| Producer | Symbol | Price | Week Ago | Year Ago |
| Agrium | AGU | 49.82 | 53.29 | 77.74 |
| CF Industries | CF | 86.63 | 90.06 | 114.97 |
| Intrepid Potash | IPI | 23.42 | 25.19 | 32.11 |
| Mosaic | MOS | 50.40 | 53.73 | 84.32 |
| PotashCorp | POT | 90.86 | 96.51 | 162.69 |
| Terra Industries | TRA | 36.49 | 36.68 | 38.34 |
| Terra Nitrogen | TNH | 104.15 | 106.91 | 110.66 |
| Distribution/Retail | ||||
| Andersons Inc. | ANDE | 34.98 | 36.03 | 40.35 |
| Deere & Co. | DE | 44.43 | 45.92 | 57.56 |
| Scotts | SMG | 42.25 | 43.84 | 23.43 |
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SPOT BARGE PRICES
Agrium, Simplot plan new mines in Idaho
Both the J.R. Simplot Co. and Agrium Inc. plan to develop major new open pit mines in Southeast Idaho’s Caribou County, a region rich with phosphate ore used to feed their fertilizer plants near Pocatello and Soda Springs. Jeffrey Cundick, minerals branch chief in the U.S. Bureau of Land Management’s Pocatello field office, said Simplot has submitted an application to the BLM for its new Dairy Syncline Mine, and Agrium is expected to turn in paperwork soon for its new Rasmussen Valley Mine.
Cundick, who has been responsible for the technical oversight of the Caribou-Targhee National Forest’s phosphate program for nine years, said because the BLM and U.S. Forest Service have made mine plan approvals more rigorous, phosphate companies have had to “front-load everything” and initiate their permitting processes well in advance of when they plan to actually open mining operations.
“The state-of-the-art mines we’re approving now are much different from the historic mines causing problems. That said, we have to remain vigilant. We have to monitor these sites,” Cundick said. “Once we approve mines, they don’t go away.”
Whereas a mining project once took a few years to approve, Environmental Impact Statements now must include sophisticated groundwater models and stringent strategies to prevent contamination from selenium and other toxic metals and minerals, Cundick said. That requires additional time to gather more data and ensure compliance. Companies also must factor in potential litigation delays.
Cundick said that federal agencies will soon announce an EIS public scoping process in regards to Simplot’s proposed Dairy Syncline project, most likely before the end of December. About 2,130 acres would be disturbed 10 miles east of Soda Springs, and 10 miles west of Simplot’s controversial Smoky Canyon Mine near Afton,Wyo. “They didn’t waste any time. They want to be proactive in the permitting process,” Cundick said of Simplot officials. “They’ve been exploring that property intermittently for seven years.”
In addition to the open pit mine, the Dairy Syncline Mine would include a new milling plant, an underground phosphate slurry, water lines, tailings impoundment, a new power line, a BLM land sale, and a Forest Service land exchange for private holdings. The mine’s ore reserves would last an estimated 25 years.
The BLM and the Forest Service have created an interdisciplinary team composed of biologists, archeologists, mining engineers, geologists, and an environmental contract consultant to scrutinize the Dairy Syncline project.
“Agrium has not submitted a proposal yet, but we expect that some time this fall,” Cundick said, noting it will comprise 680 acres of federal mineral leases that Agrium holds and wants to develop. Most of the land would be in the national forest, but the Blackfoot River Wildlife Management Area managed by Idaho Fish & Game would also be affected. “We’re really expecting it any time. They’ve been working on it intensively for two years,” Cundick said, referring to Agrium’s new mine application.
Canadian-based Agrium has “been doing their exploration drilling last year and this year. They are feverishly trying to delineate the body and put together a mine plan. It will be about one square mile of land.”
Nu-West Mining Inc. and Nu-West Industries Inc., subsidiaries of Agrium Inc., on Sept. 2 filed suit against the federal government in U.S. District Court (GM Sept. 7, p. 13) in Idaho to recover past and future selenium cleanup costs at four Dry Valley phosphate mine sites in Southeast Idaho’s Caribou County.
Nu-West now operates the Dry Valley and North Rasmussen Ridge mines north and east of Soda Springs, as well as the nearby Conda phosphate fertilizer plant, employing about 425 employees and contractors.
The Nu-West companies said they filed the civil action to recover costs incurred with the remediation of the South Maybe Canyon Mine, the North Maybe Mine, the Champ Mine and extension, and the Mountain Fuel Mine, which are about 15 miles east of Soda Springs.
“Agrium didn’t want all the leases in Dry Valley,” Cundick said. “The Nu-West lawsuit is limited to the historic Dry Valley projects operated by Agrium.”
While Agrium’s new Rasmussen Valley Mine would be far south of a deposit that lies on Rasmussen Ridge, it would be in the vicinity of the headwaters of the Blackfoot River, near where Lanes Creek and Diamond Creek converge. “The proximity to the river definitely presents additional permitting challenges,” Cundick said.
Agrium is winding down its Dry Valley Mine, which it acquired from FMC/Astaris about the time FMC shut down its Pocatello elemental phosphorus plant in December 2001. It is transitioning more fully into its North Rasmussen Ridge Mine, which the BLM approved in 2003. FMC mined the A and B panels there. Agrium finished the C panel and continues to work the D panel.
The BLM is mandated by Congress to issue mineral leases on national forests and ensure that the environment is protected from contamination. “Of course, there are a lot of problems that have developed from historic mining, but we have had good cooperation from the industry in rising to the challenge. They want to continue to operate here in Southeast Idaho,” Cundick said.
Simplot recently welcomed a U.S. Magistrate’s decision to deny a request by environmental groups to impose a permanent injunction that would block the expansion of Simplot’s Smoky Canyon Mine (GM Aug. 10, p. 13). The ruling gave Simplot the green light to proceed with the project, which will help ensure the continued supply of 1.5 million annual tons of phosphate ore to Simplot’s fertilizer plant near Pocatello and the employment of more than 500 workers at the plant and mine. Simplot said at the time that its phosphate reserves would be exhausted by 2010 if it were not allowed to expand onto two panels in the CaribouTarghee National Forest near the Idaho-Wyoming border. The expansion should provide ore for another 15 years. Simplot has been working on the development of the Smoky Canyon Mine for over nine years.
Terra eyes near-term expansion or acquisition, expects NOx abatement to take significant capacity
Terra Industries Inc. told analysts Sept. 15 at the Credit Suisse Chemical and Ag Science Conference that it would need a $150-$200 million expansion or acquisition within the next 12-18 months in order to accommodate demand for its developing NOx emission reduction business. Specifically, Terra needs to expand its urea liquor capacity to serve this growing market.
Daniel Greenwell, Terra senior vice president and chief financial officer, said such an expansion would get the company to 2014. He added that it would have to build or acquire more assets to continue to expand its market share.
To date, Terra’s wholly-owned unit, Terra Environmental Technologies, has been serving the stationary power plant segment of the NOx abatement market. Terra says it now represents 10 percent of its revenues and estimates that it has 60 percent of that market.
Terra has been gearing up for the NOx abatement market for diesel engines as a result of the 2010 Clear Air Act. The company says if demand follows the trend already occurring in Europe, there will be a significant increase in North American nitrogen demand for liquid urea, and it plans to capture a significant share of this market. “Terra alone, among North American producers, has been laying the groundwork for this market,” said Greenwell. He added that the current NOx market would be difficult for importers to enter since imported urea comes in granules that include formaldehyde, which cannot be used in the NOx catalyst system. He said this could be overcome by technology, but it would take a long time.
Greenwell believes Terra can capture roughly 50 percent of this market in diesel exhaust fluid. He said as this market matures, which he thinks it will in 2014-2015, that every year the new truck models are introduced, there will be a high penetration rate of new SCR technology, which will use this material. “We are expecting that in 2014-2015, roughly 10-15 percent of North America’s capacity will be consumed by this application. So from a commodity producers’ view, anytime you have a brand new market that consumes 10-15 percent of existing capacity, that is a very attractive proposition.” He added that the company isn’t just talking about it, but doing something, noting that it has an agreement with Daimler to supply their engines coming out of the plants with Volvo Mack.
Three gallons of urea solution will be used for each 100 gallons of diesel fuel, according to Greenwell. At this rate, he said Terra could get $400-$500 million of incremental revenue from this market.
Greenwell also discussed the high price of replacement costs for nitrogen plants, as well as CF Industries Holdings Inc.’s attempts to buy Terra. “When you look at the value of assets today that are currently operating and you weigh that against a greenfield investment, you can clearly see that it’s a good time to be buying existing assets. And hence, you have the froth in the nitrogen space right now. It’s a good time to be buying assets at today’s valuations versus when you look at the new next incremental ton of capacity that has to be built somewhere around the world.”
“North American producers are in a pretty favorable position as compared to where they have been historically,” he added. “And we’re principally focused in North America. So we believe our assets have wonderful values.”
“All of us should be for sale at the right price,” continued Greenwell. “We know that, but we’re nowhere even close to that right price…You don’t seem to see a lot of willing sellers, and they’re all just saying no.”
In related news last week, Terra announced that TET has launched a new website at www.tet-terra.com. It features content tailored to two distinct customer types – mobile and stationary. Mobile includes original equipment manufacturers (OEMs), dealers, fleets, owner/operators, and truck stops. Stationary includes power plants, large industrial applications, and stationary diesel-powered engines that use various NOx reducing reagents such as anhydrous and aqueous ammonia, urea, and urea liquor, in SCR and selective non-catalytic reduction (SNCR) systems.
TFI attendees treated to national treasures; Albright gives country-by-country critique
Attendees of the TFI World Conference in Washington, D.C. Sept. 13-15 were treated to two offsite receptions at national landmarks. One reception was held at the Donald W. Reynolds Center for American Art and Portraiture. The second reception, at the Smithsonian’s National Museum of Natural History, provided attendees an opportunity to visit the industry-sponsored “Dig It! The Secrets of Soil” exhibit. Major sponsors for the exhibit are TFI, the Nutrients for Life Foundation, and the Soil Science Society of America.
In keeping with the Washington theme, the keynote address was delivered by former Secretary of State Madeleine Albright. With a nod to the industry, she said that petroleum is not the only strategic resource, that fertilizer is a vital resource. On global trade, she warned against the “trap of protectionism.”
On one issue of concern to the industry – climate change – Albright said the government’s solution must be fair and helpful to the economy and must work. She said President Obama is determined to make a difference, but is pragmatic and knows the market must be the primary engine to get the economy to grow. Despite the movement to new renewable fuels, Albright said that fossil fuels will be the primary fuel for decades. She added that nuclear is also essential in a carbon-constrained future, and that complete energy independence is not realistic.
Albright said the refusal to participate in solving the global warming problem is not a sufficient response from China or any other country.
On various other topics, she offered the following.
Iran: It has no reason to be at odds with its neighbors. Albright said that engagement is not appeasement, and that they cannot deliver tough messages if they do not meet.
Russia: It can do more for itself with integration with the West. Young people are developing a huge distrust of the U.S., partly because they are being taught that the West let them down in World War II.
North Korea: It needs fuel oil and fertilizer, and both are bargaining points. No matter what their policy ideas are, people have to eat.
Pakistan: She said it can be summed up in one word – dangerous. Pakistan has nuclear weapons, terrorism, extremism, corruption, and a weak government. It is more preoccupied with India than fighting the Taliban. One positive is that the country has a middle class.
China: Albright said China is still resource hungry, with an 8 percent growth rate this year. They have major environmental, urban/rural, and ethnic problems. They need to look at a global approach. There is a growing middle class that may demand to be part of the system. They have become semi-capitalist, and she does not foresee an ideological clash with China. Albright said U.S. policy should be to have them as a strategic partner.
Venezuela: Hugo Chavez has an unquenchable lust for power, wanting to be the next Simon Bolivar for South America. Albright said that Chavez acts like a pale version of Fidel Castro. She said democracy has not delivered in some countries, and that is why you have the likes of Hugo Chavez.
Cuba: Albright gave one prediction. Fidel Castro will die. She noted that the U.S. has been making slow attempts at more normal relations with Cuba, but that they have a disingenuous democratic process in Cuba.
Attendance at this year’s event was down only about three percent, to 704 from the year-ago 727, when it was held in Seattle. Considering the intervening global financial collapse, that was not much of a drop. As for tone, while phosphate sources appear to be a little upbeat, most sources noted a lot of concern about the late harvest season and the general reluctance by farmers to buy product.
Industry mourns loss of Dr. Norman Borlaug, father of “Green Revolution”
Dr. Norman Borlaug, agricultural sciences pioneer and acknowledged father of the “Green Revolution,” passed away Sept. 12 at the age of 95. During his lengthy career, Borlaug was awarded the Nobel Peace Prize, the Presidential Medal of Freedom, and the Congressional Gold Medal for his developments in food production, including advances in plant breeding, irrigation, and pesticide and fertilizer use. He has been credited for saving more people on the planet than any other human in history.
Raised on an Iowa farm, Borlaug received a Ph.D. in plant pathology and genetics from the University of Minnesota. His career began in the 1940s at DuPont, and he was a key figure in the transformation to the higher-yield farming practices that began after World War II. One of Borlaug’s initial successes in the 1940s was to help Mexico increase its agricultural development through research on maize and disease-resistant “dwarf” wheat varieties, turning the country from an importer to an exporter of wheat by the mid-1960s.
Borlaug’s success with wheat breeding in Mexico was transplanted to famine-stricken India and Pakistan in the 1960s. The new strains nearly doubled Indian and Pakistani wheat production between 1965 and 1970, increasing production by more than 11 million tons in those two countries. Those successes, achieved at a time when mass famine was widely predicted, spread Borlaug’s fame and his dwarf wheat varieties throughout the world, including Latin America, the Middle East, and Africa.
Borlaug was awarded the Nobel Peace Prize in 1970 for his efforts in alleviating world hunger. In later years he was awarded the Presidential Medal of Freedom and the U.S. Congressional Gold Medal, the country’s two top civilian honors. He was also awarded the Padma Vibhushan, India’s second highest honor, as well as numerous honorary universities degrees from around the world.
“In the death of Norman Borlaug, the world today has lost not only an eminent agriculture scientist but a man dedicated to the cause of humanity,” said Agriculture Minister Sharad Pawar of India. “As India moves towards the second Green Revolution, his enduring vision will be a source of inspiration and sustenance for all of us.”
Borlaug had been a professor at Texas A&M University since 1984. He remained a staunch advocate of high-yield farming practices until his death, even as criticism grew among environmental advocates that plant breeding advances, biotechnology, and the overuse of pesticides and fertilizer posed dangers of their own.
Borlaug was a hero of the fertilizer industry, and his words and likeness were featured in several industry public relations campaigns. “This is a basic problem, to feed 6.6 billion people,” he once said. “Without fertilizer, forget it. The game is over.”
“We were saddened to learn of Dr. Borlaug’s passing,” said Ford B. West, president of The Fertilizer Institute. “With energy, empathy and brilliance he delivered the tools of modern food production to the world’s poor. The millions of lives he saved stand as the most fitting legacy of his work.”
The International Plant Nutrition Institute also added its voice to the many Borlaug tributes last week. “In an amazing journey from his Iowa farm roots to world recognition as a Nobel Peace Prize laureate, he never lost sight of the importance of global food security and the power of science through agriculture,” IPNI said in a Sept. 15 statement. “While we are saddened by the loss of this innovative scientist and beloved leader, we believe his vision and accomplishments will serve as inspiration to future generations to continue the quest for world food security.”
The American Seed Trade Association also praised Dr. Borlaug, saying his death “is truly a loss for the plant breeding industry.” ASTA Chairman Jerry Monk of Warner Seeds Inc. in Hereford, Texas, said Borlaug “challenged today’s crop of plant breeders to rise to a new level that would benefit growers globally.”
U.S. Rep. Tom Latham (R-Iowa) has started an effort to memorialize Borlaug with a bronze statue in the U.S. Capitol. Latham asked the state’s six other members of Congress on Sept. 14 to join him in asking Gov. Chet Culver and the Legislature to pass a resolution designating Borlaug. However, a Borlaug statue would have to replace one of two statues – of Samuel Kirkwood and James Harlan – currently representing Iowa in the Capitol’s Statuary Hall.
Monsanto proposed Idaho mine gains local support
The Idaho Farm Bureau Federation, Food Producers of Idaho, Idaho Grain Producers Association, and Idaho Sugarbeet Growers Association have endorsed Monsanto’s proposed Blackfoot Bridge Mine (GM Aug. 17, p. 1), saying it would allow for continued domestic production of specialty herbicides that help farmers produce food more efficiently.
Monsanto’s three-furnace elemental phosphorus plant near Soda Springs helps supply the key ingredient used in the production of its popular Roundup herbicide.
The four agriculture groups said they support the Bureau of Land Management’s “preferred alternative” outlined in BLM’s Draft Environmental Impact Statement for the mine, which would disturb about 740 acres of private land and 74 acres of BLM land.
The alternative sets strict environmental safeguards and reclamation standards for the mine, including the use of a laminated geosynthetic clay liner to cover and contain waste rock and protect the Blackfoot River from detectable increases in selenium.
The mine would replace Monsanto’s South Rasmussen Ridge Mine, which supplies a million tons of phosphate annually to Monsanto’s Soda Springs plant. Its ore is expected to be exhausted by 2013. The Blackfoot Bridge ore is expected to last 15 years.
According to Idaho Farm Bureau President Frank Priestly, “This is the only source of elemental phosphorus in the United States. Without it, we will have to rely on China. That’s one reason we’re encouraging our members to become familiar with the project and submit comments on the project to the BLM.” Priestly added that Roundup is a valuable tool that helps American farmers feed the world.
On its web site, the Idaho Farm Bureau notes Monsanto is Caribou County’s largest employer, with 375 working directly for the company and 395 working for mine, plant maintenance, security, and other contractors. It paid $29.4 million in annual payroll and benefits in 2006.
Scott Brown, vice president of the Idaho Grain Producers Association, said Monsanto’s Blackfoot Bridge Mine is doubly important in that Monsanto not only provides good-paying jobs and a solid tax base, but its glyphosphate-based herbicides also help farmers stay competitive and efficient.
Brown said that another factor in supporting the project is the fact that the BLM and the Idaho Department of Environmental Quality took Monsanto’s mining proposal and upgraded it to ensure selenium is contained and the environment is protected.
“It’s clear Monsanto and the agencies are taking extra measures to protect the environment, and particularly water quality,” he added. “I farm near the mine, so I have a direct stake in its safety.”
The Food Producers of Idaho represents more than 20 Idaho farm organizations. FPI Executive Director Rick Waitley said world population figures will be staggering by 2025 and beyond. “The treasure of the Blackfoot Bridge Mine is key to meeting the food production needs of the future. Agriculture around the world looks to this resource to meet the future food supply need,” Waitley said.
Mark Duffin of the Idaho Sugarbeet Growers Association said the Blackfoot Bridge Mine represents where modern agriculture and environmentally-sound mining intersect to benefit the public. “The old saying that ‘If it can’t be grown, it has to be mined,’ really applies to this project,” Duffin said.
Fertilizer fraud gets Nevadan five years
St. Louis, Mo.-Last week a U.S. district judge sentenced the founder and chairman of Earthly Mineral Solutions Inc., which bilked more than 250 investors with phony claims of recovering and processing minerals from the Mojave Desert for use as a natural fertilizer, to 60 months in prison for conspiracy to commit mail fraud. Roy Higgs, 67, of Henderson, Nev., pleaded guilty in late June. In April, co-defendant Frank Schwartz, 45, of Los Angeles, Calif., was sentenced to three years for his role in the scheme that from 2004 through 2006 sold hundreds of investors across the country approximately $18 million worth of mining claims to the desert site south of Las Vegas. Schwartz pleaded guilty in January to working for EMS and failing to report its fraudulent activities to authorities. In addition to the criminal case, Higgs, Schwartz, EMS, and Rick Lawton, the company’s former general counsel, face a civil enforcement action brought by the SEC. The Las Vegas case has been stayed pending the outcome in St. Louis. As part of his guilty pleas, Higgs agreed to resolve the SEC case. In imposing the maximum sentence allowed, Judge Stephen Limbaugh Jr. declared that he was “overwhelmed” by the scores of victim impact statements provided by the U.S. Attorney’s office, and agreed with the prosecutor that it was a “sad day” for everyone involved in the case. A 2005 news release still available on the Internet stated that Higgs acquired over 20,000 acres in a natural deposit of agriculture minerals 15 miles from Las Vegas, developed a testing and production facility, hired a team of agronomists, and using the natural minerals as a base, developed three unique products to be marketed as Minerals of the Mojave.
Yara, partners, eye Ukrainian privatization
Oslo-Yara International ASA, through a subsidiary, on Sept. 11 applied to the State Property Fund of Ukraine (SPFU) to receive documents for the tender announced by SPFU for the privatization of the Odessa Port Plant (OPP), to be held Sept. 29. Yara filed this application as a member of a consortium of Kulczyk Holding SA, representing a privately-owned investment group, and the Libyan Investment Authority (LIA), an investment fund 100 percent owned by the Libyan government. The filing is only to pre-qualify the consortium for possible participation in the tender and implies no binding obligations on any of the parties to the consortium. Should the consortium decide to participate in the tender, Yara will hold a minority position in the possible buyer of OPP. OPP owns and operates two ammonia and two urea plants in Ukraine, with combined annual capacities of approximately 1.1 million mt of ammonia and 0.9 million mt of urea. In addition, OPP owns and operates a major terminal for ammonia and urea, exporting products produced by other Ukrainian plants, as well as by some Russian plants.
LSB files registration to raise $200 M
Oklahoma City-LSB Industries, Inc. said Sept. 16 that it has filed a universal shelf registration statement on Form S-3 with the U.S. Securities and Exchange Commission. The shelf registration statement, when declared effective by the SEC, would give LSB the ability to offer and sell up to $200 million of its securities, consisting of common stock, preferred stock, debt (senior and subordinated), warrants, units, or a combination thereof. After the shelf registration becomes effective, LSB may offer and sell such securities from time to time and through one or more methods of distribution, subject to market conditions and LSB’s capital needs. The terms of any offering under the shelf registration statement would be established at the time of such offering and will be described in a prospectus supplement filed with the SEC prior to completion of the offering. Jack Golsen, chairman and CEO, stated, “We do not have immediate plans to offer or sell our securities under the registration statement. The board of directors agreed that having a shelf registration in place was prudent given the current market environment, as it provides us greater financial flexibility in the event we identify strategic opportunities that may require additional capital.”