markets, more revenue streams, and market opportunities which help bring down food costs for families at the grocery store,” said USDA Secretary Tom Vilsack.

The types of projects slated for the funding, according to USDA, include a family-owned meat market and bison processing facility in the Midwest; a greenhouse facility in the Northeast that will be growing salad greens year-round in a hydroponic environment; food supply chain businesses in the South, including a berry processor that is purchasing equipment to expand production capacity; and a plant-based yogurt manufacturer and a cold storage facility in the West.

“We are partnering with entrepreneurs in rural areas to build brighter futures, connect business owners to new markets, and create good jobs for generations to come,” Vilsack said. “These investments reflect the goals of President Biden’s Investing in America agenda to rebuild our economy from the bottom up and middle out and make our communities more resilient.”