All posts by mickeybarb@charter.net

PhosAgro Prices Seven-Year $500M Eurobond Issue

News, News Briefs, Russia

OJSC PhosAgro, Moscow, has priced a $500 million seven-year Eurobond issue with a coupon of 2.6 percent to be listed on Euronext Dublin, the fertilizer group said in a Sept. 10 statement.

Settlement is expected to take place on Sept. 16.

PhosAgro CEO Andrey Guryev said the group plans to use the funds raised from the bond placement for general corporate purposes, as well as loan portfolio refinancing to maintain the group’s net debt/EBITDA ratio “at a comfortable level.”

PhosAgro’s net debt/EBITDA ratio at the end of the second quarter was 1.07x, compared with 1.86x at the end of 2020. Its net debt stood at RUB 126.3 billion ($1.7 billion) as of June 30, 2021, a RUB 30.5 billion decrease since the end of last year (GM Aug.13, p. 30).

The Russian fertilizer group last tapped the Eurobond market in January 2020, placing a five-year issue worth $500 million at 3.05 percent per annum, according to an Interfax report.

Itafos, Pencco Ink HFSA Agreement

News, News Briefs, Texas

Pencco Inc., Sealy, Texas, has announced a long-term sales agreement with Itafos Conda LLC, a wholly-owned subsidiary of Itafos Inc., Houston, to market and distribute a new production stream of hydrofluosilicic acid (HFSA), which is commonly used for water fluoridation at water treatment plants.

The HFSA will be extracted from Itafos Conda’s phosphoric acid evaporation vapors. The first commercial delivery of HFSA under the long-term sales agreement is expected in first-quarter 2022.

“This partnership will help supply the needs of the North American fluoride market for many years to come,” said Pencco Founder and CEO Ron Horne. “Our investment in the water treatment industry shows our strong commitment to service municipal drinking water in the North American market today and into the future.”

Itafos said in May it was advancing a new initiative to produce and sell HFSA, including completion of a concept study, initiation of detailed engineering and design, and advancement of a potential long-term offtake agreement (GM May 14, p. 29). The company is also pursuing other byproduct initiatives (GM Sept. 4 & 11, 2020).

Founded in 1984, Pencco serves the fluoride market and is also a national producer and distributor of iron products for water and wastewater treatment.

CHS Expands Soybean Refining Capacity

News, News Briefs, Northern Plains

CHS Inc., St. Paul, on Sept. 7 announced a major soybean refinery expansion and renovation project at the CHS Mankato, Minn., soybean processing plant. The more than $60 million project is the second phase of CHS investments to capitalize on changing market dynamics and opportunities to grow market access. When upgrades are completed, annual refined soybean oil production at the Mankato facility will increase by more than 35 percent. Project completion is expected in late summer 2023.

“Trends in global consumption of refined oils such as soy, canola, and palm remain strong, especially in the renewable diesel sector, with projected continued tightening of stocks,” said Tom Malecha, CHS Vice President, Global Grain & Processing operations. “We’re seeing tremendous opportunities to maximize our farmer-owners’ investments in high-performing assets and infrastructure.”

Groundwork for CHS strategic growth plans to participate in burgeoning oil markets began in October 2019, with a 24-month construction project at its Fairmont, Minn., plant, which increased soybean crush capacity by 30 percent and replaced outdated equipment.

“We’re buying and crushing more local soybeans and transporting more crude oil to the Mankato plant for refining,” said Malecha. “We’re looking forward to being able to process even more of farmers’ soybeans into value-added products, which are in high demand by global customers in several market segments.”

Turkish DAP Plant Receives Government Nod

Di-Ammonium Phosphate, News, News Briefs, Turkey

A presidential decree indicating government support of a proposed DAP and cathode copper facility in Turkey’s Samsum province was recently published in the country’s Official Gazette, according to Bloomberg. The project planned by Eti Bakir SA, Kastamonu, a unit of Cengiz Holding (GM Aug. 20. p. 34). Total investment is put at 1.57 billion lira (US$189 million).

The facility would produce 250,000 mt/y of DAP and 15,000 mt/y of cathode copper. The investment would receive government incentives, including exemption from customs duty, VAT return and exception from VAT, corporate tax reduction, staff insurance premium support, and energy cost support. The government will also provide the location for the investment.

Kropz Water License Remains Issue

Africa, News, News Briefs

South African phosphate mine developer Kropz SA Pty, Century City, which is almost half owned by South African billionaire Patrice Motsepe’s African Rainbow Capital Investments Ltd., continues to face delays getting its water license, according to Bloomberg. South Africa’s Water Tribunal recently imposed some 79 conditions on the water license at the company’s flagship project. However, an appeal by environmentalists to have the water license revoked was dismissed, according to a copy of the ruling.

Kropz is developing the Elandstontein phosphate mining project in South Africa’s Western Cape Province, with a targeted 1 million mt/y capacity, but has suffered development delays (GM Sept. 13, 2019). Elandstontein is the second largest phosphate deposit in the country.

The conditions include intensive monitoring of water quantity and quality, as well as the prevention of the spread of invasive plant species. Reports are to be submitted to the relevant regulators. The measures are likely to increase the costs of operating the mine.

Kropz was not immediately available to comment.

CBH to Progress with Expansion Plans

Australia, News, News Briefs, UAN

Australia’s largest grain growers cooperative and grains exporter, CBH Group, Perth, said on Sept. 6 that it will proceed with a proposed facility for the import and storage of dry (granular) fertilizer products and UAN at Kwinana in Western Australia. The project received conditional environmental approval by the Western Australia Environmental Protection Authority earlier this summer (GM June 11, p. 30).

The new facility will include a UAN ship unloading and transfer pipeline, which runs along the existing Kwinana Grain Terminal jetty, as well as 32,000 mt of UAN storage in two 16,000 mt tanks. There will also be 55,000 mt of granular fertilizer storage in a new warehouse, as well as an administration office, landscaping, and security.

CBH currently leases storage facilities for granular fertilizer at the port, and has said consolidating into a single purpose-built facility will “dramatically” reduce the supply chain costs, with savings passed on to growers.

CBH said its fertilizer business, CBH Fertiliser, has achieved year-over-year growth of around 30 percent since it entered the market in 2015 and has reached maximum capacity at its four currently leased facilities. It said Western Australia UAN application rates are growing 12 percent per year, with storage capacity currently not keeping pace, leading to shortages in supply at critical times.

The final plan is down from the original proposal, which had included UAN capacity of 48,000 mt and granular at 80,000 mt, respectively.

Elders Partners on New Products

Australia, News, News Briefs, Specialty

Australian agribusiness and fertilizer supplier Elders, Adelaide, reported that it has partnered with multidisciplinary Australian Research Council (ARC) Research Hub for Smart Fertilisers at the University of Melbourne to develop a new class of fertilizers and inhibitors. The Hub aims to develop a new class of more sustainable “smart fertilizers” to improve nitrogen efficiency while minimizing the environmental impact of productive agriculture.

Elders is involved with the Hub through its research arm, the Thomas Elder Institute.

“Elders has a strong focus on sustainability, implementing strategies throughout our own business, and supporting our clients to adopt practices within their own enterprises,” said Elders CEO and Managing Director Mark Allison. “The implementation of new technologies such as controlled-release and nitrification inhibitors takes nutrition management to the next level.”

Phosphate Hill Mining Contract Extended

Australia, News, News Briefs, Phosphate

Perth-based NRW Holdings’ wholly-owned subsidiary Golding Contractors, Gladstone, has signed a five-year contract phosphate mining extension with Southern Cross Fertilisers, a unit of Incitec Pivot Ltd., Southbank, according to Bloomberg. Golding’s mining contract at Phosphate Hill will extend to Sept. 6, 2026.

The expected contract extension value is anticipated to be A$110-$120 million over the term. Golding’s existing mining fleet will continue to operate in the mine and gypsum operations, with new capital spend limited to replacement of select light and medium vehicles.

ISS Approves LSB Proposals

Fertilizer Stocks, News, News Briefs, Southern Plains

LSB Industries Inc., Oklahoma City, announced on Sept. 9 that independent proxy advisory firm Institutional Shareholder Services (ISS) has recommended that LSB shareholders vote for all of the proposals in the Definitive Proxy Statement filed by the company on Aug. 26, 2021, relating to the company’s agreement 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 (GM Aug. 27, p. 28; July 23, p. 29).

“Although the preferred share conversions into common stock would have a dilutive impact on existing shareholders, the apparent benefits of this proposal outweigh such concerns,” said ISS. “Specifically, the conversion price of the preferred stock was set at a premium, approval of this proposal could improve the company’s ability to raise future capital, unaffiliated shareholders will receive a special dividend as part of the proposed share conversions, and the market reaction has been positive indicating shareholders may view the proposed conversions, favorably. As such, support for this proposal is warranted.”

LSB will hold a Special Meeting of LSB stockholders that will be conducted virtually via live webcast at 8:30 am Central Daylight Time on Sept. 22, 2021. Stockholders of record at the close of business on Aug. 2, 2021, will be entitled to vote their shares at the Special Meeting.

Fox River Advances Martison Project

Canada, News, News Briefs, Phosphate

Junior phosphate developer Fox River Resources Corp., Toronto, announced on Sept. 9 that it has engaged Hatch Ltd., together with JESA Technologies LLC and DMT Consulting Limited, for the preparation of a National Instrument (NI) 43-101 preliminary economic assessment (PEA) study on the company’s 100 percent-owned Martison Phosphate Project located near Hearst, Ont.

“The commencement of the Martison PEA marks a major step forward for the company,” said Stephen Case, Fox River CEO. “We have witnessed substantial movement within the fertilizer space over the past ten years and believe the time is right to advance Martison. There is currently no domestic production of phosphate fertilizers within Canada, and we believe Martison is uniquely positioned to serve the Western Canadian market, a market that is growing rapidly and primarily served by producers in Southern Florida and the Gulf Coast.”

The PEA will include the design of a vertically integrated phosphoric acid facility based in northern Ontario. The phosphoric acid would be used as feedstock for the production of higher-valued products that give Martison an economic and logistical advantage over producers currently serving the company’s anticipated target markets. The company said the project is strategically positioned in proximity to target markets with access to excellent infrastructure including rail, power, labor, and natural gas.

Fox River said it is fully funded through completion of the PEA, which is expected in January 2022.

Fox River obtained the Martison asset in 2016 after previous owner PhosCan Chemical Corp. spun off the asset to Fox River in exchange for shares in Fox River and Petrus Resources Ltd., Calgary.