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Simplot, enviro group give Pocatello City Council the pros and cons of phos mining

News, Phosphate

After J.R. Simplot Co. officials and Greater Yellowstone Coalition Idaho Director Marv Hoyt explained the pros and cons of phosphate industry mining, some Pocatello City Council members expressed their support for Simplot’s positive economic impact in Eastern Idaho. Both sides were presented during the council’s June 11 study session. The issue has been prominent recently with Simplot’s announcement that it would issue layoff notices to 114 workers at its Pocatello fertilizer plant and its Smoky Canyon phosphate mine.

The layoffs were rescinded after the Ninth U.S. Circuit Court of Appeals lifted a GYC-requested stay on preparatory work for expansion of the mine, which is the Don Plant’s sole source of 1.5 million tons of phosphate ore each year (GM June 8, p. 1). U.S. Magistrate Mikel Williams is scheduled to rule by Aug. 4 on the coalition’s overall legal challenge to the mine’s expansion in the Caribou-Targhee National Forest.

Hoyt said his coalition’s mission is to protect the 20 million acres of the Greater Yellowstone Ecosystem. Pocatello is on the edge of it, but phosphate mining is done within its borders. In 1996, the deaths of horses – and later, hundreds of sheep – in Caribou County was blamed on selenium from phosphate mines contaminating area waterways.

About 160 miles of the Blackfoot, Salt, and Bear Rivers in Eastern Idaho do not meet beneficial use standards, Hoyt said, asserting that federal agencies and phosphate companies have been “dragging their feet” on cleaning up contaminated mining sites. “I think cleanup is paramount, not study after study.”

Hoyt said the Greater Yellowstone Coalition will ask that a 45-day comment period for a new phosphate mine planned by Monsanto be lengthened to give more time to review highly technical information. He suggested Pocatello officials also should request the period be extended.

“From our perspective, we don’t oppose or support it. Our perspective is as long as there is no selenium contamination, we won’t oppose it,” Hoyt said, urging cleanup of old mine sites. “The other companies are either doing little or negotiating. It’s been 13 years and time to clean up these sites.”

When Councilman Roger Bray noted Star Valley farmers and ranchers were supplementing cattle feed with selenium and that it’s an essential part of a healthy diet, Hoyt answered, “It doesn’t take much more than a minute amount to become highly toxic.” He said it’s in the best interest of companies to clean up sites they have contaminated in the past.

Councilman Brian Underwood said he supports the efforts Simplot, Monsanto, and Agrium have made to ensure environmental safety and a strong economy. He suggested the Greater Yellowstone Coalition may need to be required to put up a $2.3 million bond like Simplot when the coalition files lawsuits that adversely affect jobs.

Lori Hamann, Simplot senior permit manager, said a Pole Canyon stream diversion program designed to minimize selenium contamination has proven successful at the Smoky Canyon Mine. She stressed that the permitting process is very cumbersome for Simplot, Agrium, and Monsanto.

The Smoky Canyon Mine expansion is up to 60 percent more protective than necessary to meet state water quality standards, Hamann said. John Bob, Simplot Don Plant manager for 1½ years, said plant employees focus on what they need to do to keep the plant a viable operation for years to come.

Dennis Facer, Smoky Canyon Mine manager, would like to continue using a special cap that has proven successful in capturing selenium in pits in expanded areas of the mine. Simplot spokesman Rick Phillips said the 550 families dependent on the Simplot plant and mine thank the city council for its support.

Agrium plans to double retail, not sell it; China negotiations could drag into Aug.

China, News

Agrium Inc. reiterated its plans to remain in the retail business last week – and to double it – even though a wire report ran the headline indicating Agrium may consider spinning off its retail business. The headline referred to remarks made by Agrium President and CEO Mike Wilson in response to a question at an Agrium Investor Day held in Baltimore June 10.

“He said no such thing, very poor reporting, entirely incorrect,” said Richard Downey, Agrium senior director, investor relations. Downey added that Wilson said retail is an integral part of the business with lots of benefits, although a spin off is always an option in the future. He said it was no different than how he always responds.

In fact, just a day earlier, Wilson told analysts at the RBC Capital Markets 2009 Global Mining and Materials Conference that Agrium plans to double its retail business within North America, with any new retail outside North America being on top of that. Wilson said the company is looking more aggressively in Canada. In addition, it is taking its Argentina model and has already moved into Chile and now into Uruguay. “Our model works very well in North America. We know we can transport it to South America. It has the potential of working in Europe and Australia. Places like Brazil, China, India, it’s not the model you’d take in.”

He added that the retail business this year has outperformed. He said while it might be off 15 percent, that is not bad considering the nutrients are off 70 percent. The company is now projecting overall phosphate and potash demand to be off 40-50 percent.

Relating to the offer for CF Industries Holdings Inc., Wilson said that when it talks to their shareholders, with the exception of one or two, they’re all saying “we want this deal to go forward, it makes sense, it’s good for CF, it’s good for Agrium, it’s better than CF’s alternatives and we’re going to support you.” “Now, at the end of the day, whether they do or don’t, it’s going to be their decision on the 22nd. If they support us, I can’t believe CF would not listen to the shareholders, the people that own the company. And if they don’t support us, we’ll leave.” Agrium has extended the expiration date of the exchange offer until 12:00 midnight, New York City time, on June 22, 2009 (GM June 8, p. 1).

As for the international potash negotiations, Wilson now says China may hold off until August. “If they start to try to hold off beyond July, they’re taking a huge risk. And that risk is when their season starts, their fall season goes, they just won’t have the product because it takes a fair amount of time. So, our view is China could hold off until July, maybe August, but we’re thinking July.”

He added that India has said they may not buy until August/September. “I’d be amazed if they do that, because that means their farmers will not have product. They only have 500,000 mt of inventory … I think there’s more pressure on India than there is on China to settle it and hopefully, we settle it at some reasonable price that both parties are happy at.”

As for NPK prices in general going forward, Wilson said there is going to be more downward pressure than upward between now and September/October. “We’re coming out of spring. We always get that. And so, you’ve got that play.” Beyond that period, he says the view switches fairly aggressively. “If corn stays at $4 and soybeans at $9-$10 … I think the farmers are going to want to buy nutrients.

“The supply chain is – with the exception of the manufacturers who are full … the PCS’s, the Mosaic’s, the CF’s, the Terra’s, the Agrium’s – the supply chain is rapidly depleting. And so, you can see the potential of a bump coming at you.”

Wilson said retailers, and to some degree Brazil, are going to buy what they have to buy and not build inventory. However, he said as they work their way through the fall and the market tightens, their purchasing will get a little more aggressive. He said Agrium is not positive about this year’s third quarter versus the past two years; however, it is very positive beyond then.

“The good news about ag is it’s this huge global commodity and the business is very large,” said Wilson. “Even in this difficult financial time, the latest view coming out of the World Food Organization was that there’s still going to be a 1.5 percent growth in grain consumption, which is below what it’s been. But, find another commodity that’s actually getting a 1.5 percent growth.”

USDA projects lower corn production

News Briefs

Washington-According to USDA’s June 10 World Agricultural Supply and Demand Estimates report, U.S. feed grains supplies for 2009/10 are projected lower, with reduced prospects for corn yields and production. Corn production for 2009/10 was projected at 11.9 billion bushels, down 155 million from last month’s estimate. Citing planting delays during May that reduced yield prospects in the Eastern Cornbelt, the report projected the national average corn yield at 153.4 bushels/acre, down 2 bu/a from last month. Corn supplies are projected at 13.6 million bushels, down 190 million bushels from 2008/09. USDA predicts that corn use for feed and residual use will reach 12.5 billion bushels, and, as a result of the reduced production estimates, will exceed production by 525 million bushels this year. Ending stocks are projected at 1.1 billion bushels, down 55 million bushels from USDA’s May estimate. The 2009/10 marketing-year average farm price was projected at $3.90 to $4.70 per bushel, up 20 cents from last month. This compares with $4.10 to $4.30 per bushel for 2008/09. USDA kept its 3.195 billion bushel projection for U.S. soybeans for the new crop, but with exports expected to reach 1.250 billion bushels for the current year, USDA said old crop ending stocks for soybeans will drop to 110 million bushels. Carryout at the end of the 2009/10 year is also projected to be at a relatively low level of 210 million bushels. USDA projected a 1.675 billion bushel crush and a 1.260 billion bushel export business, with the season average price for new crop soybeans raised to the $9 to $11 per bushel range. USDA said U.S. wheat production is down slightly, by 10 million bushels, compared to the May estimate, with total U.S. wheat production projected at 2.016 billion bushels, well under last year’s 2.5 billion bushels and slightly under the previous year. USDA noted, however, that ending wheat stocks will rise slightly because of reduced consumption. The average farmgate wheat price is estimated at $4.90 to $5.90 per bushel, 20 cents higher than May. Projected 2009/10 farm prices for sorghum, barley, and oats were also raised this month.

Aurora Cooperative eyes lots for fertilizer tanks

News Briefs, Western Cornbelt

Kearney, Neb.-Aurora Cooperative officials believe they’re about to get city approval for rezoning three residential lots with existing homes adjacent to their Kearney facility, which may sometime in the future become the location of three one-million gallon liquid fertilizer storage tanks. “We don’t know how soon that would happen,” Don Engel, Aurora sales and service coordinator, told Green Markets. “Maybe it won’t even be this year.” Engel explained that the tanks are the “general purpose” for the property adjacent to the plant that Aurora has been trying to purchase for three years and only recently got the owners to agree at the same time. And since the location is within two miles of the city it requires zoning commission approval, which Engel expected would be obtained right away. The request before the Kearney Planning Commission includes rezoning two acres from agricultural to general industrial on property about five miles east of Kearney on the south side of Highway 30. The location is near a railroad stop. Aurora Cooperative is a leading grain marketer and agricultural supplier in central Nebraska and northern Kansas.

Three dead, nearly 40 hurt in ConAgra explosion

Aurora, NC, News Briefs

Garner, N.C.-The cause of the explosion last week hasn’t been determined at ConAgra Foods Inc.’s Slim Jim plant here, where three employees were killed and nearly 40 others transported for medical attention. “There are three confirmed fatalities, and all three were employees at the plant where 300 were at work at the time,” Garner police department spokesman Sgt. Chris Clayton told Green Markets. “Twenty others were transported at first as emergency patients, and there were an additional 18 transported after other employees were screened.” Clayton said he could not confirm that ammonia, which is used for plant refrigeration, was involved in the incident, although three firefighters were transported for ammonia exposure. They were treated and released at a local hospital. There were also reports that firefighters were trying to contain a small fire and an ammonia leak several hours after the explosion. “The fire marshal’s office is the lead agency for the investigation, which has not yet begun in earnest,” Clayton explained. “The concentration right now is still on search and rescue, which is presently winding down. Once that is complete, it will be turned over to the fire marshal’s office in conjunction with the ATF.” He said ATF’s involvement is normal procedure. There was no word from the ConAgra Foods headquarters about the possible cause. A brief statement was issued from CEO Gary Rodkin expressing his sadness about the events and a promise to provide “all the support they need” for the victims and families. The company said it was setting up a fund for contributions from ConAgra Foods employees and the local community, and that employee assistance counselors would be provided for employees and their families.

Tanker spills UAN in downtown Kennett

News Briefs, UAN, Western Cornbelt

Kennett, Mo.-A tanker truck carrying about 7,500 gallons of liquid nitrogen that overturned in downtown Kennett the morning of June 8 caused the evacuation of businesses and disrupted traffic for more than four hours. Fire Chief John Mallott told Green Markets that his crews took the precautions because they weren’t sure how dangerous the contents were, even though the driver said the fertilizer was non-hazardous. “It happened in the downtown area and people rushed out of their stores,” Mallott reported. “It was across from the local newspaper office, and one of the reporters even climbed up on the truck and helped the driver out.” Because the truck wasn’t flash-carded, he explained, the highway patrol had the city offices two blocks away fax for the MSDS for urea ammonium nitrate. Mallott estimated about 1,000 gallons that came out of the tank’s dome covers got into street manholes. What remained was pumped out into another tanker. Mallott said the cause of the turnover appeared to be the left rear axle spring, which broke and caused the trailer to start rocking side-to-side and finally tipped over the whole rig. Two large tow truckers were brought in to upright the tanker and tow it away. Authorities decided the mishap was because of vehicle malfunction, and no citations were issued. Mallott explained that the tanker ended up in the downtown area because the highway extends through the middle of town, bringing in what he described as “a lot of farm community traffic going back and forth.” He said he planned to talk with state officials to make some changes.

Oregon utility adds Ostara fertilizer system

News Briefs, Pacific N.W.

Portland, Ore.-Clean Water Services, a water resource management utility serving more than 500,000 customers in urban Washington County west of Portland, last month began operating the first commercial system utilizing Ostara Nutrient Recovery Technologies system, which recovers phosphorus and other nutrients from wastewater and recycles them into high-quality fertilizer. Clean Water spokesman Mark Jockers said the occasion will be marked by a formal opening and unveiling and a media tour attended by Oregon Gov. Ted Kulongoski and Robert F. Kennedy Jr., an Ostara board member, on June 10. Jockers said Clean Water anticipates the $2.5 million capital cost of incorporating this technology into its treatment process will be recovered within five years from a combination of cost savings and Crystal Green revenues of approximately $500,000 per year. Cost savings included reduced energy, chemical, and transportation costs. Ostara of Vancouver B.C. describes its Crystal Green fertilizer for park and golf course turf growers, commercial nurseries, and specialty agricultural markets as a slow-release product that creates no greenhouse gas emissions and does not leach into and pollute the water table.

Viterra employees vote against union membership

Canada, News Briefs

Calgary-Viterra Inc. reports that an overwhelming 81.4 percent of Manitoba employees who were eligible to cast their ballots in a secret mail-in representation vote favored a direct working relationship with the company over Grain Services Union (GSU) representation. The GSU has been campaigning to represent employees in Manitoba since the combination of Viterra’s former companies – Saskatchewan Wheat Pool Inc. and Agricore United – in May 2007. The Canada Industrial Relations Board (CIRB) ordered a vote earlier this spring, setting June 8th at 4:30 p.m. as the deadline for the receipt of ballots. Of the 200 employees eligible to vote, 183 cast a ballot. Manitoba employees who participated in the vote included those working in country operations and maintenance roles, with the exception of employees in Brandon, Boissevain, Carman, Coulter, and the Winnipeg office. Some Viterra work units went on strike last year, with the last being settled in September (GM Sept. 21, 2008).

Canadian research turns pulp into fertilizer

Canada, News Briefs

Fredericton, N.B.-A soil and land resource scientist with Agriculture and Agri-Food Canada is working on turning pulp residue from pulp and paper mills into fertilizer. “We’re sitting on a gold mine here, in my opinion,” declared Sherif Fahmy, talking about the thousands of tons of pulp waste that ends up in landfills. His research over the last 11 years testing the effects of pulp residue on legume, potato, and grain growth has found that such wastes as sawdust, bark, and effluent from pulp and paper mills improved water retention in the soil, prevented erosion, and increased organic content, while at the same time boosting crop yield. Because of Fahmy’s research, Envirem Technologies Inc. of New Brunswick, which specializes in industrial and organic waste recycling, is using forestry residuals to produce commercial composts as a fertilizer replacement. “It’s a very clean, single product, that you can use to develop high quality composting and additives for potting soils and top soils,” says Envirem General Manager Bob Kiely. At the same time, the Canadian government is putting up $1.6 million to help with the construction of an anaerobic digestion facility at Leamington, Ont., to transform agricultural waste from local farms, greenhouses, and processing plants into electricity and fertilizer. Seacliff Energy Inc., which will use the federal repayable funding to install the digester, said the facility, which generates methane to power electrical turbines and generates waste residue for fertilizer, will be up and running this fall. It will create 10 jobs during construction, plus three full-time and one part-time during operation. Chatham-Kent-Essez MP Dave Van Kesteren said Ottawa hopes the project will pave the way for similar facilities to be introduced into individual farms and local communities. There are 10,000 acres of greenhouses and five major food process plants within 50-km.

Simplot seeks air permit modification

News Briefs, Pacific N.W.

Boise-The J.R. Simplot Co. has requested that the Idaho Department of Environmental Quality allow it to modify the air quality permit for its No. 300 sulfuric acid plant west of Pocatello by replacing its 1,750 tons per day production limit with an annual production limit of 640,000 tons per year. Simplot officials say that modification would provide for improved operational flexibility at its Don Plant, an integrated fertilizer manufacturing complex that produces nitrogen, phosphate, and sulfate commercial products. The sulfuric acid plant is equipped with a scrubber system that recovers unconverted sulfur dioxide. Simplot was given a permit to construct in September 1996 and a subsequent permit in June 2001 for modifications to the plant. The 1996 permit established an annual production limit of 640,000 tons per year. The 2001 permit replaced the annual limit with the short-term limit of 1,750 tons per day. In June 2006, Simplot submitted an application requesting deletion of the short-term limit. A draft permit was issued for the proposed permit revision in March 2008. Simplot subsequently withdrew its application, and a final permit to construct was never issued. “Replacement of the 1,750 ton per day production limit with a 12-month rolling total limit could result in an incremental increase in actual production and an insignificant increase in emissions from the No. 300 Plant and other affected emissions units,” Simplot’s request states. A public comment period on the modified permit will be provided if a written request is submitted to IDEQ by 5 p.m. Tuesday, June 23, MDT.