Riyadh-The Saudi Arabian Mining Co., Ma’aden, has announced its intention to sell 50 percent of its shares, comprising 462,500,000 shares, via an initial public offering at the beginning of July 2008. The price of SR20 (US$5.33) per share, made up of SR10 as nominal value and SR10 as a premium, has been set. A proportion of these shares will be made available to investment funds and licensed individuals. The shares will be available between July 5-July 11. Ma’aden’s President and CEO, Dr. Abdallah Dabbagh, said the allocation to retail subscribers will take place in two stages. In the first stage, each subscriber will get a minimum of 25 shares. During the second stage, up to 2000 shares will be allocated to subscribers who have applied for more than 25 shares as long as the total shares allocated do not exceed total shares offered to retail subscribers. The balance of the offer shares, if available, will be allocated on a pro-rata basis. Before the IPO Ma’aden will publish a prospectus for investors containing company information. It will also contain the share price, financial statements, and other information about the company, its activities, and management. Dr. Dabbagh said the decision to offer shares was taken to fulfill the company’s expansion strategy and broaden its ownership base among the Saudi public. Ma’aden has started construction of a $5.5 billion world-scale complex to manufacture phosphate fertilizer. The company is also involved in other mineral projects. Ma’aden noted that the offering will be the largest floatation in the region’s minerals sector and the first of its kind in Saudi Arabia. Ma’aden, established as a Saudi Arabian joint stock company in March 1997, is currently owned 100 percent by the government. Its purpose is to facilitate the development of Saudi Arabia’s non-petroleum mineral resources and to help diversify the Kingdom’s economy away from the petroleum and petrochemical sectors.
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Canpotex to nearly double port capacity
Saskatoon-Canpotex Ltd. announced plans June 24 for two west coast terminal projects that will add approximately 11 million mt of annual potash shipping capacity to its current 12 million mt by the end of 2012. The projects include a new greenfield terminal on Ridley Island near Prince Rupert, B.C., and a brownfield terminal expansion adjacent to Neptune Bulk Terminals (Canada) Ltd. in North Vancouver, B.C. The combined cost of these projects is expected to be in excess of C$500 million. Both projects are subject to the finalization of acceptable agreements with the respective Port authorities and other stakeholders. “These projects are essential and strategic steps in preparing for long-term growth in global potash demand,” said Canpotex President and CEO Steven Dechka. “With Canpotex shareholders working to significantly increase production over the next several years, we have a responsibility to build on our long-term ability to deliver this essential nutrient to offshore markets. In addition to increasing shipping capacity, the terminals will provide access to the fastest shipping routes to certain key offshore markets such as China. We look forward to the opportunity to better serve our customers.” Canpotex was mulling its options for a new terminal back in May (GM May 26, p. 12). Canpotex, which also has a terminal in Portland, Ore., is the offshore marketing company owned by the three Saskatchewan potash producing companies – Agrium Inc.; Mosaic Canada Crop Nutrition LP, a unit of The Mosaic Co.; and PotashCorp.
Orica approves Bontang ammonium nitrate plant
Melbourne, Australia-Orica Limited reports that it has approved the establishment of a 300,000 mt/y ammonium nitrate plant in Bontang, East Kalimantan, Indonesia. The estimated capital cost of the investment is likely to be approximately US$550 million. Orica says the new plant complements its existing strong market position and enables it to participate in and support the further growth of the Indonesian mining industry. The investment will be made through Orica’s joint venture company, PT Kaltim Nitrate Indonesia.
CHS, Triangle Ag form jv; new fert plant in works
St. Paul, Minn.-CHS Inc. said June 24 that it has formed a joint venture with Triangle Ag LLC, Ulen, Minn. Under the jv, CHS and Triangle Ag will combine agronomy services throughout central and east central North Dakota, including construction of a 25,000 st crop nutrients plant with the ability to receive 110-rail car shipments near Hannaford, N.D. A crop protection product and seed distribution center will also be part of the joint venture. “We look forward to partnering with Triangle Ag to provide producers in the area with a consistent long-term crop nutrients supply and efficient operations,” said John McEnroe, senior vice president, CHS Country Operations. “With a significant amount of crop nutrients supply coming from off-shore locations, we need to be able to quickly, efficiently and economically move product to producers.” “Consolidating operations will eliminate duplication of assets and add efficiency for producers,” said Wes Roll, general manager and chief operating officer, Triangle Ag LLC. “This partnership will help us adapt to the dynamic and changing crop nutrients industry, while giving us the ability to ensure supply for our producers.” Construction of the crop nutrients facility is expected to begin following the required permitting process. Plans call for the plant to be completed by spring 2009. Financial terms were not disclosed.
CVR Energy offers notes; shareholders offer stock
Sugar Land, Texas-CVR Energy Inc. said June 19 that it has filed registration documents with the SEC for a proposed offering of $125 million aggregate principal amount of CVR Energy’s convertible senior notes due 2013. CVR may sell up to an additional $18.75 million in notes to its underwriters. The net proceeds will be used for general corporate purposes. CVR also announced that documents have been filed to sell 10 million shares of common stock by certain CVR shareholders, with another 1.5 million shares possible to underwriters. The selling shareholders include affiliates of Goldman, Sachs & Co. and Kelso & Co. LP, CVR’s largest shareholders, and the company’s chairman and CEO. CVR will receive no proceeds from these stock offerings. CVR Energy recently pulled plans to sell shares in its fertilizer assets as a separate company (GM June 23, p. 14).
Growmark fined C$80,000 over worker injury
Brockville, Ont.-Growmark Inc., a Mississauga-based inter-regional co-op that provides fertilizer to local farming co-ops, pleaded guilty and was fined $80,000 in the Ontario Court of Justice June 17 in connection with an injury to a worker Nov. 23, 2006. Justice of the Peace Luc Guindon heard statements that two workers and a supervisor were employed by Growmark at a fertilizer storage facility in Kemptville. It had been leased to another co-op for a number of years, and its physical condition had deteriorated. Growmark made some efforts to address the equipment and structural deterioration when it took over the facility in the fall of 2005, but hazardous conditions remained. On the day of the incident, a load of urea arrived and was being moved into a silo via a conveying system. A worker who noticed raw material spilling out of the top of the silo climbed stairs and ladders and walked along a catwalk adjacent to the conveyor to investigate. The worker tripped on an object on the catwalk, causing him to fall onto the moving conveyor, which resulted in an arm being pulled into an in-running nip point. The worker suffered facial and soft tissue arm injuries. A Ministry of Labor investigation found that the condition of the catwalk was not in compliance with section 11(a)(ii) of Ontario Regulation 851/90, contrary to section 25(1)(c) of the Occupational Health and Safety Act. In addition to the fine, the court imposed a 25 percent victim fine surcharge on the total, as required by the Provincial Offences Act. The surcharge is credited to a special provincial government fund to assist victims of crime.
The Andersons cite fertilizer for guidance upgrade
Maumee, Ohio-The Andersons Inc. said June 26 that it expects its full-year earnings per share to exceed previous guidance. The full-year 2008 guidance will be within the range of $4.40 and $4.80 per diluted share, up from the previous estimate of $3.65 to $4.00 per diluted share. The increase is primarily due to improved performance of the Plant Nutrient Group. The company’s earnings per diluted share for 2007 were $3.75, which set a company record. “Our team has performed tremendously so far this year, providing excellent service to our customers in a very challenging environment,” says CEO Mike Anderson. “We are off to a great start in the first half of the year, however we are cognizant that weather and other factors impacting the commodities markets may affect our second-half results.”
Bunge upgrades guidance, to acquire Corn Products
White Plains, N.Y.-Bunge Ltd. said June 23 that it is increasing its 2008 full-year earnings guidance from $7.10 to $7.40 per share to $9.35 to $9.65 per share. The increase is attributed to better-than-expected performance in Bunge’s agribusiness and fertilizer segments. “We continue to benefit from good fundamentals in our core markets. Despite the higher commodity prices, customer demand has been firm,” said Jacqualyn Fouse, CFO. “Generally oilseed processing margins are strong around the world and high international fertilizer prices are benefiting margins in our fertilizer business.” In other news last week, Bunge announced that it will acquire Corn Products International Inc. in an all-stock transaction valued at approximately $4.8 billion, including assumption of $414 million in debt. Corn Products stockholders will receive common shares of Bunge with a market value of $56.00 for each share of Corn Products common stock that they own, subject to adjustment. Following the closing of the transaction, Corn Products stockholders will own approximately 21% of Bunge’s fully diluted shares. Bunge said Corn Products is the leading pure-play franchise in corn refining and will add higher-margin starch and sweetener products to Bunge’s product portfolio, expanding operations in important growth markets and diversifying the revenue stream with a solid cash flow business. Upon closing, Corn Products will become a wholly-owned subsidiary of Bunge. Neither company expects the closure of any industrial facilities as a result of this deal. After closing, Corn Products will maintain its operational headquarters in Westchester, Ill., and continue to use the Corn Products brand name. In 2007, Bunge reported net income of $778 million and generated total segment EBIT of $1,230 million. During the same period, Corn Products reported net income of $198 million and operating income of $347 million.
More Viterra workers vote to strike
Regina-Viterra Inc. said June 20 the Grain Services Union (GSU) has released the results of a vote by members in the Saskatchewan Maintenance and Operations units, suggesting the GSU has received a slight majority in favor of a strike. For further clarity, Viterra has requested the breakdown between Saskatchewan Maintenance and Operations given that they are separate bargaining units. Viterra said GSU’s announcement indicated that 57 percent of the employees in Saskatchewan’s Maintenance and Operations Units voted against the company’s offer, and that 80 percent of eligible employees participated in the vote. The company is seeking further details. For now, Viterra says it is business as usual. The offer is the same one that was overwhelmingly endorsed by unionized employees in Manitoba and Alberta (GM June 23, p. 12). The union representing some 194 office workers in Regina has also voted to strike, with Viterra saying the earliest date they could strike would be July 7.
Cloudbreak eyes potash on Alberta/Sask border
Vancouver-Cloudbreak Resources Ltd. said June 23 that it has applied for a number of metallic mineral permits from the Department of Alberta Energy, Mineral Development Division, in the Vermillion area on the Alberta-Saskatchewan border, which will include the rights to subsurface potash totaling 774,282 acres. Cloudbreak cites a 1966 mineral assessment that says the area has geological and basinal effects closely related to the potash-rich areas of Esterhazy, Saskatoon, and Unity.