All posts by mickeybarb@charter.net

Kore Potash Project Advancing

Africa, London, News, News Briefs, Potash

Junior miner Kore Potash plc, London, reported that the process to finance its planned Kola potash project in the Sintoukola Basin in the Republic of Congo is advancing in line with a Memorandum of Understanding signed last year (GM April 9, 2021).

The company expects to receive a completed Optimization Study Report and an Engineering, Procurement, and Construction (EPC) contract proposal by the end of first-quarter 2022. Thereafter, it expects to receive a finance proposal from the Summit Consortium for the full construction cost within 60 days.

Kore currently owns 97 percent of Kola, where a 2.2 million mt/y mining operation over a 33-year life is being targeted.

Kula Bio Raises $50 M to Accelerate Bio Nitrogen Fertilizer Production

News, News Briefs, Nitrogen, Northeast, Specialty

Boston-based startup Kula Bio has raised $50 million from venture funds to accelerate production of what it calls a “next generation” nitrogen fertilizer that’s designed to be more environmentally friendly than traditional crop inputs.

Kula Bio’s patent-protected fertilizer product, Kula-N, uses bacteria to remove nitrogen from the air and deposit it in soil, helping cut down on the “incredible environmental issue” caused by traditional nitrogen fertilizers, CEO Bill Brady told Bloomberg in an interview.

He said Kula Bio plans to use the funds to build manufacturing facilities near major produce farmers in California and Arizona, and then branch out to growers of row crops such as corn and soybeans. He said the product will be cost competitive to traditional fertilizer, and should be ready for its first customers by year end or early 2023.

Kula Bio was founded in 2018 using research developed at Harvard University. The company said it has run a series of third-party replicated field trials across diverse geographies, soil types, and crops, proving that it can replace up to 80 percent of a farm’s nitrogen use.

“Kula Bio’s drop-in replacement for synthetic fertilizer costs less, yields more, and zeroes out nitrogen runoff,” said Clay Dumas, founding Partner at Lowercarbon Capital. “We’re speeding up their growth to turn the lights out at Haber-Bosch plants.”

Lowercarbon Capital led the $50 million investment round, which included backing from Collaborative Fund, Grantham Trust’s Neglected Climate Opportunities Fund, iSelect Fund, Pillar VC, Embark Ventures, and BOPU.

The Nature Conservancy participated in a $10 million raise in 2021. Other investors in that round included Agfunder, Box Group, and Decent Capital, as well as some of those participating in the most recent round.

CF, CO2 Industry Talks Continue as Expiration of Supply Deal Approaches

Carbon Dioxide, Eastern Cornbelt, News, News Briefs

CF Industries Holdings Inc., Deerfield, Ill., is continuing to negotiate with its U.K. industrial gas customers to extend the carbon dioxide (CO2) offtake and pricing agreements agreed to in October, which are set to expire at the end of this month, a company spokesperson confirmed to Green Markets on Jan. 28.

Under the deal struck in October, the food and drink industry agreed to pay more for CO2from CF, which produces about 60 percent of the U.K.’s commercial supply of the byproduct gas (GM Oct. 15, 2021).

Soaring natural gas prices led CF to halt operations at both its Billingham and Ince, U.K., manufacturing complexes on Sept. 15 (GM Sept. 17, 2021). Production resumed at Billingham on Sept. 21 after the U.K. government stepped in with “limited” financial support for the company for three weeks, before facilitating the current deal with the industry (GM Sept. 24, 2021).

The restart did not include the Ince plant at Cheshire, but CF said in a third-quarter earnings call on Nov. 4 it aimed to bring the fertilizer operations at the closed Ince plant back online “in the next few weeks,” but would use brought-in ammonia (GM Nov. 5, 2021). It said producing ammonia at the facility would not make sense given the price of natural gas during the winter months. CF did not respond to Green Markets’ questions this week regarding the Ince plant.

CO2 is a by-product of the ammonia production process. The two CF plants produce an estimated 60 percent of the U.K.’s CO2 .

According to a Bloomberg report this week, the U.K.’s Department for Business, Energy, and Industry Strategy has said the government will not put up further cash, and it is for the CO2industry to ensure supplies to U.K. businesses.

CO2 is vital for many of the U.K.’s food processing and drink sectors. The gas is used in slaughter houses to stun pigs and chickens, for carbonating beer and soda, and extending the shelf life of fresh food, among other uses.

The gas is also used in the country’s hospitals and nuclear power industry, among others.

CF’s two U.K. plants largely produce ammonium nitrate and NPKs.

SABIC Agri-Nutrients Inks Deal to Buy 49 Percent Stake in ETG Inputs

Featured, Middle East, News, Saudi Arabia

SABIC Agri-Nutrients Co., Riyadh, has signed a binding agreement to acquire 49 percent of the share capital of Dubai-based agri-nutrient blender and distributor ETG Inputs Holdco Ltd., the Saudi company said in a Jan. 24 filing to Saudi’s Tadawul.

SABIC Agri-Nutrients Co. has agreed to pay an enterprise value of $320 million (equivalent to SAR1.2 billion), based on cash free, debt free, and changes in the working capital adjustment that will determined at transaction completion.

The deal was agreed with ETG Inputs Holdco’s parent, ETC Group, also based in Dubai.

ETG owns more than 350 distribution centers across sub-Saharan Africa, and blends and distributes specialized fertilizers and agro chemicals. The company, according to ETC Group, has positioned itself to cater to commercial and smallholder farmer requirements across the African continent, including the most rural areas where opportunity is scarce.

SABIC Agri-Nutrients said the stake acquisition is part of its strategy direction to integrate the value chain to include blending and distribution of agri-nutrients in global markets and move closer to farmers and end-customers. This, it said, would “expand and take advantage” of growth opportunities to keep up with expected developments and position SABIC Agri-Nutrients as a leading player in the global agri-nutrients industry.

ETC Group said the introduction of the Saudi company as a 49 percent stakeholder will strengthen ETG’s efforts to “further penetrate the agricultural inputs markets globally, extending beyond Africa.”

The transaction with ETG Inputs Holdco remains subject to regulatory approvals and other conditions, and will be financed by SABIC Agri-Nutrients’ own resources in addition to bank facilities.

The Saudi company expects the financial impact of the transaction to occur during the second-half of its fiscal year ended Dec. 31, 2022.

SABIC Agri-Nutrients owns SABIC’s 50 percent stake in National Chemical Fertilizer Co. (Ibn Al-Baytar) and in Al-Jubail Fertilizer Co. (Al Bayroni), and its 33.33 percent holding in Bahrain-based nitrogen fertilizer producer Gulf Petrochemicals Industries Co. (GPIC). Its product portfolio includes ammonia, urea, DAP, and specialized fertilizer.

Saudi Basic Industries Corp. (SABIC), in turn, owns a 50.1 percent stake in SABIC Agri-Nutrients Co.

ETG acquired South Africa’s Farmisco (Pty) Ltd., trading as Kynoch Fertilizer, a leading plant nutrient supplier, in 2014, and in 2019 acquired liquid and granular fertilizer blender and supplier Profert Holdings (Pty) Ltd., whose core business is Profert Fertilizer (GM April 5, 2019). ETG’s brands also include Falcon and Zambian Fertilizers.

South Africa’s Public Investment Corp. (PIC) acquired a 49 percent equity stake in ETG in 2017 (GM Dec. 22, 2017), but it could not be confirmed by Green Markets’ press time if PIC has since divested this stake or reduced the holding.

Incitec Pivot Boosts AdBlue Production; Gibson Island Decision Stays in Place

Australia, News, News Briefs

Incitec Pivot Ltd. (IPL), Southbank, Victoria, has boosted AdBlue production, producing and distributing just over 3 million liters of the diesel engine emissions reduction product across Australia in the seven days ending on Jan. 23, according to a company statement.

The milestone follows the commissioning and completion of new manufacturing capability at IPL’s Gibson Island site in Brisbane, increasing quality assurance testing to 24/7 operations, as well as a new Brisbane AdBlue terminal capable of loading the equivalent of three B Double vehicles per hour for distribution to the industry, IPL said.

The production increase is of “many multiples” compared to its baseline rates in December, and the company will report specific numbers soon, IPL Managing Director and CEO Jeanne Johns told analysts in an IPL Business Update call on Jan. 19.

Furthermore, the company aims to further increase production of AdBlue at Gibson Island in the coming weeks and months to meet Australia’s needs, but the decision announced in November last year to cease manufacturing at the plant at the end of December 2022 remains in place, IPL said (GM Nov. 12, 2021).

The company has been working closely with Australia’s Federal Government to increase manufacturing capacity of the urea used to make AdBlue solution and of AdBlue itself during December (GM Dec. 31, 2021). Country-wide shortages of technical-grade urea, which is used to make AdBlue solution, in recent weeks have been threatening to bring Australia’s transport industry to a halt.

Around 90 percent of the Australian AdBlue market is reliant on imports of technical grade urea, with China typically supplying around 80 percent of that. But supply has dried up since China put export restrictions in place on its urea exports. Australia in recent weeks has been forced to turn to the international market to alleviate some of the AdBlue supply deficit.

“Until now, this essential product for modern diesel engines has been a small by-product produced at our Gibson Island plant, and had supplied about 10 percent of the Australian market,” Johns told analysts. “Since we became aware of the urgency of the national shortage, we have worked collaboratively with the federal government to dramatically increase our production.”

IPL is the only Australian manufacturer to make the AdBlue solution from urea melt.

When Australia’s AdBlue supply shortage is less critical, the company plans to undertake a manufacturing assessment to produce technical grade urea, a granulated (non-liquid) form of urea that can be supplied to Australian AdBlue blenders to manufacture liquid AdBlue.

If the manufacturing assessment is successful, the company said it would produce technical grade urea, in addition to manufacturing AdBlue.

But IPL has emphasized that “importantly” at the same time, it has also taken steps to ensure there are no impacts on the ongoing fertilizer urea supplies to Australian farmers.

IPL’s decision to cease production at the Gibson Island plant at the end of December 2022 was due to the company “despite extensive efforts” being unable to secure “an economically viable” long-term gas supply to its plant beyond its current supply contract.

Responding to an analyst’s question whether the company’s AdBlue initiative had opened up any discussions on the importance of domestic manufacturing and possibly opening the door to an extension of the life of the Gibson Island plant, Johns said the logic behind the decision to cease production at Gibson Island hasn’t changed and “unfortunately,” the decision has stayed in place.

“The decision we made last year was a very difficult decision, and it was done after a lot of analysis in different price ranges, both urea and natural gas,” she said. “Without competitive international gas, the economic viability of the plant just does not justify the retention of keeping it open.”

“But we are really pleased to be able to help out throughout 2022 with the AdBlue supply chain issue,” Johns said.

Incitec Pivot Updates on Biofertilizer Plans; Three Australian Plants Anticipated

Australia, News, News Briefs, Specialty

Incitec Pivot Ltd. (IPL), Southbank, Victoria, last week provided further context on its investment in the Australian Bio Fert Co. (ABF), announced in December (GM Dec. 17, 2021). The investment is being made through the company’s Incitec Pivot Fertilisers (IPF) business.

As previously reported, IPF said it initially will invest A$38 million (approximately US$27.2 million at current exchange rates) in the Rowville, Victoria-based company and build Australia’s first large-scale sustainable fertilizer plant.

IPL Managing Director and CEO Jeanne Johns confirmed in a company Business Update call on Jan. 19 that site works on the 75,000 mt/y granular biofertilizer plant near Lethbridge, Victoria, is due to start in the second quarter of this year. Product is expected to available in commercial quantities to customers in the middle of 2023.

“Any further investment will be demand-led and subject to our return on investment criteria,” Johns told analysts.

But she said IPL anticipates potentially three Australian plants in total to service the bio-fert market, while opportunities outside of Australia will be pursued with the licensing business model.

The Australian bio-fert business enables IPL to leverage its distribution platform into the high-quality horticultural sector, with a premium fertilizer offer that has performance and sustainability at its core, said Johns.

While the product is ideally suited to the premium horticulture sector, an extensive product range has been developed to suit a broad range of Australian crop market sectors, she said.

Belarus Potash Co. Seeks Renewal of Lithuanian Rail Transit; Belaruskali Sues

Belarus, Lithuania, News, News Briefs, Potash

Lithuanian state-owned railway company Lietuvos Geležinkeliai’s (LTG) has received three requests from Belarusian companies to transport Belaruskali OAO potash/fertilizers, according to a report this week by Warsaw, Poland-based Belsat TV, citing LTG’s website.

According to the report, the requests have come from Belarus potash marketing/exporting company Belarusian Potash Co. (BPC), Belarus transport and logistics center Bellinertrans; and Belkali-Migao LLC, the Belarus-based potassium nitrogen/NPK production joint venture between Belaruskali and China’s Migao Corp.

BPC was reported to be asking for an agreement on the transport of potash from Jan. 24, arguing it is necessary for it to meet its obligations to sell potash through the Lithuanian port of Klaipėda.

The transit of Belarus potash on LTG’s railroads will halt from Feb. 1 following a decision by the Lithuanian government earlier this month to end the railway contract between LTG and Belaruskali over national security concerns (GM Jan. 14, p. 1).

LTG said it needs legal grounds to reject the three companies’ requests, and is reported to have submitted the requests to a Lithuanian special commission that will decide whether concluding contracts with these Belarusian companies threaten Lithuanian national interests, according to the report.

The decision to invalidate the current transportation contract between LTG and Belaruskali was due to the fact the contract was not put before the parliamentary commission, according to the report, citing Lithuania’s Head of the Committee of National Security and Defense of the Seimas (unicameral parliament) of Lithuania, Laurynas Kasčiūnas. LTG’s CEO Mantas Bartuska earlier agreed to step down an attempt to “de-escalate” the outcry (GM Dec. 17, 2021).

LTG does not rule out applications from other cargo carriers and intermediary firms to undertake the transit of Belarusian potash, but these – including private companies – would also have to first apply to the parliamentary commission for permission.

However, Kasčiūnas was cited by the report as saying the chances to bypass the ban on the transit of Belarusian potash/fertilizers in Lithuania were “almost zero,” given that the commission would consider such a transit “a threat to national security.”

Meanwhile, Belaruskali said this week it will demand “full compensation” from LTG for the losses caused by the termination of the contract to transport Belarusian potash/fertilizers,Belarus state-run news service BelTA reported, citing the Russian language ONT TV channel.

The Belarus potash producer said LTG will need to compensate “all the parties which stand to incur losses, including the companies’ partners in other countries.”

On Jan. 29, Belaruskali filed a complaint with the Vilnius Regional Administrative Court over the Lithuanian government’s decision to terminate the contract between Lithuanian Railways and the potash producer, according to a Bloomberg report citing BNS, which cited the court.

Most of Belarusian potash exports – some 10.7 million mt out of a total of 11.8 million mt in 2020 – as well as some NPK fertilizer exports, are railed via Lithuania’s rail system for onward shipment from the port of Klaipėda.

In a separate development, Belarusian logistics operator Beltamozhservice and a Chinese international transport company, Taitong International Transport Co., have signed an agreement on partnership and strategic cooperation aimed at making transportation between Belarus and China more attractive, according to a BelTA report this week, citing Beltamozhservice’s press office.

Taitong operates the Hebei-Europe International Freight Train, launched in April 2016, which runs between Hamburg, Germany, and the Shijiazhuang international land port in north China’s Hebei Province. According to media reports, the train takes around 18 days to travel between Shijiazhuang and Hamburg and carries around 100 TEU of cargo.

It is unclear if Belarusian potash cargoes will be a contender for transport on the rail service.

According to calculations by Green Markets’ Research Director Alexis Maxwell, the rail service could do a maximum of 120,000 mt of potash a year.

“Given that China bought 1.7 million mt of potash from Belarus in 2021, it would help a bit, but still leaves a big potash transport deficit,” she said.

According to the press document, as cited by the report, the two companies will interact on logistics support in Belarus, customs clearance services, and Belarusian-Chinese railway transportation, and facilitate the cooperation between the customs services of the two countries.

The agreement will help facilitate trade, promote export/import and transit traffic, attract new cargo flows, optimize customs operations, and improve the quality of the transport services, said Beltamozhservice’s First Deputy Director General Yelena Skripchik.

PhosAgro Posts Higher Sales, Output for FY2021

Ammonium Nitrate, Ammonium Sulfate, DAP/MAP, Earnings, News, NPK, NPS, Russia, Urea

PJSC PhosAgro, Moscow, reported that it increased fertilizer production to 10.31 million mt in FY2021, a 3 percent increase over the previous year, while fertilizer sales were also up 3 percent, to 10.26 million mt.

The group cited increased production of DAP/MAP, NPK, and ammonium sulfate as driving the output growth, and high demand in its priority markets as behind the sales growth.

In FY2021, the group increased production of phosphate-based fertilizers by 4 percent year-over-year, to 7.89 million mt. The production of its main fertilizer grades, DAP/MAP and NPK, increased by 14 percent and 9.5 percent, respectively.

PhosAgro attributed the growth to an increase in the production of phosphoric and sulfuric acids, as well as the recovery in ammonia production following the completion of scheduled maintenance at the end of the third quarter.

It attributed the 3 percent year-over-year growth in FY2021 fertilizer sales to the strong demand for fertilizers in the main markets throughout the year against a background of high crop prices, limited production of nitrogen-based fertilizers amid high natural gas prices in Europe, and the impact of decreased fertilizer exports from China.

Sales of phosphate-based fertilizers amounted to 7.76 million tons in FY2021, an increase of 1 percent year-over-year. The group cited “consistently high” demand in its sales markets, such as Russia and Latin America, as well as an increase in MAP production volumes following the launch of a new facility at the group’s Volkhov site.

Sales of nitrogen-based fertilizers increased by more than 9 percent in FY2021 to 2.49 million mt, driven by strong demand for these products in Russia and in global markets amid a decrease in the production of nitrogen-based fertilizers in Europe in late 2021

PhosAgro’s fourth-quarter fertilizers sales were up 21 percent on the year to 2.47 million mt, with the group citing the favorable price trends in the main world markets for phosphate- and nitrogen-based fertilizers, which enabled it to achieve this sales growth.

“Among the external factors that supported our operating performance during the quarter, I would like to highlight the consistently high demand for fertilizers in the Russian market, the increase in demand in the markets of Latin America and Europe, as well as the decrease in export supplies from China,” said PhosAgro CEO Andrey Guryev.

Sales of phosphate-based fertilizers increased by 23 percent year-over-year to 1.9 million mt in 4Q 2021, driven by the launch of new production capacities in Volkhov. This increase was due to both high seasonal demand in Europe and Latin America and higher sales to India, where pent-up demand was met.

Sales in the nitrogen segment increased by 14 percent year-over-year in 4Q 2021, to 566,700 mt. AN saw the biggest increase in sales, driven by both high seasonal demand and the affordability of fertilizers for end users.

Commenting on the market so far in 2022, Guryev said the beginning of the year has seen continued strong demand and high prices for phosphate-based fertilizers in India, while markets for nitrogen-based fertilizers are seeing a price correction in the wake of a busy period of import purchases in most major markets.

PhosAgro Fertilizer Production and Sales

‘000 mt FY2021 FY2020 % Change 4Q-2021 4Q-2020 % change
Production
Phosphate-based fertilizers 7,893.6 7,577.9 +4 2,113,8 1,829.7 +16
Nitrogen-based fertilizers 2,412.1 2,402.3 +0.4 641.5 613.3 +5
Total fertilizers 10,305.7 9,980.2 +3 2,755.3 2,443.0 +13
Sales
Phosphate-based fertilizers            
DAP/MAP 3,564.5 3,203.4 +11 957.8 535.5 +79
NPK 3,011.1 2,924.6 +3 700.2 690.7 +3
NPS 566.8 912.2 (38) 75.6 192.7 (61)
APP 206.3 200.3 +3 56.5 52.2 +8
MCP 405.2 378.6 +7 113.6 83.9 +35
PKS 8.5 49.8 (83) 0 0.3 (100)
Total 7,762.4 7,668.9 +1 1,903.7 1,545.3 +23
Nitrogen-based fertilizers            
AN 798.0 618.6 +29 168.6 150.8 +12
Urea 1,616.3 1,649.0 (2) 362.8 341.0 +6
AS 80.2 18.1 +343 35.3 7.7 +358
Total 2,494.5 2,285.7 +9 566.7 499.5 +14
Total fertilizers 10,256.9 9,954.6 +3 2,470.4 2,044.8 +21

BHP Unification Secures U.K. Court Sanction

Australia, News, News Briefs, United Kingdom

BHP Ltd., Melbourne, reported on Jan. 25 the U.K. Court that day issued the Court Order sanctioning the Plc scheme of arrangement to effect unification.

The Plc Scheme was set to become effective at 9:00 p.m. (GMT) on Jan. 28, after the U.K. Court Order was delivered to the U.K. Registrar of Companies.

BHP on Jan. 20 won shareholder support to unify the group’s corporate dual-listed (DLC) structure under its existing Australian parent company, BHP Group Ltd. (GM Jan. 21, p. 27), a move that could facilitate the mining major’s return to large-scale M&A activity, according to a Bloomberg report (GM Jan. 21, p. 1).

Unification is expected to complete by Jan. 31, 2022 (Melbourne time). To effect unification, Plc Shares and Plc ADSs will be exchanged for Limited Shares and Limited ADSs (respectively) on a one for one basis. BHP Group Ltd. will become the sole parent company of the BHP Group.

Australia’s Agrimin Inks Offtake Deal with Nitron

Australia, News, News Briefs, Northeast, Sulfate of Potash

Junior sulfate of potash (SOP) producer Agrimin Ltd., Nedlands, Western Australia, reported that it has signed a seven-year binding offtake agreement for 115,000 mt/y of SOP from its Mackay Potash Project with Nitron Group LLC for sale and distribution in Latin America, Mexico, the Caribbean and Africa.

The deal with Greenwich, Conn.-based Nitron represents around 25 percent of Agrimin’s planned SOP production capacity of 450,000 mt/y, and is the SOP junior’s second binding offtake agreement. The first, inked in May 2021, was a 10-year deal with Sinochem Fertilizer Macao Ltd for the supply of 150,000 mt/y of SOP for sale and distribution in China (GM May 21, 2021).

Delivery of the SOP under the agreement with Nitron will be a minimum of 1,000 mt container shipment volume per delivery and a minimum of 5,000 mt bulk shipment volume per delivery.

Conditions precedent include Agrimin making a final investment decision to develop the project and the commencement of commercial production by June 30, 2025.

Agrimin is currently advancing the Environmental Impact Assessment (EIA) for the Mackay Potash Project, which is the critical path item to reaching a Final Investment Decision targeted for mid-2022. The final environmental surveys and studies that support the EIA were completed last year.