All posts by mickeybarb@charter.net

LSB Closes Transaction, Announces Private Placement

Fertilizer Stocks, News, News Briefs, Southern Plains

LSB Industries Inc., Oklahoma City, Okla., on Sept. 27 announced that it has closed the previously announced transaction with LSB Funding LLC, an affiliate of Eldridge Industries LLC, to exchange the shares of LSB Series E-1 and Series F-1 Redeemable Preferred Stock held by Eldridge for shares of LSB common stock.

The exchange transaction, which was approved by LSB’s stockholders during a Special Meeting on Sept. 22, involved the exchange of $310 million of preferred stock into an equivalent value of LSB common stock based on an exchange price of $6.16, which is equal to the 30-day volume weighted average price as of the date of the Exchange Agreement.

In connection with the transaction, the company will pay existing LSB common stockholders a special dividend in the form of 0.30 shares of LSB common stock for every share owned as of the Sept. 24 special dividend record date. Upon payment of the special dividend on Oct. 8, LSB will have approximately 88.9 million shares outstanding, of which approximately 54.4 million shares, or approximately 61 percent, will be held by Eldridge.

“The closing of our exchange transaction with Eldridge represents a major step in LSB’s progress towards becoming a company that generates consistent growth in earnings and cash flow, and delivers increasing value to our stockholders,” said Mark Behrman, LSB’s President and CEO. “We are pleased that Eldridge has elected to partner with us to transform LSB’s balance sheet in order to give us the opportunity to unlock the company’s full potential as a leading producer and marketer of agricultural, industrial, and mining chemicals, and we look forward to having them as a sizeable holder of our common stock.”

LSB also announced on Sept. 29 that it priced its previously announced offering of $500 million in aggregate principal amount of senior secured notes due 2028, which will be sold in a private placement to eligible purchasers. The notes will be guaranteed on a senior secured basis by all of LSB’s existing subsidiaries and by certain of LSB’s future domestic wholly owned subsidiaries.

The notes will bear an annual rate of interest of 6.250 percent, will mature on Oct. 15, 2028, and will be issued at a price equal to 100 percent of their face value. The closing of this private offering is expected to occur on Oct. 14, 2021, subject to customary closing conditions.

LSB said it intends to use the net proceeds from this offering for the redemption, to pay related transaction fees, expenses, and premiums, and, to the extent of any remaining net proceeds, for general corporate purposes.

Anuvia Partners with JGI on Sustainable Ag

Florida, News, News Briefs

Anuvia Plant Nutrients, Winter Garden, Fla., on Sept. 28 announced a partnership with the U.S. Department of Energy Joint Genome Institute (JGI) to help drive discoveries that will deliver new cutting-edge plant nutrient technologies to farmers who want to improve sustainable soil health practices.

The JGI research team is conducting a series of analytical chemistry experiments on various plant feedstocks and soil samples from Anuvia’s research plots. The researchers designed a fabricated ecosystem device (EcoFAB) that will uncover the mechanisms underlying the interactions between plants and their root microbial communities. Combining the tools of liquid chromatography and mass spectrometry, JGI claims it can precisely measure microbial changes to identify product-specific organic compounds that support the growth of beneficial microbes.

“This project is a fantastic opportunity for us to use our EcoFAB and metabolomics capabilities to gain insights into how Anuvia’s products support sustained plant and microbial growth and ultimately better crop yields,” said Nigel Mouncey, JGI director.

Anuvia manufactures high-efficiency, sustainable bio-based fertilizers under the GreenTRX brand for turf and lawn, and the SymTRX brand for agriculture. The company said its products deliver consistent, slow-release multi-nutrients and reintroduce organic matter to soil, stimulating nourishment for microbes to multiply. Anuvia said the slow-release technology allows more nutrients to be used, decreasing nutrient loss from leaching or volatilization while increasing crop yield and improving soil health.

“Harnessing JGI’s technologies and expertise allows us to more rapidly identify the qualities of organic feedstocks that enhance the soil microbiome and improve soil health while efficiently releasing nutrients critical for plant health,” said Shawn Semones, Anuvia’s Vice President of Research and Development.

“Our collaboration with JGI will spur development of technologically advanced products that bring balanced land stewardship and management to agriculture,” Semones added. “On the manufacturing side, these new technologies will optimize the use of renewable natural resources and diminish waste streams while advancing a circular business model.”

JGI is a DOE Office of Science User Facility at Lawrence Berkeley Nation Laboratory in Berkeley, Calif. DOE’s Office of Science is the largest supporter of basic research in the physical sciences in the U.S.

New Vision Co-op Joins Truterra Network

News, News Briefs, Northern Plains

New Vision Co-op in Brewster, Minn., announced on Sept. 28 that it has joined the Truterra network, the farmer-owned and farmer-driven food and ag sustainability program launched by Land O’Lakes Inc. in 2016. Truterra was formerly known as Sustain.

New Vision said being part of the Truterra network will allow it to offer local farmers a powerful suite of tools to help them optimize sustainability and profitability. Farmers working with New Vision will now have access to the Truterra Insights Engine, a sustainability tool that allows farmers to generate a stewardship baseline for every field and then predict and measure the impact of implementing specific conservation practices on both the environment and their profitability.

“New Vision is excited to be partnering with Truterra. We feel this partnership will allow our customers the opportunity to take the next step in their on-the-farm sustainability,” said Josh Hilbrands, New Vision Agronomy Department Manager. “Truterra is one of the first to help promote stability and improve crop production while protecting the health of our nation’s soil. I am confident that through this partnership, our producers will use Truterra’s insights and platforms to implement new technologies to help us grow for the future.”

New Vision said it will work with interested farmers to document their current practices and unlock insights about their fields to evaluate and implement conservation practices to better achieve agronomic and economic goals. With Truterra, farmers retain ownership of their data at all times.

“Truterra is excited to have New Vision join our network, expanding our footprint in Minnesota and bringing agronomic insights and industry connections to their farmers, so they can protect and restore their land, and unlock its deeper value,” said Mariah Murphy, Truterra Field Team Leader.

In February 2021, Truterra launched its carbon credit program, a new carbon program that will help farmers generate and sell carbon credits to private sector buyers. For the first offer, participating farmers will receive $20 per ton of carbon, with payments this fall for this first tranche of credits. Qualifying farmers will be compensated for carbon sequestration retroactively up to five years based on the soil health practices they adopted in prior growing seasons.

Russia Agrees On MET Changes, Postpones Profit Tax Increase

News, News Briefs, Phosphate, Potash, Russia

Russia’s government has submitted proposed changes to mineral extraction taxes (MET) for Russian minerals and metals companies from 2022 to the lower house of parliament, or Duma, according to media reports, citing the draft budget proposals published on Sept. 30.

The submission of the draft proposals follows agreement between the government and the country’s biggest metals and mining companies on tax changes after more than a week of intense negotiations (GM Sept. 24, p. 33; Sept. 17, p. 30; Sept. 3, p. 31).

In the fertilizer sector, the changes will affect companies producing apatite-nepheline, apatite and phosphate ores, and potash.

Nepheline, apatite, and phosphate ores are produced by PhosAgro and the Acron Group. The draft proposals see the rent coefficient increase from 3.5 to 7 for these ores in 2022, according to an Interfax report, citing the draft budget proposals

For potash – produced by Uralkali and EuroChem – the draft proposes introducing an additional coefficient of RUB85 (approximately $1.17/mt at current exchange rates) per ton of ore mined, according to the report.

A separate MET proposal has been made for ore extracted by EuroChem’s Kovdorskiy GOK, which produces iron ore and baddeleyite, as well as apatite. According to Interfax, the MET rates set for it use a rent coefficient of RUB1:207/mt of magnetite-apatite ore, RUB82/mt of apatite-staffelite ore, and RUB132/mt of low-iron apatite ore.

The coefficient is the multiple that Russian companies are required to pay on top of the base tax rate, and is set annually. According to the report, citing the draft document, producers of nepheline, apatite, and phosphate ores will additionally need to allocate RUB2.16 billion for the MET, and potash producers RUB4.34 billion.

A rent coefficient of 3.5 to the current MET rate was introduced 12 months ago by Russia’s government for a number of solid minerals (GM Oct. 2, 2020). The multiplying coefficient was set – among others – for potassium salts (baseline rate – 3.8 percent), apatite-nepheline, apatite, and phosphorite ores (4 percent). New projects being implemented under special investment contracts (SPIC) and Investment Protection and Promotion Agreements (IPPA) were exempt from the multiplying coefficient.

The MET hike for the mineral fertilizer sector in 2022 is expected to yield some RUB10.25 billion in additional revenues for the Russian Federal Budget, according to the report, citing the draft budget documents submitted to the State Duma.

The draft changing will now face three readings in the Duma.

Surging raw materials prices pushed Russia to reconsider levies on the mining and metals industries, which traditionally have faced a lower tax burden than the oil and gas sector. A decision about linking profit tax to dividends and investments has been postponed, but the discussions on the differentiated profit tax will continue, Bloomberg reported, citing Shokhin.

The differentiated profit tax may be applied to all Russian companies, except for state-owned concerns and companies that pay less than RUB5 billion ($68 million) in the five-year period.

Casale, KuibyshevAzot Sign ANS Plant Contract

Ammonium Nitrate, Europe, News, News Briefs, Russia

Casale SA, Lugano, reported on Sept. 27 that it has signed a contract with Russian nitrogen fertilizer and chemicals company PJSC KuibyshevAzot for the realization of a 1,575mt/d nitric acid and a 2,000 mt/d ammonium nitrate solution (ANS) complex in Togliatti. Completion of the complex is slated for the fourth quarter of 2024.

Casale completed the Front-End Engineering Design for the project before the COVID pandemic. The new facility will incorporate the Swiss company’s NA2000TM Dual Pressure processes for nitric acid and its AN2000TM for ANS production.

Casale will be responsible for the turnkey execution, and its Czech subsidiary, Casale Project, will be involved in key phases of the project.

KuibyshevAzot is one of the leading chemical enterprises of Russia. In addition to ammonia and AN, its nitrogen fertilizer product range includes urea, ammonium sulfate, and UAN. It is also an important producer of caprolactam and its derivatives, including polyamide-6, high strength technical yarns, tire cord, and engineering plastics.

Minbos, Angolan Firm Ink MoU for NPK Plant

Africa, Australia, News, News Briefs, NPK

Australian mining junior Minbos Resources Ltd. and Angolan agribusiness Sociedade Agroquímica Industrial (Sagrind) have signed a Memorandum of Understanding (MoU) to build an NPK fertilizer blending plant and distribution business in Angola.

Under the agreement, Sagrind will provide local agricultural management and knowledge, including its distribution network. The Angolan government has allocated a 20-hectare site in Malanje, 380 km (240 miles) east of the country’s capital Luanda.

“The signing of this agreement with our new local partner paves the way for Minbos to ramp up plans for delivering a locally-produced NPK fertilizer and associated products within the Malanje growing corridor,” said Minbos CEO Lindsay Reed. The Australian junior has released no details of the plant’s proposed capacity or project timeline.

Minbos and its Angolan partner, Soul Rock Ltda., are developing the Cabinda Phosphate Project, which includes the Cácata Mine and Caio Granulation Plant at Porto de Caio. A Definitive Feasibility Study has yet to be completed for the project (GM Oct. 2, 2020). The company and its Angolan partner, Soul Rock Ltda., won an international tender for the Cabinda Project in March 2020 (GM March 20, 2020).

ResponsibleAg Completes 4,000th Audit

News, News Briefs

ResponsibleAg, the voluntary and industry-led safety and stewardship initiative, announced on Sept. 17 that it reached another major milestone when the 4,000th facility audit was completed at Rutherford Farmers Cooperative in Murfreesboro, Tenn., a Tennessee Farmers Cooperative (TFC)-affiliated facility.

Launched in 2014 as a joint venture of The Fertilizer Institute (TFI) and the Agricultural Retailers Association (ARA), ResponsibleAg provides an audit and certification program to help participating locations ensure they comply with pertinent regulations from OSHA, DOT, EPA, and DHS to keep employees, customers, and communities safe.

“Reaching that milestone illustrates both the success and value of the program and shows there’s longevity in the program,” said Drew Landerman, Environmental, Health, and Safety specialist for TFC and a ResponsibleAg-credentialed auditor. Landerman said TFC encouraged its member cooperatives to participate in ResponsibleAg from the start, with the Rutherford Farmers Cooperative’s DeKalb County branch becoming the 1,000th facility nationally to earn ResponsibleAg Certification in 2018.

“ResponsibleAg’s comprehensive audit checklist is regularly updated to reflect new regulations, so we don’t have to spend time creating our own,” he said. “Instead, we can focus on educating not only the various managers, but also employees at our ag retail sites on safety to help them better understand and meet safety regulations. We’ve found doing this, plus educating them about the ResponsibleAg program, increases employee ownership and pride in their workplace, which leads to fewer injuries, illnesses, and citations.”

The ResponsibleAg audit encompasses up to 17 areas of operation, depending on the type of facility. Following an audit, the facility receives a corrective action plan detailing how to resolve any issues identified. Once corrections are made, the facility achieves ResponsibleAg certification, which is good for three years. Recertification ensures personnel stay up to date on safe practices and facilities comply with new or updated rules and regulations.

Since the first ResponsibleAg audits were conducted in 2015, almost 130,000 compliance issues have been identified at participating facilities, and nearly 96,000 issues have been resolved to date. “While that’s a good track record, our goal is to continue to improve those numbers,” said Tim McArdle, a longtime board member and retiring chairman of the ResponsibleAg Board of Directors. “Safety and compliance are at the heart of what ResponsibleAg does. The industry’s continuous commitment and strong participation show regulators that we place high importance on compliance and we are capable of self-regulating.”

USDA Invests in Renewable Energy Infrastructure

News, News Briefs, U.S.

The U.S. Department of Agriculture is investing $464 million to build or improve renewable energy infrastructure and to help rural communities, agricultural producers, and businesses lower energy costs in 48 states and Puerto Rico, according to a Sept. 9 announcement from USDA secretary Tom Vilsack.

“USDA continues to prioritize climate-smart infrastructure to help rural America build back better, stronger, and more equitably than ever before,” Vilsack said. “We recognize that lowering energy costs for small businesses and agricultural producers helps to expand economic development and employment opportunities for people in America’s rural towns and communities. The investments we are announcing today demonstrate how the Biden-Harris Administration has put rural communities at the heart of climate action and climate-smart solutions.”

USDA is financing $129 million of these investments through the Rural Energy for America Program, which helps agricultural producers and rural small businesses purchase and install renewable energy systems and make energy efficiency improvements. The remaining $335 million is financed through the Electric Loan Program, which helps build or improve 1,432 miles of line in rural areas and includes $102 million for investments in smart grid technology.

Projects that will receive funding include a $25 million loan to Red Trail Energy LLC in North Dakota to build a carbon-capture processing and storage facility at an ethanol manufacturing facility; a $95 million load to Prairie State Solar LLC to construct a 99 megawatt solar photovoltaic farm on 621 acres in Perry County, Ill.; and a $599,000 grant to Gulf Coast Solar LLC in Mississippi to make energy efficiency improvements at three wastewater treatment facilities in Hancock County.

Orica Expects NPAT Cut in Second Half

Ammonium Nitrate, Australia, Earnings, News

Melbourne-based explosives maker Orica Ltd. said it now expects to take a A$345-$370 million (approximately US$249-$267 million at current exchange rates) hit on its second-half FY2021 statutory net profit after tax (NPAT) from individually significant items.

Orica said this brings significant items for the full fiscal year to a reduction in its statutory NPAT of about A$342-$367 million when considering the A$3 million after-tax gain recognized in the first half of the fiscal year.

The biggest significant item is for the Yara Pilbara Nitrates (Pty) Ltd. joint venture operating the Burrup technical ammonium nitrate plant in the Pilbara, in Western Australia. Orica said following the impairment recognized by the joint venture, it has reviewed the carrying value of its 50 percent share. Yara International holds the other 50 percent. The review has resulted in Orica recognizing a non-cash impairment of A$260-$270 million after tax, which includes a full impairment of the goodwill associated with the investment.

The Burrup TAN plant recommenced operations in early May 2020 (GM May 8, 2020) after operations were stopped in July 2019 to undertake critical rectification work (GM Aug. 2, 2019). At full capacity, the Burrup plant can produce 330,000 mt/y of TAN.

Orica also expects to take an approximate A$145-$155 million non-cash impairment charge after-tax in the second half of FY2021 on the goodwill in the EMEA segment, amid the ongoing “challenging market conditions.”

The company also expects an approximate A$10-$15 million impairment for further redundancy costs in the second half as part of its global restructuring, but a positive after-tax gain of around A$70 million is anticipated from non-core land sales. This latter item comprises the sale of Lot 9 Botany in New South Wales, with the cash proceeds received on Sept. 7, 2021.

In terms of the company’s business performance, Orica said this continues to improve in the second half of FY2021, with ammonium nitrate (AN) volumes up from the first half (GM May 21, p. 28). First-half AN volumes were 1 percent off year-over-year at 1.94 million mt, and 9 percent off when excluding the 160,000 mt from Peru’s Exsa SA, which was acquired on April 30, 2020 (GM Feb. 28, 2020).

The company said all continuously manufacturing AN plants have been operating well during the second half. A planned turnaround at the Carseland plant in Alberta, Canada, started in September, with completion expected in October.

Orica reports its full fiscal-year 2021 results on Nov. 11.

UralChem Subsidiary Opens Branch In Zimbabwe

Africa, News, News Briefs, Russia

A subsidiary of Uralchem JSC, Moscow, has opened a branch in Zimbabwe.

United Fertiliser Company Ltd. (UFCL) manufactures compound and blended fertilizers and supplies its products to farmers and commercial growers across Africa, according to a Bulawayo24News report.

The branch opening comes at a time when the Zimbabwe government is wooing foreign investors to help revive the country’s ailing economy.

Uralchem has been keen to beef up connections in Africa, and previously has talked about its ambitions to establish a Russian hub in Zimbabwe, and possibly also in Zambia, in possible cooperation with Uralkali, for the direct supply of mineral fertilizers to the two African nations and potentially their neighbors (GM Feb . 9, 2018).

Last week, Uralchem said it was preparing to open a representative office in Nigeria in the near future, and was also looking to build a plant in the West African country at some point in the future (GM Sept. 24, p. 32).