Israel’s Knesset Finance Committee will likely agree to a three-year extension of ICL’s Rotem Amfert’s phosphate concession in the Negev, according to a report in the Globes. The paper cited a recent payment by ICL of some NIS 23.6 million (US$7.6 million) in recently-assessed back royalties.
The extension had been on hold while the royalties were being calculated. In the past, ICL has indicated that the concession only has reserves for another three years, according to the paper.
Specialty fertilizer producer Verdesian Life Sciences’ subsidiary Cytozyme Laboratories Inc., Salt Lake City, on Dec. 8 pled guilty in Salt Lake County 3rd District Court to two counts of unlawful discharge of pollutants into the lower sewer system (GM Oct. 29, p. 1). According to local KSL.com, the company agreed to pay a $2 million penalty and take measures to ensure the pollution does not happen again. The penalty is one of the largest criminal fines a corporation has faced in Utah history, according to Salt Lake County District Attorney Sim Gill.
The charge will be held in abeyance for three years, and if there are no other violations during that time, the charge will be reduced from a third degree felony to a class A misdemeanor.
Director of Operations Anna Kolliopoulos and Chief Operating Officer and CFO David John Bitter were also charged; however, the Dec. 8 plea did not address their charges, according to KSL.
While Cytozyme reportedly purported to be a “zero discharge” facility, allegations were that significant amounts of toxic and corrosive products were discharged almost daily.
This included illegal levels of copper, zinc, molybdenum, and pH, with copper exceeding the state limit by eight times and zinc 28 times, the charges stated, according to the local reports, which said employees “regularly disposed of between two to ten 300-gallon totes of wastewater using the sewer drain since Cytozyme has occupied the South Salt Lake facility.”
The company has reportedly operated out of the site since 2013, but has been in business some 40 years.
Cary, N.C.-based Verdesian acquired Cytozyme in April (GM April 23, p. 32).
The floodwaters are receding and roads and rail lines are being repaired, but it’s still likely to take weeks for the Port of Vancouver, Canada’s biggest port, to work through its backlog of cargo and vessels after historic rainfall left British Columbia soaked and isolated, according to Bloomberg reports.
Storms dropped enormous volumes of rain on the province in November, forcing evacuations, drowning hundreds of thousands of livestock, and temporarily cutting off Vancouver from the rest of the country by road and rail.
Ever since, the two major freight railways – Canadian National and Canadian Pacific – that carry about two-thirds of the cargo that is transported by land to the Port of Vancouver, have fixed the lines and are working to keep them open. On Dec. 6, CN reported that its train movement had resumed on its Kamloops-to-Vancouver corridor in Western Canada, after another round of heavy rain had caused more delays (GM Dec. 3, p. 1).
They are running again, albeit slowly. The deluge also caused the Trans Mountain Pipeline, the sole oil conduit running from Alberta to the B.C. Coast, to shut down for three weeks. The government imposed emergency fuel rationing on Nov. 19, though that should be lifted soon. A state of emergency remains in the province at least through mid-month.
Data from the Vancouver port’s mobile app show that half of the 88 vessels at port were awaiting berths on Dec. 6, with many anchored on the other side of the Strait of Georgia, along the Vancouver Island Coast.
CF Industries Holdings Inc., Deerfield, Ill., on Dec. 9 announced that it is boosting company guidance for full-year adjusted EBITDA to $2.65-$2.85 billion from earlier estimates of $2.2-$2.4 billion.
CF said it was basing the upgrade on preliminary data through the end of November 2021 and its assessment of continued strong global nitrogen market conditions that have supported higher-than-expected realized pricing for products sold on an index basis.
In addition, CF projects higher-than-expected sales volumes through year-end, driven primarily by favorable weather that has enabled the strongest fall ammonia application season in North America over the last decade.
The Mosaic Co., Tampa, on Dec. 9 announced targets to achieve net-zero greenhouse gas emissions in Florida by 2030 and company-wide by 2040. To achieve these targets, Mosaic will emphasize opportunities to reduce Scope 1 and Scope 2 emissions from its operations.
The company believes this is a critical step in managing its own most pressing physical and transition climate risks – such as the threats of carbon pricing and increasingly severe weather – and as a way to be a good steward of the environment, while contributing to a global sustainable food future.
“Environmental responsibility is a defining issue of our time. Mosaic’s net-zero commitment and clear pathway to achieving it demonstrates one of the ways we are doing our part to limit the impacts of climate change and contribute positively to society,” said Mosaic President and CEO Joc O’Rourke.
Mosaic said its significant landholdings position the company to leverage carbon removal through nature-based solutions. As a result, and factoring in the improvements Mosaic can make to its operations, the company does not intend to pursue carbon offset credits at this time.
These targets are in addition to the wide range of 2025 ESG performance targets set last year, including to reduce company-wide GHG emissions and freshwater use per unit of production by 20 percent. In 2020, Mosaic said it made progress toward both goals, achieving a 10 percent reduction in GHG emissions and an 18 percent reduction in freshwater use per unit of production since the baseline was set in 2020.
Though not represented in a formal target, Mosaic is also addressing its Scope 3 emissions by engaging suppliers, partnering in the development of innovative agricultural technologies, and investing in a pipeline of solutions that could ultimately reduce emissions at the farm level.
The situation with regard to the transhipment of Belarusian potash through Lithuania and the country’s Klaipeda port was confused as the week drew to a close.
State-owned Lithuanian Railways (LTG) – as cited in a Reuters report – said on Dec. 8 it will continue to transport Belarus potash in December and into January, despite the U.S. sanctions on Belaruskali. However, it is unclear if LTG will continue to transport Belarus potash beyond January.
Belarus rails most of its potash for export through Lithuania, into the Lithuanian port of Klaipėda for onward shipment
Sanctions imposed by the U.S. on Aug. 9, which prohibit sales to that nation by Belarus state-owned potash producer Belaruskali, OAO, kicked in on Dec. 8 after a four-month wind-down period (GM Aug. 13, p. 1).
On Dec. 2, the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) announced sanctions on the marketer/exporter of Belaruskali’s potash, Belarusian Potash Co. (BPC), which was not included on the initial U.S. sanctions list (GM Dec. 3, p. 1). Under these latest sanctions, BPC has been given to April 1, 2022, to wind down transactions.
LTG expects to continue transporting Belarus potash despite the U.S. sanctions because they only apply to U.S.-connected entities, the report cited the railway company’s CEO Mantas Bartuska telling a Lithuanian parliamentary hearing on Dec. 8.
The CEO said LTG has a contract with Belaruskali that expires at the end of 2023, and the railways company cannot terminate it.
According to the report, citing Bartuska, while Lithuanian banks will not process Belaruskali payments due to sanctions, Belaruskali paid in advance for rail transportation services through December and into January. The CEO said Lithuania’s Foreign Ministry was notified of the payment.
Lithuania’s Foreign Minister Gabrielius Landsbergis has said he is ready to resign over a decision by the railways company to continue to transport Belarus potash in December despite U.S. sanctions on Belaruskali.
What is unclear at this time is whether LTG will stop transporting all Belaruskali potash once the advance payment is used up, or whether Belaruskali will be able to get further payments to the railways company processed.
The European Union (E.U.) sanctions imposed against the Belarusian regime, which came into force on June 25 (GM June 25, p. 1), restrict imports of Belarusian potash into E.U. countries and a transit ban via E.U. countries, of which Lithuania is one.
Crucially, though, a key grade of Belarusian potash was excluded from the E.U. ban. Potassium chloride with a potassium content evaluated as K2O by weight, exceeding 40 percent but not exceeding 60 percent on the dry anhydrous product, is not included on the sanctions list. Additionally, Belarus’ current supply contracts with India and China – i.e., those concluded before June – are not subject to the Brussels sanctions.
According to the Reuters report, Lithuanian Prime Minister Ingrida Šimonytė told reporters on Dec. 8 that she expects the potash transportation “would not last for long,” without giving further details.
According to a Dec. 9 report by Charter 97, a Belarus pro-democracy and a pro-human rights news site, Lithuanian Transport Minister Marius Skuodis is to ask the country’s National Security Commission to assess the agreement between LTG and Belaruskali.
The Commission will decide whether the agreement is in Lithuania’s national security interests, according to the report.
U.S. sanctions do not cover Lithuania, but – as with E.U. sanctions against the Belarusian regime – many of Belarus’ banks are under sanction, as well as U.S. financial entities being prohibited from doing business connected with Belarusian potash.
According to the Charter 97 report, the further fulfilment of LTG potash transportation obligations will depend on the decisions of the Lithuanian authorities and the position of the banks processing orders for Belaruskali.
According to a Dec. 9 report by the Baltic News Service (BNS), citing Igor Udovickij, the majority shareholder of Klaipėda’s Bulk Cargo Terminal (Birių krovinių terminalas, or BKT), which handles Belaruskali shipments via Lithuania, the transit of Belarusian potash via Lithuania cannot be suspended, as he said “that would run counter to Lithuania’s international agreements.”
Udovickij, who owns a 70 percent stake in BKT, said “there are no, and there cannot be any U.S. sanctions on Belarusian potash transit via Lithuania since transit, as a procedure, cannot be subject to sanctions.” Belaruskali owns the remaining 30 percent stake in the terminal.
According to Udovickij – as cited by the report – all states, including the U.S., are subject to international treaties – the World Trade Organization agreement and the United Nations Convention on the Law of the Sea. They guarantee the freedom of transit for states without sea access.
He said the U.S. and the E.U., having ratified these agreements, cannot violate them.
According to Udovickij, those involved in the transit of potash, including Lithuanian state institutions, have consulted the U.S. Treasury and the European Commission on the application of the sanctions. They were told that Belarusian potash can be transported via Lithuania if payments are made in euros instead of U.S. dollars, according to the report.
If the transit of Belarusian potash via Lithuania were to be halted, Belaruskali/BPC would have to ship through Russia. But as yet, there is no agreement with Moscow on this.
Uralchem JSC, Moscow, said its holding companies, Uralchem Holding Plc and CI-Chemical Invest Ltd., formerly registered in Cyprus, have been re-domiciled to Russia.
Uralchem said the decision to re-register the structures that hold the shares of the Uralchem, JSC, company was made taking into account the role of the company “as a backbone enterprise” of the Russian chemical and fertilizer industry, and with the aim of increasing tax efficiency for the benefit of both the company and the Russian budget.
“Currently, conditions are being created in the Russian jurisdiction for the successful development of legal entities that own production assets,” Uralchem JSC Deputy CEO and CFO Igor Bulantsev said in a statement.
“For the first time in many years we have reached that milestone when the registration of companies in our homeland becomes more attractive than anywhere abroad, not only from the organizational, but also from commercial and taxation points of view,” he said.
As a result of the re-registration, Uralchem Group’s entire asset management chain is located in the Russian Federation. Tax revenues from the group’s former foreign assets will now also go to Russia’s state budget, the company said.
Azomureş Targu Mureș, Romania’s biggest fertilizer producer, said on Dec. 6 it was starting preparations for the temporary shutdown of production due to the “very high prices” for energy, natural gas, and electricity.
The company, which is part of the Swiss trading group Ameropa Holding AG, already had reduced production by half in early October due to soaring natural gas prices.
“The high level of the price being asked by suppliers for the main raw material, methane gas, no longer allows us to sustainably continue [production] activity,” said Azomureş General Manager Harri Kiiski in a Dec. 6 statement, adding that the resumption of activity depends on the methane gas price and its availability on the market.
The producer expects January and February to be “the critical periods” it needs to overcome, though with the uncertain natural gas situation, it said it will remain flexible through all of the first quarter.
The decision will not have any immediate effects on employees, and the company said it will maintain a normal work schedule and will focus on maintenance work and on projects currently underway.
Azomureş has production capacity for around 1.8 million mt/y, according to Ameropa’s website.
It produces granular and prilled ammonium nitrate, granular CAN, granular urea and NPKs, and NPs, and provides about 50 percent of the fertilizers used on Romanian farms, according to the company.
Azomureş’ decision to halt fertilizer production may be supportive for Poland’s Grupa Azoty SA, according to Warsaw-based Bank Pekao SA, as cited by a Bloomberg report. However, Pekao analysts highlighted that the move by Azomureş underlines the seriousness of profitability issues stemming from high natural gas prices.
Pekao analyst Krzysztof Kozieł said another producer decision to halt fertilizer output in Europe may be positive in the mid-term for Azoty given supply-chain disruptions.
However, Kozieł, according to the report, warned it may also show that Azoty’s production faces profitability challenges, and that the Polish fertilizers and chemicals group is entering “terra incognita” with the risk that farmers may not accept much higher prices.
Vienna-based Erste Group Bank AG analysts also see the Azomureş’ production halt as supportive for Azoty among other fertilizer producers in the region, according to Bloomberg.
Hungary’s government is considering all possible steps to rein in rising fertilizer prices, including a price cap similar to the one introduced for the country’s gasoline prices in November, according to a Bloomberg report, citing Hungary’s MTI news agency.
According to the news agency, citing Hungary’s Agriculture State Secretary Zsolt Feldman, no decision has been reached yet.
According to a separate Bloomberg report last week, citing Hungarian Cabinet Minister Gergely Gulyás, the government blames the surging fertilizer prices on alleged cartel activity by the country’s only nitrogen fertilizer producer, Nitrogénművek Zrt., a privately-owned company owned by Szolnok, Hungary-based Bige Holding kft.
Hungary’s government has been stepping up pressure on Nitrogénművek in recent weeks, and has vowed to use “all available tools” against the company to ensure supplies to local farmers.
Agriculture Minister István Nagy has accused the producer of keeping fertilizer prices “artificially” high, and also said the company, which exports half its output, was limiting supply to Hungarian farmers, according to the report.
Nitrogénművek, in a Nov. 25 statement cited by the Bloomberg report, said record prices for fertilizers were due to global market developments, and reiterated that it would continue production for its customers in Hungary and aboard. The company also said an export ban would be illegal under European Union law.
Hungary’s competition authority in October issued an 11 billion forint (approximately $34 million at current exchange rates) file against Nitrogénművek, alleging cartel activity on the part of the company. Nitrogénművek has denied any wrongdoing.
The company’s owner, Laszlo Bige, has alleged the government is trying to wrest control of his company because he is financially supporting the opposition in next year’s parliamentary election.
Nitrogénművek produces CAN, AN, urea, and UAN, as well as ammonia.
Turkey may produce significantly less wheat next year after surging fertilizer prices pushed the country’s farmers to cut their fertilizer use and grow other crops, according to a Bloomberg report this week, citing Turkey’s Dünya newspaper.
Many growers are switching to lentils or chickpeas, as these crops require less fertilizer than wheat, the newspaper reported, citing farmers and agricultural organizations.
Turkey typically plants its winter-wheat crop in October and November. In the country’s Diyarbakir and Mardin provinces, fertilizer use has been cut by as much as half following a more than five-fold rise in prices over the past year, Dünya reported.
Wheat production is expected to fall by 14 percent to 17.7 million mt this year, according to an October estimate by the Turkish Statistical Institute, cited by the report.
