All posts by mickeybarb@charter.net

Mosaic Investigating Seismic Activity at New Wales Phosphogypsum Stack

Featured, Florida, News

The Florida Department of Environmental Protection (FDEP) reported that “multiple acoustic detections” were indicated by a seismic monitoring system at The Mosaic Co.’s New Wales South Phosphogypsum Stack from Oct. 8-18. The system was required as part of the permit requirements for the facility to provide early detection of any potential geologic changes in subsurface conditions at the site.

According to an Oct. 21 letter from FDEP to Mosaic, FDEP concluded that the information provided “indicates the presence of a subsurface condition that has the potential to adversely affect the integrity of the phosphogypsum stack.” FDEP advised Mosaic that authorization to commence phosphogypsum stacking operations in the Phase II East area cannot be provided without knowledge of whether there are any new subsurface features that may require further exploration to determine whether stabilization is needed.

FDEP outlined that Mosaic is to provide daily reports of its investigation and emphasized that follow-up exploratory drilling, along with any additional steps needed to further investigate this subsurface condition, must be completed as expeditiously as possible.

FDEP told Green Markets that it and the State Geologist are reviewing the non-routine report notification and information provided by Mosaic, and that at this time there is no indication that a sinkhole has occurred or that there are any concerns with the structural integrity of the phosphogypsum stack system at the site.

However, it said the seismic results have indicated subsurface activity was detected that warrants further investigation to determine whether Mosaic is required to implement preventative or remedial actions to protect the integrity of the phosphogypsum stack to ensure protection of water resources.

Mosaic had not responded to inquiries at press time.

FDEP noted that after completing the remedial repairs related to the 2016 sinkhole at the New Wales facility (GM Sept. 16, 2016; May 25, 2018) under the Consent Order issued on Oct. 24, 2016, Mosaic was required to evaluate and implement technologies to investigate the subsurface beneath the South Phosphogypsum Stack at New Wales.

That review led to the identification of a technology that Mosaic is now using for ongoing monitoring of any potential subsurface activity beneath the South Phosphogypsum stack. The monitoring and reporting are intended to be one part of an early detection system for subsurface activity at the site.

Further, this monitoring system allows Mosaic to identify any potential unknowns and take proactive measures to maintain safe operations before a significant subsurface incident can develop and impact the facility.

Total costs to repair Mosaic’s 2016 sinkhole have been reported as over $80 million (GM Aug. 3, 2018). The sinkhole was sealed in 2018.

Earlier this year, FDEP allowed an emergency release of wastewater from Mosaic’s Piney Point phosphogypsum stack into Piney Point Creek, which leads into Tampa Bay, after there were fears that the leaking stack would collapse (GM April 2, 2021). Local residents were evacuated as a precaution.

Verdesian Subsidiary, Execs Charged with Unlawful Discharge of Pollutants

Featured, News, Specialty

Specialty fertilizer producer Verdesian Life Sciences’ subsidiary Cytozyme Laboratories Inc., Salt Lake City, and two of its executives – Director of Operations Anna Kolliopoulos and Chief Operating Officer and CFO David John Bitter – have been charged with a third-degree felony for allegedly unlawful discharge of pollutants into the sewer system, according to local media outlets Salt Lake Tribune and KSL.com. Salt Lake County prosecutors charged the company with two counts and the executives with one in 3rd District Court of violating Utah’s water quality act.

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 state, 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). At the time, Verdesian said it had been working with the company for three years as it partnered on Crop+, Seed+ and Seed+ Graphite technologies. Cytozyme’s website said it focuses on the activation of a plant’s metabolic pathways, crop responses to stress, control of reactive oxygen species, gene upregulation, and enhancement of nutrient uptake. The website also stated that “only advanced science and unwavering ethics can feed a growing planet.”

Neither Verdesian or Cytozyme had responded to inquiries at press time.

Centrex Inks Phosphate Offtake with Samsung

Australia, India, Indonesia, Japan, Mexico, News, News Briefs, Phosphate Rock, South Korea

Junior phosphate rock miner Centrex Metals Ltd., Adelaide, South Australia, on Oct. 21 announced that its 100 percent-owned subsidiary, Agriflex Pty Ltd., has executed a conditional term sheet with Samsung C&T Corp. for the offtake of phosphate from the company’s planned 800,000 mt/y Ardmore Phosphate Rock Project in northwest Queensland (GM June 7, 2019). Samsung would be the sole and exclusive marketing representative for sales into Korea, Japan, Indonesia, India, and Mexico.

The initial term of the term sheet is three years of production. Marketing services would be for the lesser of 20 percent of the product from the project or 160,000 mt of product. In addition, Samsung may also assist the company with sales of any additional quantity that it does not take. The price to be paid by Samsung will be market netback price defined as the actual sales price minus direct costs and marketing service fee.

The conditions precedent for the agreement include Agriflex’s final Board approval to proceed with the construction of the plant; Samsung’s internal corporate approvals; Agriflex’s financial close in relation to the financing arrangements for the project; and the actual commencement of production from the plant.

Big Gains Expected for Nutrien, Mosaic, CF in 3Q Results After Year-Ago Losses

Eastern Cornbelt, Featured, News, Saskatchewan, Tampa

What a difference a year makes. This time last year, major fertilizer producers Nutrien Ltd., Saskatoon, The Mosaic Co., Tampa, and CF Industries Holdings Inc., Deerfield, Ill., were all in the loss column for third-quarter 2020 (GM Nov. 6, 2020). For third-quarter 2021, all three, spurred on by skyrocketing fertilizer prices, are expected to move far into the black according to the Bloomberg Consensus, the average calculation from major analysts.

Nutrien, which posted a year-ago loss of $587 million, mainly due to a non-cash impairment of $823 million primarily attributable to its phosphate business, is expected to have a third-quarter net income of $664.7 million and adjusted EBITDA of $1.53 billion, according to the projection.

Mosaic is expected to have net income of $634.7 million versus a year-ago loss of $6.2 million, while CF’s projection is for $238.4 million in net income, up from a loss of $28 million.

CF stated on Sept. 24 that in light of the recent developments affecting its U.K. operations (GM Sept. 17, p. 1), it was evaluating whether an impairment charge with respect to its business in the U.K. may be required. As of June 30, 2021, CF’s investment in that business was approximately $850 million. This includes property, plant, and equipment of approximately $590 million, and goodwill and other intangible assets of approximately $370 million. The operations accounted for approximately 2 percent of CF’s consolidated gross margin for the year ended Dec. 31, 2020.

On Sept. 15, CF announced the halt of operations at both its Billingham and Ince manufacturing complexes in the U.K. due to high natural gas prices, though Billingham ammonia production has since resumed. The average daily market price of natural gas at the National Balancing Point (NBP), the major natural gas trading point for the U.K. during the period from Sept. 1-20, 2021, was $19.79/mmBtu, representing a more-than-500 percent increase over the $3.20/mmBtu average daily market price of natural gas at NBP for the full year 2020.

Nutrien and Mosaic are expected to release results after markets close on Monday, Nov. 1, while the CF release will be on Nov. 3.

Nutrien Estimated 3Q-2021 Actual 3Q-2020
Adjusted EBITDA $1.53 billion $670 million
Net Income $664.7 million ($587 million)
Revenues $5.6 billion $4.2 billion
Mosaic Estimated 3Q-2021 Actual 3Q-2020
Adjusted EBITDA $1.06 billion $438 million
Net Income $634.7 million ($6.2 million)
Revenues $3.7 billion $2.38 billion
CF Industries Estimated 3Q-2021 Actual 3Q-2020
Adjusted EBITDA $489.6 million $204 million
Net Income $238.4 million ($28 million)
Revenues $1.39 billion $847 million

European Gas Prices Fall as Russia Signals Increased Supplies

Europe, Featured, News, Russia

Natural gas prices in Europe declined since midweek following Russian President Vladimir Putin’s order to Russian state-run gas producer Gazprom PJSC to start refilling European gas storage facilities next month, a measure that should ease pressure on the European gas market. Gazprom is Europe’s biggest gas supplier.

Signs that Russia’s Nord Stream 2 pipeline is nearing certification in Germany also contributed to gas price easing.

Putin told Gazprom to focus on filling underground storage in Germany and Austria starting Nov. 8, a day after the gas supplier completes filling domestic storage facilities, according to a Bloomberg report on Oct. 27.

All gas storage sites in Germany – Europe’s biggest market, and where Gazprom has several storage facilities – are about 71 percent full, according to the report, citing Gas Infrastructure Europe data. Gas storage inventories across Europe as a whole are at their lowest seasonal level in almost a decade.

Current benchmark gas prices in Europe have surged repeatedly to record levels in recent weeks, forcing several major nitrogen fertilizer producers to curtail their European ammonia production – and in some cases, their downstream production.

The falling gas prices cannot come soon enough for the European nitrogen industry. The high prices idled production and jolted fertilizer prices, which had already seen significant across the board increases this year. “Unless agriculture prices rally significantly, nutrient demand destruction is certain at these price levels,” said Alexis Maxwell, Green Markets Director of Research. “Farmers should transition management from chasing yields to chasing the dollar.”

The benchmark European gas futures – the Dutch TTF gas futures front-month contract (November) – were trading at €75.3 a megawatt-hour at 3:59 p.m. (GMT) on Oct. 28, down from about  €88 a megawatt-hour on Oct. 26, or about $1,150 per thousand cubic meters.

The benchmark European futures price had reached as high as €162 a megawatt-hour earlier this month, or about $2,000 per thousand cubic meters, according to Bloomberg.

Europe’s gas rally also had eased mid month on Putin’s first indication of possible increased Russian gas supplies to the region (GM Oct. 15, p. 31), but gas prices subsequently increased again.

Russia wants natural gas prices in Europe to come down by about 60 percent in the longer term as a prolonged rally will destroy demand for Gazprom’s supplies, Bloomberg reported, citing two unnamed officials with knowledge of the country’s energy policy.

Gazprom last year supplied nearly a third of all natural gas consumed in Europe. But its exports to Europe have been lower year-over year since late August, with some European officials blaming the Russian gas producer for contributing to the continent’s current energy crisis

Russia wants prices in Europe to be about $300-$400 per thousand cubic meters, the so-called “sweet spot” it believes would help the Russian state gas supplier to keep its grip on Europe’s market. Bloomberg cited another Russian official as putting the desired price range at $200-$400 per thousand cubic meters, with prices at the low end of that range being a less acceptable scenario.

Gazprom at the start of this week reported that it was maintaining its 2021 forecast of exports to Europe and Turkey at 183 billion cubic meters, Russia’s Prime Business news agency reported, citing the head of the export branch of Gazprom Export, Yelena Burmistrova, as quoted by the company’s corporate magazine. The supplies to Turkey are planned at 24-25 billion cubic meters in 2021.

Meanwhile, Bloomberg reported Germany’s Economy Ministry said late Oct. 27 certification of the Nord Stream 2 pipeline from Russia would not pose any risks to security of supply, bringing the project that is seen as boosting Europe’s gas supplies this winter a step closer to final approvals. The regulator has until early January to make a preliminary decision.

Ma’aden Returns to Profit

Earnings, News, News Briefs, Saudi Arabia

Saudi Arabia Mining Co. (Ma’aden), Riyadh, returned to the black, reporting a net profit after Zakat and tax of SAR3.14 billion (approximately $836.2 million at current exchange rates) for the nine months to Sept. 30, 2021, versus a year-ago net loss of SAR0.78 billion, according to an Oct. 25 company filing to the Saudi stock exchange.

The company made a profit per share of SAR2.55 for the current reporting period against a SAR0.63 loss per share in the same period last year. Ma’aden said the prior-year results were impacted as the COVID-19 pandemic affected industrial output and economies.

Nine-month revenues jumped 40 percent to SAR18.25 billion, up from SAR13.03 billion a year ago.

Ma’aden cited higher average sales prices for all of its products except gold, as well as a higher share of the net profit of its joint ventures and increased income from other sources as behind the rebound. Lower costs also contributed.

However, the company noted that these increases were partially offset by lower fertilizer and ammonia sales volumes except for sales by the Mauritius-based fertilizer distribution group, Meridian, where sales volumes increased.

Ma’aden completed the acquisition of an 85 percent stake in Meridian in September 2019, marking its first international acquisition (GM Sept. 6, 2019). Meridian is providing the Saudi company with a network of operations across southern Africa from Malawi to Mozambique, Zimbabwe, and Zambia, as well as a 2019 distribution volume of approximately 500,000 mt/y of fertilizers and 3,000 staff (GM April 19, 2019).

For the third quarter, Ma’aden posted a big jump in net profit after Zakat and tax to SAR1.27 billion, up from the year-earlier SAR6.47 million. Quarterly revenues increased by 44 percent on the year, reaching SAR6.7 billion versus the year-ago SAR4.66 billion.

K+S Raises FY2021 EBITDA Guidance; REKS Transaction Delayed

Earnings, Germany, News

K+S Group, Kassel, has raised its outlook for operating EBITDA for full-year 2021 to around €630 million (approximately $731 million at current exchange rates), citing a further improvement in expectations for the development of average prices in the Agriculture customer segment as mainly behind the guidance raise. Previous guidance was €500 million to €600 million.

The forecasts exclude the expected one-off gain of about €200 million from the REKs joint venture waste management transaction.

However, K+S disclosed in its statement on Oct. 26 that the antitrust clearance for the transaction may not be granted in 2021, as previously assumed. The company said the E.U. Commission has referred the antitrust clearance procedure to the Federal Cartel Office, and the review of the REKS transaction is still ongoing.

K+S said it continues to believe a release can be granted.

The completion of the antitrust review of the REKS jv originally had been expected to take place this past summer, but in August K+S said it was expected to be delayed until the fourth quarter of the year (GM Aug. 6, p. 33).

K+S and Germany’s Remex GmbH reached an agreement in December 2020 to partner up to bundle their respective waste management activities in a new jv, REKS GmbH & Co. KG, in which both companies would be equal partners, each with 50 percent participation (GM Dec. 31, 2020).

As a result of the expected completion of the REKS transaction now delayed into 2022, only K+S’ operating business is now included in the FY 2021 EBITDA guidance. The company’s previous guidance – issued on Aug. 3 – for full-year EBITDA from continuing operations of between €700-€800 million included the expected one-off gain from the REKS transaction.

K+S in this week’s statement said it now expects free cash flow in FY2021 to break even. Previously, it had expected a negative €180 million, excluding the REKS cash inflow.

The company’s shares closed 5.2 percent lower on Oct. 26 after the company disclosed the antitrust clearance for its REKS transaction may not be granted in 2021. But its shares subsequently bounced back this week as the market digested the guidance raise.

Paris-based Franco-German financial services group Oddo BHF noted that K+S’ new guidance “is ahead of its clean estimate,” which excludes gains from the REKS jv, Bloomberg reported. Oddo anticipates that 2022 will include the “lion’s share” of the recent surge in potash prices on the bottom line for K+S.

UBS sees the free cash flow as the main positive from the update, with guidance well ahead of the broker’s expectations, according to the Bloomberg report.

K+S will publish its third-quarter financial results and full-year outlook for 2021 on Nov. 11.

Next Gen Fertilizer Innovations Challenges – Management Brief

Management Briefs

The recent winners of the Next Gen Fertilizer Innovations Challenges, a joint EPA-USDA partnership and competition to advance agricultural sustainability in the U.S. include:

Tier 1 Winners ($17,500 prize):

  • Taylor Pursell, Pursell Agri-Tech, for their submission on “Urea 2.0,” which replaces the conventional urea core with a customizable mixture of inhibitors, micronutrients, and/or biological materials to provide fertilizers tailored to local needs.
  • Dr. Christopher Hendrickson, Aqua-Yield, for their submission on a nano-smart-fertilizer based on silica nano particles that carry fertilizer cargo and dissolve into soil minerals and release fertilizers upon contact with root exudates.

Tier 2 Winners ($10,000 prize):

  • Dr. Catherine Roue, Fertinagro Biotech International/Agraux Solutions International, for their submission on the “Phosphate Liberation Booster” technology, which uses concentrated root exudates from P-starved plants to enable the application of less fertilizer P and more widely available P sources.
  • Dr. Kuide Qin, Verdesian Life Sciences, for their submission on using innovative eutectic mixture technologies to dramatically improve the performance of an industry standard nitrapyrin for greater longevity, less nitrate leaching, and no evidence of corrosion of farm equipment in field trials and lab simulated tests.  
  • Chandrika Varadachari, Raman Centre for Applied and Interdisciplinary Sciences/ AgTec Innovations Inc., for their submission on “Smart-N,” a smart-fertilizer that releases nutrient on-demand by the crop and is made up of short-chain polyphosphates linked with Ca to create a “cage” for urea, which dissolves into plant nutrients (i.e., N, P, and Ca) when it comes into contact with root exudates.

Tier 3 Winners (Honorable Mention – no cash prize):

  • Dr. Jaroslav Nisler, Institute of Experimental Botany, The Czech Academy of Sciences, for his submission on derivatives of the synthetic plant growth hormone MTU, which inhibit the breakdown of Photosystem II, causing longer periods of growth, protection from stress, larger plants, and potentially less nutrient loss per unit of fertilizer applied.
  • Dr. Leanne Gilbertson, Department of Civil and Environmental Engineering, University of Pittsburgh, for her team’s submission on liposome carriers for fertilizers, which create a “protected fertilizer package” rather than a conventional solid coated fertilizer, to carry nutrients through soil pores to the rhizosphere where the liposome destabilizes due to changes in rhizosphere conditions releasing the fertilizer cargo.
  • Dr. Robert Neidermyer, Holganix LLC, for their submission on “Bio 800+” a microbial inoculant that harnesses the power of over 800 species of soil microbes, kelp, and other soil amending ingredients to promote greater crop production and plant health.
  • Paul Mullins, Brandon Products Ltd., for their submission on “BBS-1,” a biostimulant derived from seaweed extract that is applied as a coating to standard granular fertilizer that upregulates gene expression for N uptake proteins in root cells when in the rhizosphere.

Sasol Leads Feasibility Study on Green Hydrogen, Ammonia Export Hub

Africa, Ammonia, Green Hydrogen, News, News Briefs

Johannesburg-based Sasol Ltd. is leading a feasibility study to explore the potential for the proposed Boegoebaai green hydrogen development in South Africa to be an export hub for green hydrogen and ammonia.

The Boegoebaai development is located in the Namakwa Special Economic Zone in South Africa’s Northern Cape Province and recently was designated a Strategic Integrated Project in the country’s National Development Plan.

Sasol has signed a Memorandum of Agreement (MOA) with the Northern Cape Development Agency to lead the feasibility study, which is expected to take 24 months.

In parallel, the company said it has partnered with the country’s Industrial Development Corp. (IDC), which will provide joint funding for the feasibility study.

Sasol has also inked a MOA with the Gauteng Provincial Government to leverage Special Economic Zones that have been earmarked as enablers to unlocking South Africa’s green hydrogen market potential for domestic use, such as mobility and aviation.

The outcome of the feasibility study will determine the next step of the development, the company said.

Fertiglobe Starts Trading on ADX Post IPO

ADNOC - Abu Dhabi, Europe, News, News Briefs

Fertiglobe, the Middle Eastern fertilizer joint venture partnership between OCI NV, Amsterdam, and Abu Dhabi’s state-energy company, ADNOC, listed on the Abu Dhabi Securities Exchange (ADX) on Oct. 27, becoming the first free zone company to be traded on an onshore stock exchange in the U.A.E. and the third-largest ever listing on the ADX.

The initial public offering (IPO) raised over $795 million (GM Oct. 22, p. 34).

Fertiglobe’s shares began trading at AED2.55, implying a market capitalization for the company of $5.8 billion at the time of listing, OCI said in an Oct. 27 statement.

Its shares jumped as high as AED3.06 on the first day of trading, giving the company a market value of $6.9 billion, U.A.E.’s The National reported.

Fertiglobe’s trading ticker is “Fertiglobe” and the International Securities Identification Numbering (Isin) code is “AEF000901015.”

It is the largest nitrogen fertilizer producer in the MENA region by production capacity, with 6.6 million mt/y of sellable volume capacity, according to OCI. It has 4.4 million mt/y of gross ammonia production capacity and 5.1 million mt/y of urea production capacity, as well as 0.5 million mt/y of DEF production capacity (DEF production capacity is not included in the 6.6 million mt/y of sellable volume capacity on account of maximum downstream capacities cannot be achieved at the same time).

As previously announced, Fertiglobe expects to distribute dividends of “at least $200 million” for the second half of FY2021, payable in April 2022, and “at least $400 million” for FY 2022 (GM Oct. 15, p. 29).

After the listing OCI is calculated to own around half of the jv company’s shares, versus the previous 58 percent stake. ADNOC now indirectly owns a 36.2 percent interest, down from its pre-listing of 42 percent.