All posts by mickeybarb@charter.net

Acron Suspends Rare Earth Element Production

News, News Briefs, Russia

Acron Group, Moscow, said on March 15 it is suspending operations at its rare earth element (REE) unit at Veliky Novgorod in northwest Russia. It said the decision has been prompted by market conditions, with low REE prices and market volatility making production unprofitable.

The facility has production capacity of 200 mt/y of REE oxides and was launched in 2016 at a total cost of $50 million. Apatite concentrate from the group’s Oleniy Ruchey mine in the Murmansk region provided the feedstock base for the process (GM July 12, 2019). Acron said group specialists will close down the unit and preserve all equipment.

Cofco Seeks Mergers, IPO; New Giant Would Compete with ABCD Quartet

China, Featured, News

Cofco Corp., China’s largest food company, plans to merge its international trading division with several domestic businesses to create a new agricultural commodity behemoth before embarking on an initial public offering, according to Bloomberg.

Cofco has hired bankers to advise on a plan to combine Cofco International Ltd. with some of its domestic trading and processing assets, according to sources familiar with the talks. After the merger, Cofco plans to sell shares in the new company – most likely in Shanghai, the people said, asking not to be named, as the matter is private. The IPO could value the new company at more than $5 billion, the sources said.

The combination will create a new agricultural trading giant, putting Cofco’s international trading unit and some of its domestic businesses under one umbrella, with assets spanning Brazil to China, according to the sources. The new company, which already has a significant presence in Latin America, particularly Brazil, will compete with the so-called ABCDs, a quartet of global traders that have dominated the industry for decades: Archer-Daniels-Midland Co., Bunge Ltd., Cargill Inc., and Louis Dreyfus Co.

China, the world’s largest buyer of commodities, has helped drive food prices higher over the past 12 months with record purchases of corn and other crops. The new trading colossus will help secure key food-supply chains and provide Beijing with another geopolitical tool in global commerce.

A spokesman for Cofco International in Geneva declined to comment. There was no immediate reply to an email sent to Cofco Corp.’s headquarters in Beijing.

The merger plan comes after Geneva-based Cofco International, also known as CIL, posted record profit on the back of volatile agricultural markets. The overseas trading venture had struggled for several years to make money, but in 2020 pretax profit surged to about $350 million, one source said. The results are unaudited and could still change.

The IPO will allow minority shareholders in CIL, including Chinese private equity investor Hopu, state-controlled China Investment Corp., Singaporean state investment agency Temasek, and a branch of the World Bank, to monetize their investment. Outside investors currently own about 49 percent of CIL, with Cofco controlling the rest.

The merger is expected to be completed this year, with the potential IPO possibly planned for the end of 2021 or early 2022, according to sources. Still, the merger structure has not been finalized, and the IPO plan depends on investor appetite and commodities prices, they said.

Investment bankers, including a bank from China, have been awarded a dual mandate to advise on the plan to merge the Cofco assets and then prepare the IPO, the sources said.

With the merger, Cofco will combine the market savvy of its international trading venture, which is one of the largest soybean exporters from South America, with its domestic assets that trade and process agricultural commodities in China. In effect, it will link farmers around the world directly with the biggest consumers in China. In addition, Cofco is involved in the fertilizer business in Brazil.

Cofco made a major splash back in 2014, paying more than $4 billion to buy the agricultural trading assets of Noble Group Ltd. and Dutch grain trader Nidera BV. However, the acquisitions soon caused major headaches for the Chinese company, saddling it with debt and financial losses related to the deals.

Brazil’s Port of Açu, Fortescue Eye Green Ammonia Project

Ammonia, Australia, Brazil, News, News Briefs

Brazil’s Port of Açu has signed a Memorandum of Understanding (MOU) with Fortescue Future Industries (FFI), a unit of iron ore major Fortescue, Perth, Australia, to develop hydrogen-based green industrial projects in Rio de Janeiro, Brazil. The MOU will allow the parties to conduct development studies into the feasibility of installing a green hydrogen plant at Port of Açu, Latin America’s largest privately owned deep-water port-industrial complex.

Subject to the outcome of the studies, the project envisages construction of a 300-MW-capacity green hydrogen plant at Port of Açu, with potential to produce 250,000 mt/y of green ammonia.

The availability of green hydrogen and renewable power is expected to drive further sustainable industrialization of the port, including production of green steel, fertilizers, chemicals, fuels, and other sustainably manufactured industrial products.

The MOU also lays the groundwork for onsite solar power development projects, as well as offshore wind development projects in the states of Rio de Janeiro and Espirito Santo, said Fortescue.

Port of Açu CEO Jose Firmo said the port is sailing steadfastly ahead toward the sustainable economy of the future. “This will be the first green hydrogen plant in the country and will place FFI and Açu at the forefront of clean energy production and the green industrialization of Brazil,” he said.

Port of Açu is managed by Porto do Açu Operacoes, a partnership between Prumo Logistica and the Port of Antwerp. Prumo is the multi-business economic group responsible for the strategic development of the port. Prumo is controlled by EIG, Washington, D.C.-based fund focused on energy and infrastructure, and by Mubadala Investment Co., Abu Dhabi, which invests in a variety of segments.

AES Mulls Green Ammonia in Chile

Ammonia, Chile, News, News Briefs

Power company AES Corp., Arlington, Va., said on March 3 that its Chilean-based unit AES Gener signed a Memorandum of Understanding in February with an established international hydrogen producer to conduct a feasibility study for the first large green hydrogen-based ammonia project in Chile. This project has the potential to require more than 800 MW of new renewable energy supply.

Alabama Halts Poultry-Based Fertilizer Application by Denali Water Solutions

News, News Briefs, South Central, Specialty

The Alabama Department of Environmental Management (ADEM), Montgomery, on March 10 issued a cease and desist order to Denali Water Solutions LLC, Russellville, Ark., a provider of waste conversion services, barring the company from resuming the application of poultry byproduct materials to land in north Jefferson County, north of Birmingham, for use as fertilizer. The ongoing ADEM investigation found the land application operations violated multiple regulations.

The order comes after ADEM requested that Denali cease operations on March 5 while it investigated complaints from residents about noxious smells and other environmental concerns from the operations, which included possible runoff into streams.

ADEM determined that Denali did not submit to ADEM an Operations Plan and a Nutrient Management Plan for the site prior to the beginning of operations as required by state rules. In addition, ADEM noted the company did not employ best practices in the handling of the byproduct material to minimize odor and protect human health and the environment.

Based on information received by ADEM, the method used by Denali was to spray the byproduct materials on the land surface, “which allowed odors associated with this material to be dispersed into the surrounding atmosphere unabated.” That method was in contradiction to the company’s plans, which stated “the residuals will be spliced into the ground at a depth of 6-12 inches.” ADEM found no evidence that any of the poultry byproducts contaminated nearby streams.

The order means Denali shall cease applying the material to the land until the company has approval from ADEM of a corrective plan that addresses the violations. The order is a preliminary enforcement action while ADEM continues its investigation and does not include penalties. ADEM pointed out that the enforcement action against Denali is a direct result of the Alabama Environmental Management Commission’s adoption last year of new regulations that now address the use of biosolids for fertilizer or other use.

Denali distributes such wastes at numerous locations throughout Alabama, mostly in the northern part of the state, according to AL.com, citing ADEM records that included a warning letter and two notices of violations for its sludge operations in Marshall, Lawrence and Colbert Counties.

Denali had not responded to inquiries at press time.

Denali Water Acquires Jesse Baro

News, News Briefs, Northeast, South Central, Specialty

Denali Water Solutions LLC, Russellville, Ark., a provider of waste conversion services, said March 9 that it acquired the assets of Jesse Baro Inc., a municipal and industrial environmental waste transportation company based in Douglassville, Pa., on Jan. 29, 2021.

Jesse Baro provides a complete range of environmental transportation and land application services for customers in both the private and public sectors, including transportation and land application of residuals for municipal and industrial wastewater treatment plants, water plants, incineration, and food processing facilities. It also provides services to the general construction industry by hauling bulk commodities, stone, compost, soils, and other materials, and managing the disposal needs of large and small contractors.

“The purchase of Jesse Baro, Inc. aligns with Denali’s geographic market diversification strategy,” said Jeffrey J. LeBlanc, Denali President. “This approach enhances our opportunities to deliver quality service and resources to existing and new customers while continuing to provide a safe and excellent workplace for employees. We are excited to have Steve Baro and his excellent team join Denali and look forward to maximizing the synergies between both entities in the Mid-Atlantic area.”

Japanese Companies Partner on Marine Ammonia Fuel Supply and Sites

Ammonia, Japan, News, News Briefs

Tokyo-based trading company Itochu Corp. and its affiliate Itochu Enex Co. Ltd., announced on March 12 that along with ammonia producer Ube Industries Ltd., Tokyo, and fleet owner Uyeno Transtech Ltd., Kanagawa Prefecture, they have reached an agreement to supply marine ammonia fuel and jointly develop supply sites in Japan.

Itochu will develop marine ammonia fuel supply sites and fuel supply vessels, while Itochu will make use of its experience related to the operation of fuel supply refueling vessels and conduct research and development into ammonia fuel supply sites in Japan. Ube will undertake research and development on the supply of marine ammonia fuel itself and on the development of the onshore facilities required for its supply.

As the largest owner and operator of domestic vessels in Japan, and as a company that is already involved in the marine LNG fuel supply business, Uyeno Transtech will conduct research and development into marine ammonia fuel supply vessels, as well as the formulation of safety standards for refueling.

Sumitomo to Consolidate Decarbonization Businesses

Japan, News, News Briefs

Sumitomo Corp., Tokyo, said on March 16 it will establish a new business organization entitled the Energy Innovation Initiative (EII) in April 2021, which will transcend the current framework of business units and aim for the creation of next-generation businesses contributing to carbon-neutral society, and serve as a key initiative for implementing the next medium-term management plan scheduled for announcement in May 2021.

Sumitomo will consolidate a number of decarboniziation-related businesses into EII, including hydrogen, storage batteries that require development from a medium-long term perspective, forest resource and woodchip and biomass businesses, and other next-generation energy-related businesses that various business units have been involved in.

EII will focus in three fields: developing carbon-free energy (CO2 free hydrogen and ammonia etc.); expanding power and energy services (large-scale storage batteries, reusable batteries business, power energy platform business, zero-emission type combined energy services business); and CO2 capture, storage, and utilization (forest-based environmental value creation business, methanation, CCS carbon emissions trading etc.)

Yara, Sumitomo, Other Maritime Players Study Ammonia Bunkering at Singapore

Ammonia, Japan, News, News Briefs, Scandinavia

Yara International ASA, Oslo, and Sumitomo Corp., Tokyo, along with A.P. Moller – Maersk A/S, Fleet Management Ltd., Keppel Offshore & Marine, and the Maersk Mc-Kinney Moller Center for Zero Carbon Shipping, have entered into a Memorandum of Understanding to jointly conduct a feasibility study with the aim to be one of the pioneers in establishing a comprehensive and competitive supply chain for the provision of green ammonia ship-to-ship bunkering at the Port of Singapore, the largest bunkering port in the world.

The study aims to cover the entire end-to-end supply chain of ammonia bunkering, which includes the development of a cost-effective green ammonia supply chain, design of ammonia bunkering vessels, as well as related supply chain infrastructure. Relevant government agencies and experts in Singapore will be engaged in working towards the standardization of safe operation and regulations. The study will assess the supply of ammonia, including potential synergies with Liquefied Petroleum Gas (LPG) as a starting point. Considering the comparable requirements for mild refrigerated storage, vessels or barges initially designed for LPG can also handle brown, blue, and green ammonia.

Yara, along with the Maritime and Port Authority of Singapore (MPA), recently joined the Ammonia-fueled Tanker Joint Development Project (JDP) (GM Feb. 26, p. 38), which has been renamed The Castor Initiative. Its goal is to develop ammonia propulsion ships to support the maritime industry’s drive to decarbonization.