All posts by mickeybarb@charter.net

Russian Fertilizer Exports Down Up to 24% in Jan-May 2022; Adjustments to Investment Plans

News, News Briefs, Russia

Russia’s exports of fertilizers in the first five months of this year declined by 24% year-over-year to 12.5 million mt, according to an Interfax report early this week, citing sources close to Russian Railways (RZD).

According to RZD, inland exports dropped 48% to 3.9 million mt, while fertilizer exports through ports were down by only 5% to 8.6 million mt.

A separate Interfax report cited the President of the Russian Association of Fertilizer Producers (RAPU), Andrey A. Guryev, as putting the fertilizer export decline at about 20% since the start of this year.

Guryev, former CEO of PhosAgro PJSC, noted that due to problems with the purchase of equipment and components, the Russian fertilizer industry is already adjusting its investment plans.

Guryev resigned his position as head of PhosAgro on March 10 following his inclusion on the European Union’s expanded sanctions list against Russia (GM March 11, p.1 & p. 34).

It emerged this week that the Russian fertilizer group has still not taken a final investment decision on a proposed new ammonia and urea production complex at Cherepovets.

According to an Interfax report, citing PhosAgro’s new CEO, Mikhail Rybnikov, the group sees risks in implementing the project, primarily from the point of view of its foreign partners. This latter is assumed to mean with project contractors.

Rybnikov, who was speaking on the sidelines of the 2022 St. Petersburg International Economic Forum (SPIEF), said PhosAgro was still having discussions on the project.

The Russian fertilizer group was believed late last year to have taken the decision to go ahead with the new RUB120 billion ammonia and urea complex, with construction planned to start in 2022 and first product expected at the end of 2025 (GM Nov. 26; Dec. 31, 2021). A production capacity of 1 million mt/y of ammonia and up to 1 million mt/y of urea was planned.

Canadian Government Pledges Up to C$100M to Help Reduce Emissions at Jansen Mine

Australia, News, News Briefs, Potash

The Canadian government has offered up to C$100 million (approximately US$77.3 million at current exchange rates) to help BHP Group Ltd. create “the world’s most sustainable potash mine” in Saskatchewan.

The federal government, which officially announced the investment on June 13, is putting the money up to help the Australian mining major to reduce the carbon footprint of the Jansen potash mine under development some 150 km east of Saskatoon. The government funds will also help the group invest in more environmentally-friendly technology at the new mine, including electric vehicles and equipment.

BHP, which recently announced it was looking at options to bring forward first production for its US$5.7 billion Jansen Stage 1 project from calendar 2027 into 2026 (GM May 20, p. 1), said it is committed to reducing emissions.

A CBC News report cited BHP President for Minerals America Ragnar Udd, speaking at the federal funding announcement. Udd said there would be 50% less carbon dioxide coming out of the Jansen mine than a traditional potash mine, and it would use 60% less water than the average mine “in terms of production of potash on a tonne-per-tonne basis.”

He said BHP expects that Jansen will generate the lowest direct onsite emissions intensity of any potash mine in North America.

According to the report, BHP also expects to use 60% less equipment underground for the Jansen mine, while being 2.5 times more productive.

Jansen’s Stage 1 is expected to produce 4.35 million mt/y of potash once fully ramped up. BHP in May revealed it had begun studies of the feasibility and economics of Jansen Stage 2, which would add another 4 million mt/y to the initial planned output (GM May 20, p. 1).

BHP’s Board only gave the final go-ahead for Jansen Stage 1 last August, after nearly a decade of evaluations and deliberations (GM Aug. 20, 2021).

The Jansen potash project has potentially four stages, with an envisioned eventual production capacity of between 16-17 million mt of potash a year.

Udd in an interview with Reuters on June 13 reiterated that BHP is open to taking on a partner for the Jansen potash project, but can also go it alone and is not currently involved in talks with potash rival Nutrien Ltd. He said BHP plans to enter the potash market alone.

Yara and JBIC to Cooperate on Clean NH3

Japan, News, News Briefs, Scandinavia

Yara International ASA, Oslo, this week said it has signed a Memorandum of Understanding (MOU) with the Japan Bank for International Cooperation (JBIC), a Japanese policy-based financial institution, to strengthen cooperation in clean ammonia.

“By signing the MOU, we have a framework for collaboration. Yara Clean Ammonia and JBIC will accelerate the formation of projects for the establishment of a global clean ammonia supply chain to Japan,” said Yara President of Clean Ammonia Magnus Krogh Ankarstrand, in a June 15 statement.

This MOU with JBIC is the fifth collaboration on clean ammonia that Yara has announced with key Japanese partners, including JERA, Kyushu Electric Power, Idemitsu Kosan, and Sumitomo Chemical.

EuroChem Plans to Comply with E.U. Sanctions on Beneficiary, Report Says

Europe, News, News Briefs, Russia, Ukraine

EuroChem Group AG intends to comply with Swiss and other laws following sanctions on the group’s main beneficiary Aleksandra Melnichenko, according to a Reuters report.

Switzerland’s State Secretariat for Economic Affairs (SECO), the organization responsible to monitoring sanctions against Russia, asked the fertilizer group to comply after the European Union (E.U.) added Aleksandra Melnichenko to its list of sanctioned individuals as part of its sixth sanctions package against Russia and Belarus, adopted on June 3 (GM June 3, p. 1).

Switzerland’s Federal Council subsequently adopted the Bloc’s sixth sanctions package, and the country’s Federal Department of Economic Affairs, Education, and Research (EAER) also approved the sanctioning of over 100 further Russian and Belarusian individuals and entities (GM June 10, p. 27).

According to a Bloomberg report on June 10, Switzerland’s list of sanctioned individuals and entities is identical to that of the E.U.

Being added to the Swiss sanctions list requires all assets controlled or owned by Melnichenko to be blocked and reported to SECO.

According to the report, SECO will make an assessment after EuroChem shows evidence it can operated legally under Swiss law.

Melnichenko, who was born in Belgrade, Serbia, and holds Serbian and Croatian citizenship, will “vigorously contest the unfortunate decision against her,” according to an earlier Reuters report, citing an emailed statement from the representative.

Melnichenko became the new beneficiary of the trust holding the controlling 90% stake EuroChem in May (GM May 27, p. 29). Her husband, Russian billionaire Andrey Melnichenko, withdrew as main beneficiary of the group and resigned his position as Non-Executive Director following his inclusion on the E.U.’s expanded sanctions list in March (GM March 11, p. 1).

Fertilizers Europe Says No Alternative to Fertilizers to Ensure Food Security

Europe, News, News Briefs

Fertilizers Europe has welcomed the European Union’s (E.U.) objective of an integrated approach on nutrient management but expressed “regret” how Member States’ governments fail to understand that the objective of food security cannot be achieved without mineral fertilizers.

The European Council earlier this month adopted its conclusions on food security, calling for more concerted efforts to work with international partners to promote a more efficient use and alternative to fertilizers.

Fertilizers Europe said it welcomes the focus on a more efficient use of nutrients and supports a combined approach that takes into account both mineral and organic sources to achieve an optimal level of fertilization.

However, the Brussels-based fertilizer industry organization, which represents the majority of fertilizer producers in Europe, said no alternative source can replace mineral fertilizers, while maintaining the same adequate level of food production and ultimately ensuring food security at E.U. and global level.

“In these extraordinary times where food supply shortages and food security are back on the European agenda, an open dialogue between the industry, farmers, and policy makers is crucial,” said Fertilizers Europe Director General Jacob Hansen on June 10.

“The European fertilizers industry recognizes the need to act decisively to reduce our dependence on Russia and improve the carbon footprint of European food production,” he said.

However, Hansen said these objectives will not be met without recognizing the contribution of all sectors and “avoiding idealistic biases.” He urged all sectors to join forces towards the common objective of sustainable food production.

Fertilizers Europe reminded that some 50% of global food production relies on mineral fertilizers and the European fertilizers industry is aware of the responsibility of providing plants with the nutrients they need to grow.

“There is no alternative source that can replace mineral fertilizers, and an effective and integrated approach to nutrient management is the only way forward to ensure sustainability while keeping up food production levels,” the organization said.

Manitoba Green Lights Potash Project; Production Eyed for Fall of 2022

Canada, Featured, News, Potash

The Manitoba government has approved Manitoba’s first potash development, allowing the Potash and Agri-Development Corp. of Manitoba Ltd. (PADCOM), Russell, Manitoba, to start extraction and production in western Manitoba. Premier Heather Stefanson made the announcement on June 14 at the Prospectors and Developers Association of Canada conference in Toronto.

PADCOM plans an initial 100,000 mt/y solution mine near the hamlet of Harrowby, on the Saskatchewan border, some 16 kilometers west of Russell. Thereafter, it plans to boost production to 250,000 mt/y, with the project having a 100-year mine life at that capacity.

“This is a significant step forward in our commitment to establish Manitoba as a global leader in sustainable mineral development,” said Stefanson. “Our government is proud to announce PADCOM has received all required approvals to move Manitoba’s first potash mining operation into production. We are working with Indigenous leadership and communities to promote participation in the mineral resource sectors and to ensure communities share in the benefits that result from growth in these sectors.”

Gambler First Nation and PADCOM have developed a partnership, with Gambler First Nation participating as a 20% equity owner.

“We are pleased to partner with PADCOM on this landmark project, which will create jobs and help spark further economic development opportunities in our community,” said Chief David LeDoux, Gambler First Nation. In addition, PADCOM will present community benefit agreements to several Indigenous communities in the area, the Manitoba Métis Federation, and the Municipality of Russell-Binscarth.

PADCOM has completed the first part of the project, in which two wells were drilled in Harrowby to explore the local potash resource and determine feasibility. Following the recent Environment Act License approval and signing of a mineral lease agreement with the province, PADCOM is now authorized to move the development to the next phase of production.

“This operation will use a more environmentally friendly mining process,” said Daymon Guillas, PADCOM President. “The physical footprint is small and the process will be using green Manitoba electricity, not fossil fuels. We are excited to partner with Gambler First Nation to develop Manitoba’s first potash operation. This initiative will help support Manitoba’s economic recovery and plays a major role in making Manitoba a global leader in mining and mineral development.”

The product will be white soluble 95-99.9% muriate of potash in a large granule form. Further compaction may be added later.

PADCOM’s plan is to sell the product to a single customer loaded on trucks. PADCOM said meetings were successful in developing a long-term offtake agreement. However, the deal has not been finalized, and the offtake partner has not been named. The buyer would be responsible for the logistics.

PADCOM said that its partner, Gambler First Nation, worked aggressively to find markets for the potash. Negotiations included Federated Co-op, as well as a consortium between a Quebec-based company and the Government of Cuba.

PADCOM said it turned down a Quebec/Cuba consortium and potential investors from California because their first questions were about cutting social and Manitoba royalties, as well as wages. PADCOM said it believes that local ownership is required to maximize the benefit from a public resource rather than out of country and/or large pension fund ownership that generally only care about increasing dividends every year “on the backs of hard-working, good people.”

As of December 2021, PADCOM said it employed six full- and part-time employees and had previously employed two Metis peoples. While the Metis peoples have recently left the company, it is hiring two additional full-time staff from the Gambler First Nation. The project is expected to create some 17-25 jobs, with production expected to begin this fall.

In addition to Gambler First Nation being a 20% partner in the project, 11% of the net profit will be given as follows: 1% each to Gambler First Nation, Birdtail Sioux First Nation, Waywayseecappo First Nation, Treaty 2 Territory, Manitoba Metis Federation, Specialized Middle School Program, and Citizenship University Program; and 4% to Socio-Economic Development Fund.

The entire footprint of the project is one hectare, privately-owned by PADCOM, which includes an underground pipeline loop that extends approximately 1,600 meters horizontally to access the potash. The complex will also include a potash processing facility with centrifuge and dryer, a crystallization plant, product storage and truck loading, water, brine and propane tanks, intake well of potash brine, downhole injection of brine well, and ancillary structures, including a permanent office. Potash will be mined using hot brine injected and extracted via wells. The project is literally on the border with Saskatchewan, and is an extension of the rich potash seams in that province.

Beechy Potash Products Corp., Beechy, Sask., is also a partner in the project. Beechy President Harvey Haugen will direct the planning for the plant at the local level. Haugen owns the technology patent PADCOM is using for the solution mining. PADCOM said the technology has a reduced environmental footprint, eliminates the necessity of salt storage on the surface, and reduces energy and water consumption.

Haugen told Green Markets that the project is about 50% complete, and that financing is in place to complete the project. He said the costs are very low compared to traditional projects.

Once up and running, Haugen said the plant’s low capital cost model can be replicated elsewhere, with plants envisaged for other locations.

The product will be initially transported by truck and then eventually rail to markets in Canada, the U.S., and internationally. The plant is just across the road from a CP Rail siding. PADCOM expects up to 7-8 truckloads of potash trucked out per day when the plant achieves 100,000 mt/y capacity or 274 mt/d, compared to some 40 trucks a day at a nearby Bunge canola plant. Another neighbor is listed as the Twin Valley Co-op’s Anhydrous Ammonia Depot.

PADCOM has an application to Manitoba Hydro to access power for the project site. If installation is delayed, the project will proceed using a diesel generator until installation can be completed by Manitoba Hydro.

Water will be trucked to the site from the nearby Russell Municipal Water Plant. This will require an estimated nine truckloads per day using their existing 4,200 gallon trucks, with the potential to be reduce to 2.5 truckloads based on plans to buy larger trucks. A water well at the site is under consideration, but would take additional regulatory review.

PADCOM said the potash resources have been studied by a number of companies over the years, with some 51 drill holes intersecting its potash zone. A major proposal was made by Canamax Resources (Manitoba Potash Corp.) in 1987 for a conventional potash mine.

BHP Billiton made a similar study in 2009. The Manitoba government put the project up for bids in 2015, and PADCOM was the successful bidder. It said its own study prior to purchase showed a total resource estimate of 231-521 million mt across both the North and South Blocks of the resource.

PADCOM said the North Block, on which it is focusing, has an estimated 111 million mt, according to a BHP study, with a 20-year life for a 2 million mt/y mine.

Total, Adani Team Up for $5 B India Hydrogen Project; Urea Plant Targeted to Replace Imports

Ammonia, Featured, France, Green Hydrogen, India, Methanol, News, Urea

French giant TotalEnergies SE, Paris, and Indian billionaire Gautam Adani’s conglomerate plan to invest $5 billion to produce green hydrogen and related products, including ammonia, urea, and methanol, in India as the world’s third-largest polluter seeks to decarbonize, according to a Bloomberg report. To start, the parties are eyeing a 1.3 million mt/ urea plant, with the urea derived from green hydrogen, to supply the domestic market as a substitution to current urea imports.

Total will buy a 25% stake in Adani New Industries Ltd., Ahmedabad, India, for an undisclosed amount, according to an exchange filing from Adani Enterprises Ltd. on June 14. Adani New Industries is a closely-held company of Adani Enterprises, the flagship firm for the coal-to-ports conglomerate. Adani Enterprises’ shares rose 5.6% in Mumbai, pushing this year’s jump to 28.5%.

The purchase would be yet another shot in the arm for Adani, who has been seeking global investors to bolster his green energy ambitions. Adani New Industries aims to invest more than $50 billion over the next 10 years in green hydrogen and its ecosystem, the filing said, as part of the group’s broader plan to boost its presence in the green-energy value chain. Green hydrogen projects will also help India – the world’s third-largest carbon emitting country – to slash its reliance on oil and coal as it chases the target of being net-zero carbon by 2070.

“To meet India’s energy transition goals, we need big money and technology to come into the green hydrogen sector to drive down the costs,” said Debasish Mishra, a Mumbai-based partner at Deloitte Touche Tohmatsu. “India can’t think of a decarbonization roadmap without green hydrogen.”

Total is boosting clean-energy output while reigning in oil-product sales as shareholders demand greater efforts to fight climate change. It has previously teamed up with Adani to invest in natural gas and renewables in India, where the government this year unveiled plans – and incentives – for massive hydrogen growth.

In 2019, Total bought a 37.4% stake in Adani Gas Ltd. – now called Adani Total Gas Ltd. – and last year spent $2.5 billion acquiring 20% of Adani Green Energy Ltd. and a 50% stake in a portfolio of solar assets.

While hydrogen is still a long way from being commercially viable, India targets production of 5 million mt by the end of the decade.

Adani New Industries will start by investing around $5 billion to build 2 gigawatts of hydrogen-producing electrolyzers powered by a 4-gigawatt solar and wind farm to support the urea plant. The venture eventually plans to target 1 million mt of green hydrogen production a year by 2030, underpinned by 30 gigawatts of clean power capacity.

Manitoba Dedicates C$10 M to Mining Industry

Canada, News, News Briefs

The Manitoba government said on June 13 that it is dedicating C$10 million to the mining industry through a renewed partnership with the Manitoba Chambers of Commerce (MCC) and the Manitoba Mineral Development Fund (MMDF). Premier Heather Stefanson announced the news on June 13 at the Prospectors and Developers Association of Canada conference in Toronto.

“As we continue to recover from the pandemic and build our economy, our government is focused on attracting new investment into Manitoba’s mining sector and increasing Indigenous participation in mineral development activities,” said Stefanson. “The MMDF supports strategic projects that capitalize on our vast mineral potential within the province and helps accelerate Manitoba’s position as a world leader for responsible mineral development.”

The renewed agreement with the MCC, which administers the MMDF, will provide $10 million to support the mineral sector supply chain over three years. This investment will enable Manitoba to capitalize on emerging opportunities among its diverse and untapped minerals and position itself as a leading destination for mining, noted Stefanson, who added the renewed agreement represents an increase in funding to support mining and mineral development initiatives by 66%.

In 2019, the Manitoba government established the MMDF to provide funding for mining and mineral development-related projects throughout the province. Through the fund, communities and businesses, including Indigenous groups, municipalities, and the not-for-profit sector, are eligible to apply for funding. Financial assistance from the fund could include one-time grants for activities that help advance new mining opportunities and provide support to Indigenous communities for collaborative resource development. To date, MMDF has allocated more than $5.4 million to 41 projects.

This investment builds on the Manitoba government’s commitment to grow the mining industry, including the establishment of the Manitoba Permit Office to focus permit modernization efforts, in response to industry recommendations to eliminate red tape to help grow and develop this important sector, noted the premier.

Several Injured by Explosion in Iran

Ammonia, Iran, News, News Briefs

More than 133 people were sent to local hospitals on June 13 after a leak from an ammonia tank caused an explosion at a chemical complex in the Iran city of Firouzabad in Fars Province, some 480 miles south of Tehran, according to an Associated Press report citing Iranian television.

Some 114 were released from the hospital after treatment, according to local health officials. There were no initial reports of fatalities. The specific facility was not identified, however, it was reported to have come online in 2020.