All posts by mickeybarb@charter.net

Lifosa Halts Operations as E.U. Sanctions Freeze Bank Accounts

Featured, Lithuania, News

Lithuania’s Kėdainiai-based phosphate fertilizer producer and EuroChem Group AG subsidiary AB Lifosa halted operations on April 10 after banks froze the company’s accounts around a month ago, according to a report by Lrt.It, the website of the Lithuanian national broadcaster, LRT.

According to the report, Lifosa’s bank accounts were frozen due to the European Union (E.U.) sanctions imposed on EuroChem Group’s former controlling shareholder and CEO Russian billionaire Andrey Melnichenko on March 9 (GM March 11, p. 1). Melnichenko subsequently resigned from the EuroChem board and withdrew as a main beneficiary of the group following his inclusion on the E.U.’s expanded list of sanctioned Russian individuals.

Melnichenko had previously controlled 90 percent of EuroChem Group via Cyprus-based AIM Capital SE. A EuroChem statement on March 10 announcing the Melnichenko step-down did not specify how the company’s ownership would be re-structured.

Lifosa exported 398,881 mt of DAP in 2021, which was a 27 percent reduction on 2020 export volumes of 543,398 mt, according to Trade Data Monitor. The company has a DAP production capacity of 1 million mt/y.

The producer has a four-month operation plan and hopes to resume production at a reduced capacity in May, according to the report, citing Lifosa CEO Rimantas Proscevičius.

According to the CEO, the company could produce two types of products completely disconnected from its links with Russia and Belarus, with raw materials sourced from elsewhere and payments made through a Lithuanian bank.

In the meantime, some employees will continue to work and carry out essential maintenance work. Lifosa employs more than 1,000 people. However, the head of the company’s trade union, Kestas Šlama, was earlier cited by a Baltic News Service (BNS) report that some 300 to 400 workers may have to be laid off if production was suspended.

Lifosa has been allowed to access some of its frozen funds in order to conduct some essential financial transactions after Lithuania’s Ministry of Foreign Affairs granted an exemption, BNS reported. These transactions include payments of salaries and wages to employees and payments for services necessary for the company’s activities.

E.U. Imposes Cap on Imports of Russian Potash and Complex Fertilizers

Featured, News, Potash, Russia

The European Union (E.U.) has imposed a cap on imports of Russian potassium chloride (CN 3104 20) and of Russian NPKs (CN 3105 20) and PKs (3105 60) and other fertilizers containing potassium chloride into the Bloc as part of its latest package of sanctions against Russia agreed by Member States on April 8 (GM April 8, p. 1).

According to its Official Journal, the E.U. has set a quota of 837,570 mt of potassium chloride (CN 3104 20) starting July 10, 2022, through July 9, 2023, and 1,577,807 mt combined of the specified NPKs, PKs, and other fertilizers containing potassium chloride for the same period.

According to some industry sources, the European Commission (E.C.) was not able to push through a ban on Russian imports of potassium chloride. Instead, imports were capped at historic levels. Last year, the E.U. imported about 783,240 mt of all grades of Russian potassium chloride, according to Trade Data Monitor. The imports from Russia accounted for some 14.5 percent of the Bloc’s potash imports in 2021.

The restrictions do not apply to shipments until July 10 under contracts signed prior to April 9, 2022, the day the new sanctions came into force.

The cap on Russian imports of potassium chloride was a way to avoid the ban on potash imports from Belarus being circumvented via Russia. The E.C. on April 8, announcing the agreement of Member States to adopt the new sanctions package, said it was also including “an anti-circumvention” measure against potash imports from Belarus.

The E.U. first imposed a ban on certain grades of Belarusian potash in June 2021 (GM June 25, 2021), and subsequently expanded the import ban in February of this year to cover all grades of Belarusian potash, and crucially, imports of product with a potassium content evaluated as K2O by weight, exceeding 40 percent but not exceeding 60 percent on the dry anhydrous product (GM March 4, p. 30). The move, part of wider sanctions package against Belarus, was in response to the country’s role in supporting Russia’s invasion of Ukraine.

The. E.U. has typically imported about 14-18 percent of its annual potash requirements from Belarus, according to Trade Data Monitor.

Combined Nomenclature
(CN) Code 		Product
3104 20 Potassium chloride
3105 20 Mineral or chemical fertilizers containing the three fertilizing elements nitrogen, phosphorus, and potassium
3105 60 Mineral or chemical fertilizers containing the two fertilizing elements phosphorus and potassium
ex 3105 90 20 Other fertilizers containing potassium chloride
ex 3105 90 80 Other fertilizers containing potassium chloride

The E.U. in this latest sanctions package against Russia has not imposed restrictions against imports into the Bloc from Russia of other types of fertilizers.

As previously reported, the new sanctions do include an entry ban on Russian flagged vessels and Russian-operated vessels from accessing to E.U. ports. However, the E.U. has made exemptions to this ruling to cover what it describes as “essentials” cargo, such as agricultural and food products, humanitarian aid, as well as energy, among others.

The Official Journal listed Russian flagged and Russian-operated vessels with cargoes of anhydrous ammonia (CN2814 10 00) as excepted from the ban. The E.U. imported 3.9 million mt of ammonia in 2021, of which Russian tons were 997,521 mt, or 26 percent of the total, according to Trade Data Monitor.

As reports of more atrocities at Russian hands emerge from Ukraine, the E.U. is looking at a fresh set of sanctions against Russia. The E.U. is moving toward adopting a phased-in ban on Russian oil intended to give Germany and other countries time to prepare alternate suppliers, the New York Times reported, citing officials and diplomats. A Russia oil embargo would not be put up for negotiation until after French elections.

Orica, H2U Partner for Green Ammonia Initiative

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

Melbourne-based explosives manufacturer Orica Ltd. and Australian green hydrogen infrastructure developer The Hydrogen Utility (H2U) have partnered up to initiate the first phase of a proposed multi-billion chemical complex producing green hydrogen and green ammonia at Gladstone, Queensland.

The so-named “H2-Hub” Gladstone project has a planned capacity of up to 3 gigawatts of electrolysis and up to 5,000 mt per day of green ammonia from new-build solar and wind resources in the Queensland region.

Under a Memorandum of Understanding on a master plan study signed on April 12, the two companies will explore opportunities for an exclusive domestic green ammonia offtake and supply agreement, the Queensland government said in a media statement.

The potential agreement would see green ammonia supplied directly to Orica’s Yarwun ammonium nitrate manufacturing plant from H2U’s proposed Yarwun green ammonia production plant.

The partnership will also see Orica and H2U explore opportunities for a potential green ammonia export terminal at the Port of Gladstone.

“Being able to leverage off existing Orica ammonia storage capacity and the associated connecting infrastructure in the Gladstone State Development Area is an added benefit of this fantastic project,” said Minister for Regional Development and Manufacturing, Minister for Water, and Member for Gladstone Glenn Butcher.

The master plan study will run for approximately six months, with Front-End Engineering and Development (FEED) approval activities scheduled to commence towards the end of 2022.

The financial investment decision for the activation phase of the development is scheduled by June 30, 2023, with the H2-Hub Gladstone slated for operational activity to begin in 2025, according to the Queensland government statement. An expansion phase for the project is targeted to take place between 2027-2030.

Phosphate Sales from Disputed Region Up 26 Percent in 2021; More Planned

Morocco, News, News Briefs, Phosphate, Phosphate Rock

Belgium-based Western Sahara Research Watch (WSRW), which advocates for the rights of the Saharawi people of the disputed Western Sahara territory controlled by Morocco, released a report on April 6 looking at phosphate rock trade from the territory during 2021.

It is WSRW’s ninth annual overview of what it describes as “illegally exploited” phosphate rock. The disputed region is home to OCP SA’s Phosboucrâa phosphate mining operation.

According to the report, 26 vessels departed from the territory with a total of 1.417 million mt of phosphate rock in 2021, up from 22 ships and 1.123 million mt in 2020, a 26 percent increase in volume year-over-year.

The biggest offtaker remains India, taking 10 shipments with a total of 572,336 mt last year, according to WSRW. This volume was down 20 percent over 2020’s offtake of 719,136 mt. Paradeep Phosphates Ltd., a wholly-owned subsidiary of Zuari Maroc Phosphate, in turn a 50:50 joint venture of India’s Zuari Agro-Chemicals Ltd. and Maroc Phosphore Ltd., is India’s sole buyer of phosphate rock from the disputed territory.

WSRW highlighted the resumption of phosphate rock imports last year from the disputed territory by U.S. company Innophos Holdings into Mexico. The company became the leading importer from the territory during the second half of 2021 following the arrival of the year’s first shipment to the port of Coatzatcoalcos, Mexico, on Aug. 2, 2021, the organization said.

According to the report, Innophos took in 43 percent of all phosphate rock shipped from the disputed Western Sahara region last year. The seven shipments that it received during the last five months of 2021 totaled 391,000 mt.

New Zealand fertilizer cooperatives Ballance Agri-Nutrients and Ravensdown took a combined 347,000 mt of phosphate rock from the disputed region in 2021, up almost 50 percent on 2020’s volumes of 232,000 mt. Of the 2021 New Zealand imports, Ballance received five shipments totaling 292,000 mt and Ravensdown one shipment totaling 55,000 mt, according to WSRW.

According to the report, Ballance’s offtake was responsible for the year-over-year increase, and WSRW noted the New Zealand farmer’s cooperative’s total annual purchase in 2021 was the largest since the activist organization started daily monitoring of the trade in 2011-2012.

The report noted that EuroChem Group made a shipment in October from the disputed region in 2021, the first import by the group from the disputed territory in five years. According to WSRW, the 34,000 mt shipment was destined for Estonia, where EuroChem in 2020 opened a new terminal at Sillamäe. The group’s Lithuanian subsidiary Lifosa AB, an earlier importer of phosphate rock from the region, stopped the trade in 2016.

WSRW in its report observed that not a single shipment of phosphate rock from the territory had been routed via South Africa’s Cape of Good Hope or through the Panama Canal since the bulk carriers Cherry Blossom and Ultra Innovation, respectively, were detained by the South African and Panamanian authorities in 2017 under civil maritime orders following a legal complaint from the Western Sahara Polisario Independence Movement.

Both ships were carrying Phosboucrâa rock. The Cherry Blossom was detained for more than a year (GM May 11, 2018; May 5, 2017), while the Ultra Innovation was released after less than three weeks (GM May 26, 2017; May 19, 2017).

The activist organization also highlighted the major investments being undertaken by OCP and the Moroccan government in the Phosboucrâa phosphate production facilities and in a new 1 million mt/y fertilizer production complex at Al-Marsa near the Atlantic port of Laâyoune (also known as El Aaiún), through which OCP currently exports Phosboucrâa phosphate rock.

OCP is investing an envisaged $2.2 billion in the construction of the 1 million mt/y fertilizer production facilities, which will also include a sulfuric acid unit and phosphoric acid unit, as well as a granulation unit. The project was launched in 2016, following the green light from the Moroccan government (GM Feb. 12, 2016). At the time, OCP said the focus of the fertilizer exports from the new plant would be across Africa.

The Moroccan group has made few public comments internationally on the project’s progress since its launch.

According to WSRW, OCP is targeting to start operations at the new plant by 2023. However, this could not be confirmed with OCP by Green Markets press time.

New extraction methods, a new washing unit, and additional storage facilities are also being developed at the existing Phosboucrâa mining operation. OCP in 2020 reported it was planning to roll out a reverse flotation process to exploit deeper layers of the open-pit mine, where reserves are said to be lower-quality rock.

The Morocco government is also investing in a new deepwater mega-port in the disputed region, the so-called Dakhla-Atlantic port, located some 550 km south of Laâyoune (GM Oct. 8, 2021).

Australia’s NeuRizer Approves Stamicarbon as Urea Licensor

Australia, News, News Briefs, Urea

Australia’s NeuRizer Ltd. (formerly Leigh Creek Energy), Adelaide, has approved the appointment of Netherlands-based Stamicarbon as the urea licensor for its proposed 1 million mt/y urea project at Leigh Creek, located some 550 kilometers north of Adelaide and overlaying the Leigh Creek coalfield. The project will utilize in-situ gasification (ISG).

Last week, Houston-based KBR Inc. was appointed as ammonia licensor for the project (GM April 8, p. 29).

Under the Engineering, Procurement, Construction, and Commissioning (EPCC) contract between NeuRizer and South Korea’s DL E&C Co. Ltd., NeuRizer has the right to approve the appointment and selection of the technology providers.

DL E&C was appointed the urea project’s EPCC partner in June 2021 (GM July 2, 2021).

Under the licensor contract, Stamicarbon will deliver the Process Design Package for the urea project, a critical requirement for DL E&C to complete its commitment to provide the Front-End Engineering and Design (FEED) for the project, NeuRizer said.

Early this month, the Australian company announced it had inked an agreement with DL E&C for the FEED for a carbon capture storage (CCS) facility at the urea project site (GM April 8, p. 29).

Compass Receives Maximum Earn-Out

News, News Briefs, South America, Southern Plains, Specialty

Compass Minerals, Overland Park, Kan., said on April 12 that it has received an earn-out payment of approximately R$88 million, or US$18.5 million based on current exchange rates, associated with the sale of the company’s South America specialty plant nutrition business. This payment represents the maximum earn-out possible under the terms of the sale.

As previously announced, the company completed the sale of its South America specialty plant nutrition business to a subsidiary of ICL Group in July 2021 as part of its portfolio optimization efforts (GM July 2, 2021).

The company intends to use the proceeds from the earn-out payment to pay down debt.

Arianne Collaborates with Northern Nutrients on Alternative Fertilizers

Canada, News, News Briefs, Phosphate, Specialty

Arianne Phosphate, Saguenay, Quebec,a development-stage phosphate mining company advancing its Lac à Paul project in Quebec’s Saguenay-Lac-Saint-Jean region, has entered into a collaboration agreement with Northern Nutrients, Saskatoon, Sask., to advance the use of its high-purity phosphate concentrate in alternatively derived fertilizers.

“I am extremely excited by the prospects of this work and what it can mean for Arianne,” said Brian Ostroff, Arianne President. “Arianne’s extremely rare, high-purity, low-contaminant phosphate concentrate is ideal for these alternative applications where the farmer will be very conscious of what is being spread on their field.

“As well, by being situated in Quebec, Canada, it removes ‘security of supply’ issues associated with where fertilizers are currently sourced from, and should remove many of the risks that we are unfortunately witnessing,” he continued.

“Lastly, similar to Arianne’s work within the LFP (lithium-iron-phosphate or lithium ferrophosphate) battery space (GM Nov. 5, 2021), expanding the possible customers for our product expands possible offtakers and partners for our project and the unlocking of the substantial economics for our shareholders and stakeholders,” Ostroff added.

Arianne said it has provided its phosphate concentrate to be combined into Northern Nutrient’s proprietary fertilizer compositions to derive a multi-nutrient fertilizer that can be directly applied to the farmer’s field. Testing of this new and proprietary fertilizer will commence this growing season, with results available through late summer and fall of 2022.

In February, Arianne announced that it was expanding its reach into alternative fertilizers through work with both research and corporate organizations. It said the benefits of this work would result in the ability to integrate the company’s phosphate concentrate directly into fertilizers without having to first transform it through acidulation.

Traditional phosphate fertilizers, such as MAP and DAP, require the acidulation process and results in producers of phosphate concentrate, such as Arianne, having to contract with these phosphoric acid facilities.

Arianne also said the process would eliminate the need to add ammonia/nitrogen into the finished fertilizer as required in MAP and DAP. It said this would be extremely economical.

The company said the collaboration with Northern Nutrient would produce a uniquely Canadian offering, reliant solely on domestic inputs and technology. It would also remove the logistical challenges and additional costs associated with shipping and transforming materials through numerous jurisdictions.

Northern Nutrients was founded in the Netherlands in 2016 as a distributor of low-salt and sustainable fertilizers. The Canada-based company Northern Nutrients Ltd. began operations in 2018 as the North American marketing and distribution partner for Korean sulfur-based fertilizer producer H Sulphur’s Super S (11-0-0-75) sulfur and urea fertilizer product (GM June 29, 2018). Last year it began construction of a sulfur-enhanced urea plant outside of Saskatoon (GM June 25, 2021).

Abu Dhabi Green Project Advances

ADNOC - Abu Dhabi, Green Ammonia, Green Hydrogen, News, News Briefs

Germany’s Thyssenkrupp has completed the technical study for the planned $1 billion green hydrogen and green ammonia facility at the Khalifa Industrial Zone Abu Dhabi (Kizad) (GM May 28, 2021), according to Informa Energy.

The project includes a water electrolysis plant. Financial studies are also believed to have been completed. The first phase would produce 20,000 mt/y, with plans to increase this to 200,000 mt/y from 40,000 mt/y of hydrogen.

Grupa Azoty Takes Hit from Outage

News, News Briefs, Poland

Polish fertilizer and chemicals company Grupa Azoty SA said on April 11 it will take a Pln34.2 million (approximately $8 million at current exchange rates) hit to its FY22 financial results from the recent production stoppage at subsidiary Zakłady Chemiczne Police S.A, according to a Polish Press Agency (PAP) report, citing a company market filing.

At Police, the negative impact of the stoppage is estimated at Pln60 million.

The hit is due to the cost of repairing two boilers at the power plant at the Police production site that caused the production stoppage and the loss of profit as a result of the production outage.

Zakłady Chemiczne Police on March 9 declared a force majeure event due to the failure of the two boilers, which resulted in “a temporary stoppage or a very significant limitation of production” (GM March 18, p. 32).

The subsidiary was able to partly restore production later that month after it was able to fix one of the two boilers that had broken down (GM March 25, p. 29). This week, the company reported the stoppage fully ended on April 8.

Meanwhile, Grupa Azoty posted preliminary results for fourth-quarter 2021, ending Dec. 31. It expects group net profit to soar to Pln365 million, up from the year-ago Pln92, according to a company market filing cited by PAP.

Group EBITDA is also expected to surge to Pln887 million in the fourth quarter, up from Pln318.7 million, while revenues are expected to double to Pln5.48 million from Pln2.74 million.

Grupa Azoty’s Fertilizers/Agro business segment is expected to see a fourth-quarter EBITDA of Pln355 million.

The fertilizers and chemicals group said the segment’s positive results were boosted by higher sales prices of all the fertilizer products, which offset declines in sales volumes. It highlighted that the higher prices came on the back of higher production costs, mirroring trends seen by other European fertilizer producers.

Grupa Azoty reminded it did not stop or reduce fertilizer production in the fourth quarter, and said its fertilizer prices were “one of the lowest in the European Union” as the group made efforts to secure the demand on the domestic market.

The group sees full-year 2021 net profit at Pln633 million and EBITDA at Pln1.95 billion. Full-year revenues are expected to come in at Pln15.9 billion.

It expects to publish its 2021 financial report on April 27.