All posts by mickeybarb@charter.net

Perdaman Urea Project Secures Federal Loan; Environmental Opposition Continues

Australia, News, News Briefs, Urea

Perdaman Industries (Chemicals & Fertilisers) Pty. Ltd. has secured a A$220-million loan (approximately US$142.6 million at current exchange rates) from the Australian Government’s Northern Australia Infrastructure Facility (NAIF) to support the development of its urea project near Karratha on the Burrup Peninsula in Western Australia.

Perdaman anticipates getting financing done “in four to eight weeks” for the A$4.5 billion project, with project approval expected before the end of this year, and production starting four years later, according to Perdaman Chair Vikas Rambal as cited in a Sept. 30 report by Australia’s The Age.

Minister for Resources and Northern Australia Madeleine King MP said the project will be “transformational” for Western Australia, according to a Sept. 30 statement on her website announcing the loan.

“Australia currently imports around 2.4 million mt/y of urea for agricultural use, and the Perdaman project will have the capacity to reduce imported volumes…,” she said.

Perdaman expects to produce up to 2.3 million mt/y of granular urea at the Karratha plant. In May 2021, the company signed a 20-year offtake deal with Incitec Fertilizers Pty Ltd., a wholly-owned subsidiary of Incitec Pivot Ltd. (IPL), for up to 2.3 million mt/y of granular urea from the proposed plant (GM May 7, 2021). Perdaman already has secured gas supplies from Woodside Energy Group’s Scarborough field for the project (GM Nov. 21, 2018).

The Karratha plant is expected to provide an A$8.5 billion public benefit, supporting a peak of more than 2,500 construction and operations jobs over its 40-year life, according to the minister.

NAIF’s latest investment builds on two previous loans from the facility worth A$255 million towards key infrastructure servicing the project. Last year, it committed A$160 million to the Pilbara Ports Authority for a new multi-user wharf and facilities at the Port of Dampier and A$95 million to the Western Australia Water Corp. for the expansion of the Burrup seawater supply and brine disposal scheme (GM Feb. 11, p. 34).

But the latest NAIF loan will only be released when all regulatory approvals and financing conditions have been met, with the announcement coming only a short time after Federal Environment Minister Tanya Pilbersek last month appointed an independent reporter to conduct a full cultural heritage assessment of existing and proposed industry on the Burrup Peninsula.

The review was requested by Murujuga traditional custodians, representing the five traditional owners of the land in Western Australia, who are campaigning against the project because they fear it will damage sacred rock art.

The minister’s apparent U-turn came just three weeks after she backed the project after being told it had the support of the Murujuga Aboriginal Corp. (GM Aug. 26, p. 30).

Pilbersek will decide upon receiving the report whether to grant long-term protection of the area under federal heritage laws. She had earlier rejected a separate application for a 60-day halt on work at the project by a separate Aboriginal activist group (GM Aug. 26, p. 30; March 18, p. 30).

According to Perdaman, the project is being “thoroughly assessed” and will have “minimal impact” on the rock art.

According to The Age report, the Perdaman plant initially will emit 650,000 mt of greenhouse gases a year. The West Australia government has required a gradual reduction in emissions to zero by 2050.

Extra Maintenance Impacts AdvanSix Income; Company Reports Preliminary Adj. EBITDA

Earnings, News, Northeast

AdvanSix on Oct. 7 gave an update on its planned third-quarter turnaround and gave preliminary expected third-quarter 2022 financial results. The company expects third-quarter 2022 adjusted EBITDA to be in the range of $31-$34 million.

“During the planned multi-site plant turnaround in September, additional required maintenance at our Frankford phenol plant contributed to reduced production across our integrated value chain and a delayed ramp to full operating rates at our Hopewell and Chesterfield sites, resulting in an incremental approximately $15 million unfavorable impact to pre-tax income inclusive of fixed cost absorption, higher maintenance expense and lost sales,” said Erin Kane, AdvanSix President and CEO. “Despite the unfavorable impact of the extended turnaround, cash generation remained robust in the quarter, enabling a previously announced 16% increase in our dividend payout, opportunistic share repurchases of approximately $13 million in the quarter, and further debt paydown.”

“While quarterly operational performance overall did not meet our expectations, I’m encouraged that our planned plant turnaround activities are now behind us, supporting future performance, and expect our facilities to operate at our typical high utilization rates for the remainder of the year,” Kane added. “Consistent with others in the industry, we are seeing signs of slowing growth in consumer durables and building and construction end markets.

“We have a proven track record of navigating through challenging macro conditions and continue to believe we are well positioned going forward. Our outlook for the fourth quarter remains favorable, with expected performance rebounding towards results demonstrated in the first and second quarters of this year, supported by our diverse product portfolio, advantage of our business model, and strong underlying agriculture and fertilizer industry fundamentals,” concluded Kane.

The company will issue its third-quarter 2022 financial results before the opening of the New York Stock Exchange on Friday, Nov. 4.

Russia Dissatisfied with UN Efforts to Ensure Grain, Fertilizer Exports

News, News Briefs, Russia

Russia is reported to be dissatisfied with the results of the United Nations’ (UN) efforts to ensure grain and fertilizer exports, according to a Tass report, citing Russian Deputy Foreign Minister Sergey Vershinin speaking at a press conference on Oct. 5,

However, according to the minister, Moscow sees “progress.”

Vershinin pointed to the 300,000 mt of fertilizers Russia brought to European ports before the sanctions – which, he said, were now just sitting there – as an example of other issues that have not been resolved.

However, according to the Deputy Foreign Minister, Secretary-General of the UN Conference on Trade and Development (UNCTAD) Rebeca Grynspan may visit Moscow next week “to continue the consultations that were held in Geneva.”

A package of documents geared towards resolving the issue of food and fertilizer supplies on global markets was signed on July 22 in Istanbul (GM Sept. 16, p. 1).

Under the Russia-UN memorandum, the UN undertakes to work toward lifting anti-Russian restrictions hampering the export of agricultural products and fertilizers.

Another document envisages a mechanism for exporting grain from Ukraine-controlled Black Sea ports. An agreement between Russia, Turkey, Ukraine, and the UN provides for the establishment of a four-party coordination center to search ships carrying grain in order to prevent weapons smuggling and avoid any possible incidents.

OCP, Italy’s Bedeschi Partner Up for Storage Project

Europe, Morocco, News, News Briefs, Phosphate

OCP Group SA has partnered with Italian engineering firm Bedeschi SpA in a project to equip three of the Moroccan phosphate group’s automated storage facilities at the Atlantic port of Laâyoune, according to a Morocco World News report.

The port, in the disputed Western Sahara region, handles OCP’s Phosboucraâ subsidiary exports and imports.

Two of the facilities are for fertilizer and the other for sulfur, with combined capacity of around 300,000 mt.

The equipment will include material handling equipment for the storage of imported sulfur and the storage of fertilizer for export, as well as reclaimers, conveyor belts, and trippers.

UK’s Biggest Fertilizer Importer Renews Long-Term Deal with Associated British Ports

News, News Briefs, United Kingdom

The UK’s largest privately owned fertilizer importer, Thomas Bell & Sons Ltd., has signed a new long-term agreement with Associated British Ports (ABP), the Brigg, North Lincolnshire-based importer said Oct. 4.

The new deal with ABP is with Thomas Bell’s Immingham operation, and extends the current contract by another eight years.

Thomas Bell provided no details of the volumes or products handled under the long-term agreement, but Managing Director Andrew Major said the new contract will enable the company to increase its volumes while “keeping its level of service and safety at the higher levels.”

Thomas Bell operates fertilizer blending facilities at Immingham with capacity to run at 100 mt/h, according to the company’s website. It supplies the blends under its Diamond Fertilisers brand, as well as ammonium sulfate, granular urea, ammonium nitrate, and other products.

The company’s AN brands comprise the “Pulan” brand – 34.4% N AN imported from Poland’s Grupa Azoty – the “Zaksan” brand – 33.5% N AN, also supplied from Grupa Azoty – and “Lithan” – 34.4% N AN imported from Lithuania’s Achema.

Explosion and Fire at Uzbekistan Nitrogen Plant

Asia, News, News Briefs

A fire following an explosion occurred at 8:30 a.m. local time on Oct. 4 at an ammonia plant at Uzbekistan’s second-largest nitrogen fertilizer plant at Chirchiq in the country’s Tashkent region, according to local press reports.

Two workers were reported injured in the incident. The fire was reported to have been extinguished the same day. The extent of the damage to the plant, which produces urea, ammonium nitrate, ammonium sulfate, and NPKs, among other products, remained unclear at press time.

Incitec Pivot, Fortescue Progress Green Conversion of Gibson Island NH3 Plant

Ammonia, Australia, Green Ammonia, Green Hydrogen, News, News Briefs

Incitec Pivot Ltd. (IPL), Southbank, Victoria, and global green energy company Fortescue Future Industries (FFI) will progress planning for the conversion of IPL’s Gibson Island ammonia facility in Brisbane, Queensland, to run on green hydrogen to its final stages, IPL said on Oct. 7.

The two parties are electing to begin Front End Engineering Design (FEED), as well as executing a framework agreement to govern the project through to a Final Investment decision, currently targeted for calendar 2023.

The FEED phase is anticipated to cost around A$38 million (approximately US$24.6 million at current exchange rates), with the federal government, through the Australian Renewable Energy Agency, contributing A$13.7 million.

With studies having confirmed its feasibility, the proposed project could see the construction of a new ~500 MW hydrogen electrolysis facility at the site to produce green hydrogen, as well as the retrofitting of IPL’s existing ammonia manufacturing plant to run on the green hydrogen produced on site.

The retrofitted plant ultimately could produce up to 400,000 mt/y of green ammonia, which could be exported to international markets, as well as used to produce fertilizers, or potentially used as a low-carbon fuel source for ports, airports, and heavy transport, said IPL. The existing ammonia plant has nameplate capacity of 300,000 mt/y, according to the company’s website.

IPL announced last November that it would cease traditional fertilizer production at the Gibson Island site due to the company being unable to secure “an economically viable” long-term gas supply to the plant beyond its current supply contract (GM Nov. 12, 2021). According to IPL’s Oct. 7 statement, this is set for “early in the new year.” IPL previously indicated production would cease at the end of December 2022.

IPL and FFI announced in October 2021 that they were partnering on a feasibility study into industrial-scale production of green ammonia at the Gibson Island fertilizer manufacturing facility (GM Oct. 15, 2021).

Danakali to Sell Eritrean SOP Stake

Australia, China, News, News Briefs, Specialty, Sulfate of Potash

Junior sulfate of potash (SOP) developer Danakali Ltd., Subiaco, Western Australia, announced on Oct. 3 that it has executed a term sheet with China’s state-owned infrastructure construction firm Sichuan Road and Bridge Group Co. Ltd. (SRBG), Sichuan, China, for US$166 million in upfront cash and deferred payments.

Sichuan has agreed to purchase 100% of the shares held by Danakali’s wholly-owned subsidiary, STB Eritrea Pty Ltd (STB), in Colluli Mining Share Co. (CMSC), which is developing a SOP project in Eritrea. Danakali said that net of taxes it will receive $121 million. Danakali and the Eritrean government are 50-50 joint venture partners in CMSC.

The Danakali Board of Directors said the sale of STB’s shareholding in CMSC provides shareholders with an attractive post-tax value outcome in the absence of a full equity funded solution for the project. As the transaction constitutes the disposal of Danakali’s main undertaking, it is subject to Danakali obtaining shareholder approval. Subject to all conditions being satisfied or waived, it currently expects the transaction to be completed between March 31-May 31, 2023.

If the transaction proceeds to completion, Danakali intends to distribute 90% of the net proceeds to shareholders and continue as a listed company to identify new projects and growth opportunities.

SRBG is listed on the Shanghai Stock Exchange, and its parent company, Shudao Investment Group Co. Ltd. (SDIG), Chengdu, China, is a global company in transportation infrastructure design and construction. SDIG’s diversified business covers minerals and new materials investment, clean energy investment, transportation and logistics, and new urbanization construction. SDIG’s business covers more than 30 countries and regions.

Back in 2018 (GM June 15, 2018), CSMC executed a binding take-or-pay offtake agreement with EuroChem Group AG, Zug, Switzerland, for up to 100% of Module I Sulfate of Potash (SOP) production from the Colluli Potash Project. EuroChem was to take, pay, market, and distribute up to 100% (minimum 87%) of Colluli Module I SOP production.

At the time, EuroChem said the agreement envisaged total annual output of 472,000 mt. With EuroChem taking at least 87%, CMSC had the option to sell up to 13% through alternative sales channels.

Brazil Potash Reports Offtake, Marketing, Transportation Agreements

Brazil, Canada, News, News Briefs, Potash

Toronto-based potash junior Brazil Potash Corp., which is proposing to mine potash in Brazil’s northwestern Amazonas state (GM June 3, p. 31), announced on Oct. 3 that it has signed binding agreements with Amaggi Exportação e Importação Ltda. (Amaggi), one of the world’s largest privately held soybean producers.

The offtake would include take or pay for 500,000 mt/y, a marketing agreement to sell Brazil Potash’s remaining 1.9 million mt/y, and a barge transportation agreement to ship the initial planned 2.4 million mt of potash to inland ports close to major farming regions. Brazil Potash said its potash project is near construction ready.

In addition to being a soybean producer, Amaggi’s businesses include agricultural farming, commodities trading, logistics operations, and energy production, and its logistics subsidiary, Hermasa Navegação da Amazônia Ltda.

These contracts apply solely to Brazil Potash’s Phase One Autazes production of 2.4 million mt/y of potash for a 15-17 year term with a mutual option to extend. For the offtake and marketing agreement the potash sale price is based on the spot Brazil delivered price for granular potash (i.e., MOP CFR Brazil), plus inland freight savings minus a discount.

Once the project is operational, as part of the barge transportation agreement Hermasa will allocate the required assets and resources for the covered transportation of potash – primarily from Brazil Potash’s port near the village of Urucurituba on the Madeira River – to Hermasa’s port located at Porto Velho in the northwest state of Rondonia, or through the Amazonas and Tapajos’s rivers to other destinations.

“It’s game changing for Brazil Potash to sign binding contracts with Amaggi,” said Stan Bharti, Brazil Potash Chairman. “It is the ideal company for Brazil Potash to contract with as they consume a large amount of potash for application on their farmed land; they also have an extensive distribution and logistics network through their wholly owned subsidiary, Hermasa, which operates a barge-to-ocean vessel transshipment terminal only 40 miles upstream from our Autazes project. I have known Blairo Maggi for a number of years and am excited to be working with Amaggi and its talented team.”

“Brazil is a country rich in farming know-how with massive amounts of cultivated land, fresh water, and an ideal temperature to allow for year-round growing,” said Blairo Maggi, a shareholder in Amaggi. “However, despite being one of the world’s largest consumers of potash, globally, we are heavily exposed given that 98% of this essential plant nutrient is imported. Having a large-scale domestic source of conventional potash – as proposed by Brazil Potash – is important to help ensure both Brazil’s and global food security. I am therefore happy that Amaggi is able to be part of this important project.”

KBR Wins OCI Blue NH3 Contract

Blue Ammonia, News, News Briefs, Texas

KBR on Oct. 3 announced that it has been awarded a technology contract by Tecnimont S.p.A. for OCI NV’s low-carbon blue ammonia project in the United States. KBR will supply the technology license, basic engineering design, proprietary equipment, and catalyst for the 1.1 million mt/y blue ammonia plant in Beaumont, Texas (GM Sept. 9, p. 1).

Targeting completion by 2025, the project will be designed to transition from blue to green ammonia production as green hydrogen becomes available at larger scale in the future.