All posts by mickeybarb@charter.net

Political Moderation in Peru Could Be Good News for Mosaic

News, News Briefs, Peru, Phosphate Rock, Tampa

Peru’s overseas bonds rallied the most in a year after President Pedro Castillo replaced a far-left prime minister with a more conventional choice in a bid to improve his administration’s relations with lawmakers and foreign investors, according to a Bloomberg report Oct. 7. Former Head of Congress Mirtha Vasquez was sworn in as Prime Minister, replacing Guido Bellido, a far-left member of Castillo’s left-leaning government who created turmoil last month by threatening to nationalize Peru’s biggest gas field.

President Castillo is keen on building a U.S. $800 million fertilizer plant in the country to help end the country’s dependence on imports. Negotiations with phosphate rock concessionaire Miski Mayo, which is controlled by The Mosaic Co., Tampa, will be central to those efforts, according to a recent report by BNAmericas. Mosaic did not respond to inquiries last week.

Investors are cheering signs that Castillo is seeking a conciliatory approach after the more radical members of his cabinet created fissures with conservative members of Congress and cast doubt on the country’s commitment to foreign investment, according to Bloomberg. Bellido’s exit marks the second high-profile departure from Castillo’s cabinet just a bit more than two months into his presidency as he signals a pragmatic, consensus-building approach in dealings with the energy sector and other industries critical to the economy.

“This is another affirmation of a more pragmatic approach to policy,” said Edwin Gutierrez, the Head of Emerging Market Sovereign Debt at Aberdeen Asset Management in London. For the time being, the cabinet reshuffle is a strong enough signal that Peru will remain a safe place to invest in Latin America, he added.

Castillo named six other new cabinet members, including ministers of mining, work, and interior. Finance Minister Pedro Francke, who is popular with investors, will stay on in the role.

“The changes seem designed to provide more tranquility to the markets,” said Jose Alejandro Godoy, a Professor of Social and Political Sciences at Pacifico University. “We will have a cabinet that engages in more debate, is more open to discussion, closer to a more moderate left.”

New Prime Minister Vasquez, 46, represents the Frente Amplio, or Broad Front coalition, which includes socialists, environmentalists, and center-left politicians

Castillo said the moves would improve “governability” adding that it was time to put Peru’s interests above ideology.

However, there is a risk that Castillo’s moves will rupture relations with his own socialist Peru Libre party, potentially imperiling his agenda in Congress. Waldemar Cerron, a Peru Libre congressman, described the new cabinet appointments as an act of treachery.

“Peru Libre members of Congress don’t support this cabinet, because we consider it to be a betrayal of all the majorities that have waited for many years to come to power,” he told reporters in Lima.

The Andersons Expands Feed Business with Purchase of Capstone Commodities

News, News Briefs

The Andersons Inc., Maumee, Ohio, announced on Oct. 1 that it has purchased Capstone Commodities LLC, Round Rock, Texas. Capstone specializes in providing feed ingredients to dairies and feed mills, feed yards, and exporters, predominantly within the southwestern U.S.

“We are excited to expand our feed ingredient portfolio and geographic footprint in the Southwest,” said Eric Watts, Vice President, The Andersons Trade and Processing. “As a trusted partner in the feed ingredient industry for many years, we are eager to offer greater options to our feed customers.”

The Andersons said the acquisition further supports its strategy to expand in its core grain and fertilizer businesses, including commodity merchandising, and its vision to become the most nimble and innovative North American ag supply chain company.

“Having worked with The Andersons for many years, I look forward to being part of the larger organization,” said Mike Rickert, Capstone President. “This team of employees, which is among the most skilled and experienced in the industry, has been critical to our success. The market knowledge of the expanded team provides tremendous value to our customers and opens up opportunity across the trade region. I look forward to a bright future with The Andersons.”

Capstone will continue under the Capstone name as a wholly-owned subsidiary of The Andersons.

Yara, JERA, Idemitsu Ink MOU on Clean Ammonia Distribution, Bunkering

Europe, Japan, News, News Briefs

Yara International ASA, Oslo, Japanese power generation company JERA Co. Inc., and petroleum supplier Idemitsu Kosan, have signed a Memorandum of Understanding (MOU) to explore the establishment of a domestic clean ammonia distribution network and bunkering business.

JERA and Yara announced a collaboration to decarbonize power production in Japan in May 2021 (GM May 14, p. 1). They said expanding this collaboration to include Idemitsu Kosan brings an extensive distribution network for petroleum products, bunkering capabilities, and import terminals.

In late September, Yara signed an MOU with Japanese power generator Kyushu Electric Power Co. Inc. (Kyushu), to collaborate on establishing clean ammonia supply chains in Japan to reduce CO2 emission at Kyushu’s thermal power generation in Kyushu Area, Japan.

Bion to Develop Demo Beef/Fertilizer Facility

News, News Briefs

Bion Environmental Technologies Inc., New York City, a developer of livestock waste treatment technology, recently announced that it has executed a lease for a site near Fair Oaks, Ind., where it will develop a sustainable and/or organic grain-finished beef production facility that will include its first third-generation waste treatment technology (3G Tech) platform at commercial scale, which will produce fertilizer.

The facility will be designed to feed approximately 300 head of beef cattle in state-of-the-art covered barns that can be re-configured to house swine when appropriate. Bion’s 3G-Tech system will be sized with the capacity to treat the waste from approximately 1,500 head – large enough to demonstrate engineering commercial scale, but small enough that it can be constructed and commissioned quickly. Bion anticipates startup sometime in the Spring of 2022.

Bion said the facility will demonstrate scalability and determine biogas and nitrogen recovery efficiencies at scale. The facility is anticipated to produce sufficient ammonium bicarbonate for both commercial testing by potential joint venture partners and university growth trials. The platform will generate operating data to support certification requirements for various private and regulatory agencies, such as USDA’s Process Verified Program (PVP) for a USDA-certified sustainable brand. The facility will also produce sustainable beef products – conventional and organic – for initial test-marketing efforts.

Maire Tecnimont, Greenfield Nitrogen Eye Green Ammonia Plant for Iowa

Europe, Featured, Green Ammonia, News, Western Cornbelt

Maire Tecnimont SpA, Milan, recently announced that its subsidiaries – NextChem, MET Development, and Stamicarbon – have reached an agreement with Greenfield Nitrogen LLC, Garner, Iowa, to develop the first dedicated green ammonia plant in the U.S. Midwest. The 240 mt/d, 83,000 mt/y plant and storage facility would be located near Garner, Iowa, and is expected to save over 166,000 mt/y of CO2 emissions.

“This partnership represents a collaboration of strengths,” said Linda Thrasher, Greenfield Nitrogen President. “As a development partner, Maire Tecnimont and its subsidiaries bring decades of expertise in successfully designing and executing nitrogen projects, as well as creating new technology, including state-of-the-art zero-carbon facilities. Greenfield’s development expertise, operational experience, and market knowledge align well and position both companies to play a critical role in meeting the world’s decarbonization goals.”

“We are intending to break ground in mid-2022,” Thrasher told Green Markets. “We are completing our feasibility study along with the final engineering with Maire Tecnimont and Stamicarbon. Simultaneously, we are securing financing.”

“Given the facility will be located in Iowa, we have access to abundant wind and solar,” she added. “Our site also has the ability to reach agriculture markets, the transportation sector, and industrial users.”

“Our Garner plant and storage facility will leverage both the abundant supply of renewable energy as well as the strong ammonia market,” she said. “What makes this project unique is that we have the ability to build an entirely zero carbon facility and not be encumbered with carbon intense legacy assets.”

“We are very pleased that Greenfield Nitrogen has chosen Maire Tecnimont as their partner of choice for this exciting project,” said Maire Tecnimont CEO Pierroberto Folgiero. “The combination of co-developer, technology provider, and EPC contractor makes Maire Tecnimont a unique player in the green ammonia market, an area that will be vital to industrialize the ongoing energy transition through green hydrogen. …Thanks to Greenfield Nitrogen’s experience and local presence, we expect this first project to pave the way for other green industrial initiatives to come.”

NextChem will start a feasibility study for the project, utilizing renewable energy as feedstock via the intermediate production of green hydrogen. MET Development will assist Greenfield Nitrogen in the development of the project. The companies said the plant will be designed utilizing the best available technologies for the green hydrogen production together with the ammonia technology that will be provided by Stamicarbon, which earlier this year launched its new STAMI Green Ammonia technology.

The project is the first of a series of green ammonia facilities that Greenfield Nitrogen is interested to strategically developing in the U.S. Cornbelt.

This is not Greenfield Nitrogen’s first proposal to build an ammonia plant. In 2018, Greenfield Nitrogen proposed a $220 million, 128,815/st ammonia plant for Garner, Iowa, that would serve a 100-mile radius (GM Feb. 23, 2018). The company sought funding from farmers, individual investors, and agricultural retailers.

Thrasher is a fertilizer industry veteran, having spent a seven-year stint (2004-2011) at The Mosaic Co., where she was Vice President, Public Affairs. She was also with Cargill Inc. for a ten-year span (1994-2004), where she served as Director, Public Policy. She holds a law degree from William Mitchell College of Law and is a native of northern Iowa.

OCI, ADNOC Proceed With Fertiglobe IPO

ADNOC - Abu Dhabi, Europe, Featured, News

OCI NV, Amsterdam, and Abu Dhabi National Oil Co. (ADNOC) and their Middle Eastern Fertiglobe plc joint venture said on Oct. 4 they intend to proceed with an initial public offering (IPO) of Fertiglobe and to list the jv’s shares on the Abu Dhabi Securities Exchange.

The companies plan to collectively offer 13.8 percent of Fertiglobe’s issued share capital in the offering. OCI said it intends to indirectly continue to own more than 50 percent of Fertiglobe’s share capital post-IPO, while Abu Dhabi state-owned ADNOC is expected to indirectly own at least 36.2 percent.

OCI, which is backed by Egyptian billionaire Nassef Sawiris, currently owns a 58 percent stake, while ADNOC has a 42 percent holding.

Fertiglobe could be valued at about $7 billion including debt, Bloomberg reported in April. That would make the share sale, expected to be completed this month, one of the largest in the emirate to date. The launch of Fertiglobe’s IPO follows the very recent and successful $1.1 billion IPO of ADNOC Drilling on the Abu Dhabi Securities Exchange.

OCI confirmed back in April that the company and ADNOC were considering a potential IPO of Fertiglobe (GM April 16, p. 1), and in early May said preparations had begun for the offering, following board approvals (GM May 7, p. 43). OCI, though, emphasized that market conditions would dictate whether the potential IPO would go ahead (GM Aug. 6, p. 36; Sept. 17, p. 28).

OCI sees the IPO as helping “crystallize” the value of Fertiglobe’s underlying business going forward.

“The IPO and listing will position Fertiglobe and will enhance its visibility as a pure play nitrogen company with a unique position to capitalize on new demand for low-carbon ammonia as a hydrogen carrier and clean fuel,” OCI said.

The IPO could benefit from the rebound in fertilizers prices, which have jumped in the past year as a rally in crop prices amid a broader commodities’ rally helped farmers boost purchases of the nutrient.

More recently, soaring natural gas prices in Europe have forced some fertilizer companies, including Yara International ASA, CF Industries Holdings, Borealis AG, and Lithuania’s Achema, among others, to curtail some ammonia output in recent weeks.

But Fertiglobe has locked in cheap gas supplies through long-term contracts, OCI CEO Ahmed El-Hoshy told Bloomberg in an interview this week.

Fertiglobe’s natural gas costs will probably average $2.8/mmBtu until the end of 2021, and roughly $3/mmBtu for 2022, with gas supply contracts ranging from seven to 23 years, according to the report, citing OCI statements

El-Hoshy believes gas prices “could stay quite elevated” as winter starts in the northern hemisphere, and that is enabling Fertiglobe to increase sales in Europe, Bloomberg reported.

Sultan Ahmed Al Jaber, ADNOC Managing Director and Group CEO, Fertiglobe Chairman, and also UAE Minister of Industry and Advanced Technology, said like OCI, ADNOC will remain “a long-term and committed major shareholder” in Fertiglobe and will continue to partner with the company on emerging opportunities, including the development of a new blue ammonia project at Ta’ziz in Ruwais (GM June 25, p. 33).

ADNOC is increasingly seeking to raise money from its assets and help the government fund efforts to diversify the economy.

Fertiglobe is the largest export-focused nitrogen fertilizer platform globally and the largest producer in the MENA region, with a production capacity of 5 million mt/y of urea and 1.5 million mt/y of merchant ammonia, according to OCI and ADNOC.

The jv was established by the two companies in September 2019, and combined ADNOC’s fertilizer business into OCI’s Middle East and North Africa (MENA) nitrogen fertilizer platform (GM Oct. 4, 2019).

Fertiglobe generated revenues of $1.55 billion in FY2020, and $1.26 billion in the first six months of 2021, according to OCI’s financial statements (GM Aug. 6, p. 30). The jv posted a FY2020 EBITDA of $461.1 million and $537.2 million in first-half 2021.

Fertiglobe said last month it was in process of closing a $1.1 billion bridge financing facility as part of a capital structure reset to refinance debt and pay dividends to OCI and ADNOC (GM Sept. 24, p. 31). It said it plans to pay at least $150 million in dividends for the second half of 2021 and is targeting at least $315 million of dividends for 2022.

Fertiglobe product sales volumes

‘000 mt 1H-2021 1H-2020 FY2020
Own product      
Ammonia 734 495 896
Urea 2,209 2,232 4,565
Total own product sold 2,943 2,726 5,460
       
Traded third party      
Ammonia 64 51 130
Urea 458 270 563
Total traded third-party products 522 322 693
Total own product and traded third party 3,465 3,048 6,154

Kalium Lakes Becomes Australia’s First SOP Producer

Australia, Featured, News, Specialty, Sulfate of Potash

Australian sulfate of potash (SOP) junior Kalium Lakes Ltd. has become the country’s first SOP producer, producing its first batch of SOP on Oct. 4 during the product commissioning process at its Beyondie SOP project located 160 km southeast of Newman, in Western Australia.

The Balcatta, Western Australia-based company said this first batch of standard grade SOP achieved “the required product specification,” and product commissioning will continue until Ebtec – a partnership between Germany’s K-UTEC, the process plant’s designers, and Ebner – completes its performance test.

Kalium said commercial production ramp-up to nameplate capacity of 90,000 mt/y remains on track to be achieved in March 2022, while the first granular SOP product is expected to be produced in December.

Meanwhile, the first SOP sales to Germany’s K+S Group are scheduled for later this quarter. The Australian junior has a binding 10-year offtake agreement for Beyondie SOP with K+S for the purchase of up to 90,000 mt/y (GM March 29, 2019).

All of the SOP fertilizer currently used in Australia is imported, and Germany’s K+S supplies around 60 percent of the import volume.

Beyondie SOP will be trucked to Perth for collection by end-users on Australia’s West Coast, or taken to port for distribution to the East Coast of Australia and New Zealand. Kalium said excess product will be shipped to South East Asian markets.

The SOP junior said the total project cost remains in line with the revised May 2020 capital expenditure budget of A$280 million (approximately US$181 million at current exchange rates), which includes construction of trenches, pumping stations, ponds, processing plant, gas power station, camp, airstrip, access road, and an 80 km gas pipeline.

Kalium expects to complete a planned expansion of Beyondie to 120,000 mt/y in September/October 2022, “to take advantage of strong SOP pricing,” and is understood to have agreed an expanded 100 percent take or pay offtake deal with K+S.

Wesfarmers, Mitsui Study Low-Carbon NH3; Wesfarmers Mulls Kwinana Expansion

Ammonia, Australia, Japan, News, News Briefs

Perth-based Wesfarmers Ltd. has partnered up with Waitsia gas field operator Mitsui and the Japan Oil, Gas, and Metals Corp. (JOGMEC) to investigate the export of low-carbon ammonia from Western Australia.

The parties have signed a Memorandum of Understanding and are determining the details of a joint feasibility study, according to a report by the Sydney Morning Herald, citing Wesfarmers Chemicals, Energy, and Fertilisers (WesCEF) Managing Director Ian Hanson.

Mitsui owns a 50 percent stake in the Waitsia gas field in Western Australia’s Mid-West region, about 340 km north of Perth. The report calculates Mitsui’s share of gas from the field’s stage two development that is due to start flowing in late 2023 is sufficient for the production of 1 million mt/y of ammonia.

According to the report, the proposed ammonia export project will need an A$1 billion-plus (approximately US$726 million at current exchange rates) processing plant and large-scale carbon storage.

The Wesfarmers, Mitsui, JOGMEC consortium’s pursuit of a gas-based initiative contrasts with other ongoing Australian developments for green hydrogen and green ammonia production. These initiatives include Yara International ASA’s green ammonia project in the Pilbara, based on a renewable hydrogen plant Yara is building in partnership with French energy and services major ENGIE (GM Sept. 24, p. 1).

Fortescue Future Industries Pty, Ltd. (FFI), a unit of Perth-based iron ore major Fortescue Metals Group, is also investigating the development of a green ammonia plant at the Bell Bay Industrial Precinct in northern Tasmania (GM Nov. 20, 2020), and is studying the establishment of green ammonia supply chains between Australia and Japan (GM  May 21, p. 34). Sydney-based Origin Energy is also pursuing green ammonia ambitions, and is studying the feasibility into building an export scale green hydrogen and ammonia plant, also at Bell Bay.

The Wesfarmers, Mitsui, JOGMEC consortium is understood to be targeting to substantially reduce, rather than eliminate, greenhouse gas emissions. An unnamed Mitsui spokesperson cited by the report said the three partners will work with customers, the West Australia government, and the Mid-West community “to determine a credible path to decarbonisation.”

JOGMEC is a Japanese government body and supports Japan’s oil and gas companies. Japan early this year set a target to use 3 million mt/y of ammonia for fuel by 2030.

WesCEF is pursuing an expansion of its ammonia production at its Kwinana site in Western Australia separately to its agreement with Mitsui and JOGMEC.

WesCEF told Green Markets in May it was in the early exploratory stage for the expansion project. Its current ammonia plant at Kwinana produces 250,000 mt/y. However, WesCEF’s demand for ammonia is approximately double this, necessitating the need to import ammonia to cover the shortfall, the company spokesperson said.

The spokesperson said if an expansion was undertaken, it would mean the WesCEF business would become more self-sufficient and would not have to rely on ammonia imports.

The feasibility study into the expansion, which is targeted for completion around mid-2022, includes options to investigate new technologies, according to the spokesperson.

In addition to the production of fertilizers, WesCEF uses ammonia to manufacture explosive-grade ammonium nitrate and sodium cyanide. The latter product is mainly used for gold processing.

U.K. Imports Largest Ever UAN Shipment

News, News Briefs, UAN, United Kingdom

The U.K. has taken delivery of its largest-ever shipment of UAN, according to U.K. liquid fertilizer manufacturer Omex Agriculture Ltd. 

Omex took delivery of the 50,000 dwt vessel on Sept. 28 at its dedicated processing, storage, and distribution terminal in the port of Immingham on England’s East Coast.

The cargo is earmarked for Omex’s customers from North Lincolnshire to the Scottish borders, and will supply enough raw material for one top dressing of over 330,000 acres of winter wheat, the fertilizer manufacturer said.

Omex said this latest shipment mirrors the company’s earlier largest shipments into the ports of Ipswich and Dundee of 13,000 mt and 10,000 mt of UAN, respectively.

“This shipment is one of a number scheduled to arrive across Omex’s nationwide network of 10 distribution hubs in the coming months, ensuring a regular supply of Nitroflo liquid N+S throughout the U.K. and Ireland, ” the company said.

However, Omex had not responded to Green Markets’ inquiries for comment on the origin of the UAN shipments by press time.

The U.K. imported 97,163 mt of UAN in the first seven months of this year (through July), according to Trade Data Monitor (TDM) statistics. About 62 percent of the imports came from the Netherlands, with Belarus, Poland, and Germany typically supplying the balance. The U.K. has not imported any U.S. UAN since 2018, according to TDM. But import statistics from Aug. 1, 2021 are not yet available.

UAN imports originating in the U.S., as well as imports of UAN from Russia and Trinidad and Tobago into E.U. Member Countries, have been subject to definitive antidumping duties since October 2019, and to provisional AD measures since April 2019 (GM Oct. 11, 2019; April 12, 2019). However, the U.K. is no longer an E.U. Member State, having left the E.U. on Jan. 31, 2020, CET.

CF Fertilisers does not produce any UAN at its two U.K. plants at Billingham and Ince.

Morocco Approves $1.4 B Funding for New Western Sahara “Mega” Port

Morocco, News, News Briefs

Morocco earlier this month approved 12.4 billion dirhams (approximately $1.35 billion at current exchange rates) for the construction of a new deepwater “mega” port in the disputed Western Sahara region, according to a Bloomberg report, citing Casablanca-based Economie & Entreprises.

The release of the funds by Morocco’s former Prime Minister Saad Eddine El Othmani shortly before the end of his government mandate allows construction to start on the new “Dakhla-Atlantic” port, which will be located in Ntireft, a small city approximately 40 km north of Dakhla.

Two local companies, SGTM and Somagec Sud, were short-listed in May to build the port, and construction is expected to take six years to complete.

The Dakhla-Atlantic port is seen as “a strategic project” for the development of the southern provinces of the Moroccan Kingdom. According to local media, the port will be used for both international commerce and fishing activities. In addition to being a positive development for the Moroccan economy, Dakhla-Atlantic will help support the West African region by encouraging domestic and regional trade. 

Local media reported that in its first year of operation, Dakhla-Atlantic could facilitate trade in over 2.2 million mt in goods, with over 950,000 mt in seafood trade alone.

The new port will be located some 550 km south of the Atlantic port of Laâyoune, through which OCP’s Phosboucraâ subsidiary exports phosphate rock. OCP is investing in new phosphate rock processing and export handling facilities at its mining operation in the Laâyoune region.

In addition to targeting increased phosphate rock exports from Boucraâ, OCP has spoken of plans to build a 1 million mt/y fertilizer complex at Al-Marsa near the Laâyoune port, with a focus on exports across Africa (GM Feb. 12, 2016). The current status of this project is unclear, however.