All posts by mickeybarb@charter.net

Major Florida Phosphate Facilities Evade Direct Hit from Hurricane Ian

Featured, Florida, News, Phosphate

Major Florida phosphate facilities were spared a direct hit from Hurricane Ian, which plowed into the state further south than initially expected, devastating the Fort Myers area and moving through major orange groves as it made its way across the state. President Joe Biden said early indications suggest that there could be a significant death toll. “We’re hearing early reports of what may be substantial loss of life,” Biden said on Thursday.

Some 2.6 million homes and businesses were left without power while rivers overflowed and two bridges collapsed, according to Bloomberg. About 11% of the state’s cell phone networks were out of service.

Rivers across central Florida set flooding records, according to the National Weather Service. Throughout the US Southeast, at least 31 river and tide gauges were recording flooding.

Governor Ron DeSantis said years of rebuilding were ahead from a storm that changed the very character of the state.

Ian came ashore Wednesday afternoon with winds of 150 miles (249 kilometers) per hour, tied for the fifth strongest hurricane to hit the mainland US, Jeff Masters and Bob Henson, meteorologists at Yale Climate Connections said. It pushed a 12-foot wall of water into Naples, Fort Myers, and other cities, swamping cars, toppling buildings, and knocking out power.

Ian weakened as it crossed the state, but was a hurricane again as of Friday morning, threatening to carve a new path of destruction through South Carolina when it roars ashore north of Charleston later in the day.

While little change in strength is expected before it reaches the coast, Ian should see a “rapid” weakening after landfall, according to the National Hurricane Center. Power outages are expected to reach far inland as Ian’s winds shake trees and power lines throughout the region.

The expected damage in South Carolina, and the flooding rains inland, will be severe but won’t rival the devastation across Florida, where it may take weeks or months to assess the true cost. “This is going to be among the most devastating hurricanes we have seen in the US,” said Mike Doll, meteorologist with AccuWeather Inc. “Is it as bad as Katrina? Probably not, but the coastline in southwest Florida is going to be forever altered from this.”

Prior to Ian hitting land, The Mosaic Co. had readied its phosphate facilities for the storm, saying all of its Florida locations were secured with some fully evacuated while minimal staff remained at other sites.

“As we move into recovery mode from Hurricane Ian, our early assessments indicate that there were no environmental releases at our operations,” said a Mosaic spokesman late day Thursday. “We will continue inspections over the coming days to confirm our initial understanding. Our top priority remains the safety of our employees and communities.”

“Our White Springs, Fla. facility was not damaged in the hurricane and remains operational,” said a Nutrien Ltd. spokesperson late Thursday. “Our Aurora, N.C., and Augusta, Ga., facilities continue to operate at this time. We have storm preparedness plans in place and we will continue to monitor conditions while taking all actions necessary to maintain the safety of our people and integrity of operations.”

There was fear that the storm would cause phosphogypsum stacks to leak. As noted above, Mosaic saw no environmental releases, and said before the storm hit that it had made many improvements throughout years of Florida storms to help prevent any potential problems.

While Ian produced over 6 inches of rain and strong winds at the leak-prone Piney Point phosphogypsum site in Tampa, the Florida Department of Environmental Protection said there was no identified damage to the compartment systems or any other water management concerns.

Industry players were closely watching Ian for any impact on the phosphate market. If the Mosaic facilities are offline for 1-2 weeks, that could mean a loss of 250,000-350,000 mt of finished phosphates, or a $240-$330 million drop in revenue, according to Green Markets Director of Research Alexis Maxwell.

Ammonia cargoes for Mosaic from Yara International ASA and CF Industries Holding Inc., as well as from Mosaic’s own production in Louisiana, may also slow. In 2017, Mosaic lost up to 400,000 mt of finished phosphate products following Hurricane Irma.

Other fertilizer companies were also reported to have taken precautions. Sylvite Florida shut down two warehouse locations in Lakeland and Bartow, Fla., at noon on Sept. 27 in preparation for Ian, a company source told Green Markets. Both were slated to reopen again on Friday, Sept. 30, provided power was available. “I imagine every fertilizer blender in Florida is doing the same,” the source said.

Sylvite’s Lakeland facility has 4,000 tons of dry bulk storage and 1,000 tons of finished goods storage, while the Bartow facility has more than 60,000 tons of dry bulk storage.

Griffin Fertilizer Co., a full-service customer blender of dry and liquid fertilizers, closed its office and facility in Frostproof, in southern Polk County, on Sept. 28-29 in advance of Ian’s landfall.

Efforts to reach Diamond R Fertilizer, which operates seven full-service warehouse facilities and two fertilizer blending locations in Florida, were unsuccessful at midweek.

There was also no confirmation on the status of operations at Florikan, a controlled release fertilizer producer based in Sarasota. Efforts to reach Florikan and its parent company, Profile Products in Buffalo Grove, Ill., were unsuccessful at midweek.

CSX reported on Sept. 27 that it was implementing emergency preparations as Ian approached and taking precautions to “ensure employee safety and protect rail assets in advance of the storm.” CSX said no rail terminals had been closed, but customer shipments were likely to be delayed as the storm passed.

CSX also confirmed that operations had been suspended at several intermodal, TDSI auto handling terminals, and TRANSFLO transloading terminals, including Central Florida ILC, Tampa, Palm Center, Sanford (Orlando), and Jacksonville. The company said additional terminal closures could be necessary as the stormed tracked northeast across Florida.

Port Tampa Bay reported on Sept. 28 that it had initiated its Comprehensive Emergency Management Plan after the US Coast Guard placed the port under Hurricane Condition Zulu, indicating gale force winds. As a result, the port’s waterways were closed and all waterfront facilities and dock areas secured to remove debris and hazardous materials.

Ports in Florida that were still shut were expected to reopen on Saturday, according to DeSantis in a Thursday evening press conference.

Ian is expected to be a massive blow to the citrus industry of Florida, which supplies nearly all of the orange juice to the country. Orange juice surged to the highest since 2017 as Florida starts to assess citrus crop damage.

“It will take another day or two to fully understand the damage the storm caused, but damage is expected to be very big,” Jack Scoville, Vice President of Chicago brokerage Price Futures Group, said in a note. Orange juice inventories in Florida are 41% below year-earlier levels, he said.

Upwards of 90% of Florida’s groves, heavy with ripe fruit, were in Ian’s path. Florida, the US’s largest producer of orange juice, had been grappling with citrus greening that damages fruit and eventually kills trees. Futures prices were soaring before Ian.

After the then-record 2005 hurricane season, many citrus producers in Florida could not fully restore operations, Rabobank analyst Andres Padilla said. “Intense damage to the crops could permanently remove some of the producers from the market,” he added.

European Gas Prices Jump after Suspected Pipeline Sabotage, Ukraine Transit Concerns

Europe, Featured, Natural Gas, News, Russia, Ukraine

Russia’s energy conflict with Europe escalated dramatically this week following the detection of four leaks on the Nord Stream 1 and 2 natural gas pipelines, which run parallel to each other under the Baltic Sea from Russia to Europe via Germany. Fears that Russia could halt gas supplies to the continent through Ukraine added to the turmoil.

European gas prices jumped on reports that the pipeline damage was suspected sabotage and rose further as Russia’s state-controlled gas major Gazprom PJSC warned there is a risk Moscow could impose sanctions on Ukraine’s energy company Naftogaz due to ongoing arbitration, which would prohibit Gazprom from paying Kyiv the transit fees, and consequently put at risk gas flows to Europe via Ukraine.

Russian gas flows through Ukraine have been steady at about 42 million cubic meters a day in recent weeks.

If gas supplies through Ukraine are halted, Western Europe would be cut off, leaving just the TurkStream pipeline sending Russian gas to Turkey and to a handful of smaller European countries still deemed friendly with Russia. Underlining just how fragile supplies are, there were reports by Russia’s security service last week that they had thwarted a planned attack by Ukraine on TurkStream – a claim that Kyiv has denied (GM Sept. 23, p. 1).

On Sept. 26, pressure drops and leaks were detected in the Nord Stream 2 and Nord Stream 1 pipelines in Danish and Swedish waters north of the Danish island of Bornholm after explosions were reported in the area. On Sept. 27, Sweden’s coast guard discovered a fourth leak in the Nord Stream system. Two of the leaks are in Danish waters and two in Swedish waters.

While neither the Nord Stream 1 or 2 pipelines currently are transporting gas, both contain gas. Flows from Russia through Nord Stream 1 have been halted since Aug. 31 (GM Sept. 2, p. 35). Nord Stream 1 previously provided around 25% of the European Union’s (EU) annual Russian gas imports. It was reduced to 20% of capacity in July.

The Nord Stream 2 pipeline has never started up commercial operation. Construction was completed in December 2021, but Germany suspended certification of the pipeline in February following Russia’s invasion of Ukraine (GM Feb. 25, p. 1).

Sources close to the matter said the absence of active gas flows through the two pipelines has limited the immediate impact of this week’s damage.

But gas continues to bubble up from the pipelines, with Denmark estimating both links would be empty by Oct. 2. Environmental activist organization Greenpeace has warned of the potential environmental fallout from the leaking gas.

Several governments believe the damage to the Nord Stream pipelines – which coincided with the official launch on Sept. 27 of a new gas pipeline (The Baltic Pipe) taking Norwegian gas to Poland and lying in close proximity to the Nord Stream structures – was “deliberate” and “an act of sabotage.”

A British defense source told the UK’s Sky News they were likely premeditated attacks using underwater explosives.

The incidents have prompted increased security on energy infrastructure across Europe, with some pointing the finger at Russia.

Only a state actor could have carried out attacks on the Nord Stream pipelines, and “the most likely culprit is Russia,” the former head of Germany’s federal intelligence agency, Gerhard Schindler, told German newspaper WELT on Sept. 29.

He said Russia stands to gain the most from this act of sabotage, with Moscow now being able to justify the halt in gas supplies by pointing to the defective pipelines without having to advance alleged turbine problems or other arguments for breaking supply contracts, WELT reported.

The Kremlin said claims that Russia was behind a possible attack on the Nord Stream gas pipelines were “predictably stupid.”

It said a foreign state was likely responsible for an incident that resulted in the leaks at the Nord Stream 1 and 2 gas pipelines, according to a Moscow Times report the same day. According to the newspaper, Russia launched an “international terrorism” probe on May 28, and according to a Prime News report, Moscow “is ready to investigate the Nord Stream incident jointly with EU.”

Russia has been squeezing gas supplies to Western Europe since its invasion of Ukraine, as part of a cat-and-mouse game to exert maximum leverage on Ukraine’s Western allies.

Europe has responded by filling up its gas storage facilities and is working to secure alternate sources of gas, which has been coupled with intervention by European governments (GM Sept. 16, p. 29; July 29, p. 1).

Certainly, the EU has gone some way to wean itself off Russian gas. Before the invasion of Ukraine, the bloc got around 40% of its natural gas from Russia; today, that now stands at about 9% of the total.

This week’s surge in Europe’s natural gas prices came after weeks of declines in its price, buoyed by an improving picture for European supplies this winter. The Dutch TTF front-month gas (currently October), the European benchmark, closed at €185.19 a megawatt-hour (MWh) on Sept. 29, having surged 11% the previous day to close at €207.187 per MWh.

However, industry watchers are concerned that by next spring, European gas facilities could be nearly empty, without any Russian gas to refill them.

Michigan Advances $255 M Bond for Potash/Salt Project

Featured, Great Lakes, News, Potash

The Michigan Strategic Fund has begun the process for the approval of a $225 million bond for Michigan Potash and Salt Co. LLC (MPSC) to build a large-scale potash and salt mining operation in Evart Township in Osceola County, Mich.

The bond would cover sewer and wastewater disposal. Final approval could come by the end of the year, according to Chris Cook, Director, Capital Access, with the Michigan Economic Development Corp., as cited by WKAR Media.

“American farmers remain beholden to foreign imports for essentially all of their potassium fertilizer required to grow healthy crops,” said MPSC Chief Development Officer Cory Christofferson, after the Sept. 27 decision. “We will address this problem by producing high-grade white potash within the Midwest demand center.”

Still more funding may be just around the corner for MPSC, as it could apply for up to $100 million from USDA’s $500 million fertilizer production grant program (see related story). Speaking about the grant program on Sept. 27, USDA Secretary Tom Vilsack mentioned an unspecified Michigan facility that might be a candidate for funding, according to a report in the Iowa Capital Dispatch.

MPSC praised the USDA grant program soon after it was announced in March. “In the face of a global food and fertilizer crisis, I applaud the USDA and Secretary of Agriculture Vilsack’s leadership in confronting our nation’s dependency on foreign fertilizer imports,” said MPSC Founder and CEO Ted Pagano.

“Our farmers feed the world, yet they are wholly dependent on foreign sources of critical potash nutrients while domestic supplies are available right here at home. Michigan Potash stands ready to support American farmers by replacing one-to-one all the potash imported from Russia with domestic production from Michigan,” he added.

MPSC plans to use solution mining to initially produce 650,000 mt/y of potash and 780,000 mt/y of salt, eventually ramping up to 1 million mt/y and 1.2 million mt/y, respectively. MPSC reported earlier that full production of domestic potash from the facility is expected for 2025 (GM March 11, p. 29).

MPSC announced in April that it had executed an offtake agreement with a major US-based agricultural company to distribute 100% of the first phase of its potash production – 650,000 mt/y (GM April 8, p. 28). The offtake company was not identified by name, however, MPSC described it as a “supply chain leader in the production, processing, and global movement of the world’s food.”

MPSC said $1 billion capital investment would create more than 300 union construction jobs over a three-year period and more than 180 full-time operations positions. MPSC has been developing the project for more than a decade near the site of The Mosaic Co.’s small Hersey mine, which Mosaic closed in favor of its much larger Saskatchewan production (GM Nov. 18, 2013).

Higher Prices Boost OCP 1H, Offset Lower Export Volumes

Earnings, Morocco, News, Phosphate Rock, Phosphoric Acid

OCP Group SA, Casablanca, reported a net income attributable to shareholders of the company of MAD16.85 billion (approximately $1.5 billion at current exchange rates) for the six months to June 30, 2022, up from the year-ago MAD4.63 billion.

Revenue in US dollars increased by 58% to $5.76 billion, up from $3.65 billion the previous year. Six-month EBITDA more than doubled to $2.89 billion from the prior-year $1.41 billion.

OCP attributed its “exceptional financial performance” in the first half of 2022 to higher selling prices across all its product categories, together with continued production and operating efficiencies.

“Substantial double-digit revenue growth was achieved in each of our three product categories, as higher prices more than offset lower volumes, “said OCP in its results statement.

The producer highlighted the sharpest revenue increase was seen in fertilizers, where revenue increased 69% year-over-year to represent “a record” 63% of the group’s total first-half revenue, up from 60% in the same prior-year period. It said high-demand markets such as South America and Africa accounted for 56% of total six-month revenues, and mitigated the impact of lower export volumes.

First-half phosphate rock revenues were up 63%, with OCP citing improved rock prices year-over-year which again offset lower export volumes to most key importing regions.

Higher selling prices also boosted phosphoric acid revenues, which increased 24% from a year-ago. The company noted the price increase was partially offset by lower acid export volumes to Asia, as a result of delayed second-quarter phosphoric acid imports.

Revenue breakdown by product

$ million 1H-2022 1H-2021 % change
Phosphate rock 897 551 +63
Phosphoric acid 692 559 +24
Fertilizers 3,659 2,165 +69

Second-quarter revenues increased by 51% to $3.09 billion, up from the year-ago $2.05 billion, while EBITDA for the quarter doubled to $1.67 billion from $809 million.

Looking ahead, OCP said the record first-half results “have set the stage” for 2022 to be another year of strong operating and financial performance for the group.

The producer noted that prices have eased “substantially” in line with lower input costs, and expects them to remain stable throughout the second-half of 2022. At current prices, demand should increase from first-half levels, reflecting more favorable farm economics and low inventories in several regions, together with limited global supply, it said.

Regionally, OCP expects high Indian phosphates imports to continue in 2022/2023, given the good monsoon and low stocks compared with historical levels. It also believes US and European demand should pick-up after two consecutive bad seasons.

On the supply side, OCP sees China export restrictions continuing to at least the first quarter of 2023, and adding more tightness to the market.

The producer reported its ongoing capacity expansion program, which it noted is modular in design, should yield additional customized product capacity beginning in fourth-quarter 2022. It reported it would have “additional” TSP capacity available in the fourth-quarter of 2022, but did not provide any numbers.

OCP further said it has “major production ramp-ups” scheduled for 2023 and 2024, but these would be “calibrated” to market conditions.

The group sees limited new supply capacities elsewhere.

Mitsubishi Eyes Green NH3 Project in Texas

Green Ammonia, Japan, News, News Briefs

Mitsubishi Corp., Tokyo, is considering setting up one of the world’s largest ammonia production plants, according to Bloomberg, citing Nikkei report, which said the company planned to sign a Memorandum of Understanding on Sept. 28 with the Port Authority of Corpus Christi.

Mitsubishi would work on a feasibility study in the next few years before deciding on the size of the investment. It envisions starting production in the early 2030s and gradually increasing output to as much as 10 million mt/y.

Borealis to Sell Entire Stake in Belgium’s Rosier to Turkey’s Yildirim

Austria, News, News Briefs, NPK, Turkey

Vienna-based fertilizers and polyolefins major Borealis AG and Turkey’s Yildirim Holding AŞ, a subsidiary of Yildirim Group, have signed a binding agreement for Yildirim to acquire Borealis’ shareholding in Belgian fertilizer producer Rosier SA.

Borealis currently holds 98.09% of Rosier’s shares and the offer values the business (enterprise value) at €35 million (approximately $33.7 million at current exchange rates), resulting in a valuation of roughly €11.65 per share, Borealis said in a Sept. 26 statement announcing the deal.

The closing of the transaction is subject to certain regulatory approvals and Borealis concluding a previously announced squeeze-out for the remaining Rosier shares it does not already own.

Borealis in June announced its intention to launch a squeeze-out for Rosier’s remaining shares at a price of €20 per share (GM June 10, p. 26).

Moustier-headquartered Rosier produces and distributes a range of granulated fertilizers, liquid fertilizers, NPKs, and hydrosoluble fertilizers. The company has two production sites: at Moustier, Belgium, and Sas van Gent in the Netherlands. In FY2021, Rosier reported an unaudited net loss of -€36.9 million on sales of €233.8 million (GM Feb. 11. p. 33).

The proposed divestment of its stake in Rosier is part of Borealis’ strategy to focus on its polyolefins and base chemicals business, as well as on the transformation towards a circular economy.

Borealis acquired an initial 56.86% stake in Rosier from France’s Total SA in 2013, as part of its then strategy to expand its fertilizer business (GM July 8, 2013). Under a 2015 agreement with Rosier, Borealis became the exclusive distributor of Rosier products in all European markets, including Belgium, the Netherlands, Poland, and the “Northern European” countries (GM Aug. 4, 2017).

The Austrian fertilizers and polyolefins company, which is a 75% owned subsidiary of Austrian oil and gas group OMV AG, currently is in exclusive negotiations with the Czech Republic’s chemicals and fertilizers company Agrofert for the sale of its Nitrogen division, after receiving a binding offer for the business from the Czech company in June (GM June 3, p. 1). The transaction also remains subject to certain closing conditions and regulatory approvals.

A spokesperson for Borealis confirmed to Green Markets this week that the transaction remains on track for closing before the end of this year.

Borealis’ Nitrogen business includes fertilizers, melamine, and technical nitrogen products. The offer valued the business on an enterprise value basis at €810 million.

The Austrian company pulled the plug on a binding offer it had received in early February from Zug, Switzerland-based EuroChem Group AG for the acquisition of the nitrogen business (GM March 11, p. 30; Feb. 4, p. 1). The two had been in exclusive negotiations.

Borealis CEO Thomas Gangl at the time cited the developments around the war in the Ukraine and sanctions that had been put in place as behind the company’s decision to decline EuroChem’s offer.

Borealis’ stake in Rosier had not been part of the deal.

The Istanbul-based privately-owned Yildirim Group is a Turkish industrial conglomerate active in nine industrial sectors, including fertilizers and chemicals. It owns Turkish fertilizer producer Gemlik Gübre AŞ and is Turkey’s largest producer and exporter of CAN. It is also an ammonia producer, and is Turkey’s third largest trader of fertilizers (CAN, AN, DAP, AS, NPK, and urea).

Early this year, Yildirim Holding submitted a binding bid to acquire Croatia’s biggest fertilizer producer, Petrokemija d.d. (GM Jan. 14, p. 30). The offer was reported to be valid until Jan. 31, 2022. It is unclear if talks have continued.

The Turkish conglomerate also operates in the metals and mining, shipping and logistics, port management, energy and power, and energy commodities sectors, and has a presence in 54 countries. The group has an asset management company in The Netherlands that serves as an investment arm for the group.

Yildirim also owns a 24% stake in CMA CGM Group, the world’s third largest shipping and logistics company.

MacroSource, Novaphos Ink Offtake Deal; USDA Grant Eyed for Technology Deployment

Florida, News, News Briefs, Southeast, SPA

MacroSource LLC (formerly Gavilon Fertilizer), Savannah, announced on Sept. 27 that it has executed a ten-year offtake agreement to purchase superphosphoric acid (SPA) from Novaphos (formerly JDCPhosphate Inc.), Fort Meade, Fla., a technology provider to the phosphate industry. 

Novaphos, which has a demonstration plant at Fort Meade, said its technology produces high-quality phosphoric acid from low-quality phosphate rock without large-volume wastes such as phosphogypsum or the need for inputs such as ammonia and sulfur. The technology has the added benefit of producing a calcium silicate coproduct – J-Rox™, which can be used in construction as well as a silicon fertilizer, with a net negative GHG footprint.

“MacroSource is excited to partner with Novaphos to bring more sustainable supplies of superphosphoric acid to market,” said Brent Harlander, MacroSource President. “Liquid fertilizers are essential to maintain farm productivity and efficiency. The Novaphos technology is a move towards a more environmentally sustainable process, which is important to MacroSource.”

“Novaphos is very pleased to have established this long-term relationship with MacroSource, which has unparalleled distribution and upgrading capabilities for superphosphoric acid,” said Timothy Cotton, Novaphos CEO. “Our focus remains adding production capacity using Novaphos technology in North America and elsewhere in the world to help move the phosphate industry to a more sustainable future. Going forward, our plan is to build out our commercial capability to further serve these industry needs.”

Novaphos intends to seek a grant of up to $5 million from the new $500 million USDA grant program (see related story) and combine those funds with investments from private sector partners to enable the deployment of Novaphos technology.

The company plans to use the funding to accelerate construction of commercial-scale Novaphos production facilities in the US, adding up to 20% to the US supply of liquid phosphate fertilizer over the coming 3-5 years, with additional plants to be constructed thereafter. It said these plants can be closer to US consumers, reducing logistics costs and environmental impacts.

Novaphos said its process is much simpler and less capital intensive than the traditional wet-acid process, making small plants economical. It said they can exploit small deposits of lower quality phosphate ore, which is more prevalent than large, high-quality deposits required by the wet-acid process. The company said that due to poor economics, phosphate rock resource limitations, and permitting challenges, no new wet-acid plants are likely to be built again in the US.

In a May letter to the USDA, Novaphos noted significant consolidation in the phosphate industry, saying in 2000 there were 11 phos acid producers with 12 million mt/y of capacity, all using the wet-acid process, whereas by 2021, there remained only four US producers with 7.5 million mt/y capacity. It noted that one producer, The Mosaic Co., controls 60% of capacity. The company said the US has moved from being a net exporter of phosphate fertilizers of about 5 million in 2000, to being a net importer in 2021.

Novaphos said consolidation has been even more pronounced in the liquid fertilizer market, which depends on higher cost SPA, with the number of producers dropping from five to three. It said while imports have helped address US solid phosphate fertilizer supply needs, they have had almost no impact on the SPA market.

Nouryon Acquires ADOB Fertilizers

News, News Briefs, Northwestern Europe, Poland, Specialty

Nouryon, Amsterdam, announced on Sept. 29 that it has entered into a definitive agreement to acquire ADOB Fertilizers, Poznań, Poland, a supplier of chelated micronutrients, foliars, and other specialty fertilizers. Nouryon said the acquisition will enable it to expand its product portfolio and broaden its offerings for customers in the crop nutrition market.

“The addition of the ADOB business to Nouryon’s portfolio is an excellent strategic opportunity for our company,” said Charlie Shaver, Chairman and CEO of Nouryon. “This transaction confirms our commitment to our customers in the Agriculture and Food industry. We look forward to welcoming the employees and customers of ADOB to the Nouryon family.”

ADOB provides water-soluble fertilizers and micronutrients and has been producing specialty solutions for agricultural and horticultural crops for more than 30 years.

“With its strong focus on technology and innovation including biodegradable micronutrients, high-solubility specialty fertilizers and custom formulations, ADOB’s capabilities are an excellent complement to Nouryon’s existing capabilities in crop nutrition,” said Larry Ryan, Executive Vice President and President of Performance Formulations and the Americas at Nouryon.

“This combination is a great opportunity for ADOB to leverage a large global organization to advance to the next stage of global growth,” said Adam Nawrocki, owner and CEO of ADOB. “I look forward to supporting the combined company on this journey in the coming months.”

The transaction is expected to close by year-end 2022, subject to required approvals and customary closing conditions. Additional terms of the agreement were not disclosed.

EU Clarifies on Russian Sanctions

Europe, News, News Briefs, Russia

The European Commission Council has clarified that contrary to earlier reports European Union (EU) sanctions against Russia do not block the export of, and transactions related to, food and agricultural products originating in Russia.

According to a statement on its website, “EU sanctions cover only bilateral trade between the EU and Russia – not international trade …. Anyone can operate, buy, transport, ensure food, and fertilizers coming out of Russia.”

Earlier reports implied EU sanctions against Russia had been extended to include a ban on the provision of transport, transshipment, and trading services by European companies, as well as related services, such as insurance, financial, and brokerage services, related to the transit of sanctions Russian fertilizers – potash and compound fertilizers – as well as coal, that were heading for third countries (GM Sept. 23, p. 1).

The ban applied to these Russian origin products heading for third countries through EU Member States and even without the use of the EU’s territory and infrastructure.

But according to the EC Council clarification statement, “The restrictions on the import of certain potash fertilizers under the EU sanctions only apply to products imported to the EU and do not concern exports of these products to Ukraine from the EU or from Russia,” the statement read.

The EC Council added the EU has also made exceptions within its sanctions, including that “EU Member States are also authorized to grant Russian-flagged vessels access to EU ports, as well as to grant Russian road carriers entry to the EU, for the purposes of importing or transporting agricultural products, including fertilizers and wheat, that are not subject to sanctions.”

EuroChem Pursues Lawsuit against Maire Tecnimont, Lenders Over Stalled N Project

Europe, News, News Briefs, Russia

EuroChem Group AG is pushing for compensation from Italian engineering group Maire Tecnimont SpA and two of its lenders over the halted construction of EuroChem’s Nordwest 2 ammonia and urea project in Kingisepp, northwest Russia.

Maire Tecnimont and the two banks could be looking at paying out €212 million (approximately $204 million at current exchange rates), according to a Bloomberg report.

Construction work on the project, which on completion would see the addition of some 1 million mt/y of ammonia production capacity and 1.4 million mt/y for urea, has been halted since Russia’s invasion of Ukraine on Feb. 24.

EuroChem had been targeting for the complex to come on stream in 2023, and this past February reported that start-up target remained on track (GM Feb. 25, p. 32; Aug. 20, 2021). The group green-lighted the project in February 2021 (GM Feb. 12, 2021). According to thereport, citing court documents, EuroChem filed a lawsuit against Maire Tecnimont and Société Générale SA (SocGen) and ING Groep NV in London after the banks in early August refused to pay a so-called performance bond provided as a guarantee by Maire Tecnimont, and backed by the lenders.

The banks claim they could not make the payment because of European Union (EU) sanctions on EuroChem Founder and former CEO billionaire Andrey Melnichenko. His wife, Aleksandra Melnichenko, became the new beneficiary of the trust holding the controlling 90% stake in EuroChem in May (GM May 27, p. 29). Andrey Melnichenko withdrew as a beneficiary of the group and resigned as its CEO in early March after coming under EU sanction (GM March 11, p. 1).

The value of the guarantee is equal to about 20% of Maire Tecnimont’s industrial order, according to the report, citing the Italian firm’s latest financial report.

Spokespeople for Maire Tecnimont and ING declined to comment to Bloomberg, while spokespeople for EuroChem and SocGen did not respond to Bloomberg inquiries.