Santiago-Sociedad Quimica y Minera de Chile S.A. (SQM) reported its seventh straight year of revenue and net income growth in 2007. The two were up 13.9 percent and 27.4 percent over 2006, respectively. Net income was $180.0 million ($6.84 per ADR) on sales of $1.19 billion, up from 2006’s $141.3 million ($5.37 per ADR) and $1.04 billion, respectively. Specialty Plant Nutrition (SPN) revenues for the year were up 15 percent to $580.8 million from 2006’s $503.1 million. SPN prices were up 9 percent. SQM had increased water soluble potassium nitrate volumes in Europe, especially Spain, as well as increased potassium nitrate volumes to China, and increased potassium and sodium nitrate sales to Latin America, particularly Brazil. SQM-wide, fourth-quarter earnings were up 50.4 percent on a 14.7 percent increase in sales. Fourth-quarter net income was $44.6 million ($1.69 per ADR) on sales of $306.2 million versus the year-ago $29.7 million ($1.13 per ADR) and $267.0 million, respectively. Fourth-quarter SPN revenues were up 15.1 percent to $143.7 million, up from the year-ago $124.8 million.
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SQM approves ratio change, delisting of ADR series
Santiago-SQM said March 3 that its board of directors has approved a ratio change for its series B ADRs. SQM also plans to voluntarily delist its series A ADRs from the New York Stock Exchange. SQM plans to modify the ratio of ordinary shares to series B ADRs from the current 10:1 to 1:1. From the perspective of the series B ADR holder, the ratio change has the same effect as a ten-for-one share split, with series B ADR holders receiving nine additional series B ADRS for every series B ADR held. There will be no change to SQM underlying ordinary shares traded on the Santiago Stock Exchange (SSE). SQM hopes the move will improve liquidity and make the company more accessible. The new ratio is slated to go into effect March 31, 2008. SQM also plans to delist its series A ADRs from the NYSE due to their low trading volume. At the end of 2007, SQM said less than 1 percent of SQM’s outstanding shares were held by series A ADR holders. The delisting is slated for March 27, 2008. Holders of series A ADRs can convert them to ordinary shares. If they have not done so within a year, the shares will be sold and the holder will be sent the proceeds. SQM said the delisting will have no impact on the ordinary shares traded on the SSE or series B ADRs. SQM said it will continue to comply with Securities Exchange Commission reporting requirements.
ABB gets $123 M contract for new SQM plant
Coya Sur, Chile-Milan-based ABB, a power and automation technology group, has won a contract worth about $123 million to design, construct, and provide automation for a new fertilizer processing plant in Chile for SQM. The order was booked during the fourth quarter of 2007. Scheduled for completion in 2010, the new plant will be located at Coya Sur, Antofagasta region, in the north part of Chile. The new plant will produce more than 1,150 mt /d of potassium nitrate and is part of SQM’s long-term plan to increase its current specialty fertilizer production capacity. ABB will provide engineering, procurement, supply of equipment and materials, construction, commissioning and startup services, as well as overall project management. In addition, ABB will provide MV/LV power distribution systems and automation based on System 800xA.
AMEC tabbed for PotashCorp Rocanville expansion
Saskatoon-AMEC PLC, the international engineering and project management company, has been awarded a new contract with Potash Corp. of Saskatchewan Inc. at the Rocanville potash mine in Saskatchewan. The four-year contract for the provision of engineering and project management services will see a US$1.8 billion expansion of the mine, enabling the production of an additional two million mt/y of potash per year. This will be achieved through the engineering and project management for a new mill as well as expansion of the site’s utilities, storage and loadout facilities. “We are pleased to have again been chosen to help PotashCorp, the world’s largest potash provider,” said Bob Stanlake, president of AMEC’s Natural Resources Mining and Metals business. “Our commitment to PotashCorp began 40 years ago and our selection shows their trust in our expertise to execute this project and further enhance their lowest cost potash production facility.”
PhosCan, Baltic shareholders approve merger
Toronto-PhosCan Chemical Corp. announced March 4 that shareholders of PhosCan have approved the arrangement between PhosCan and Baltic Resources Inc. to implement the merger originally announced on Oct. 29, 2007. Per the arrangement, PhosCan will acquire Baltic’s 50-percent interest in the Martison Phosphate Project, such that PhosCan will then hold a 100 percent interest. Shareholders also approved the election of James Gowans as a director of PhosCan, and conditional upon completion of the arrangement, the election of Donald McKinnon, Chris Hodgson and Gordon McKinnon as directors of PhosCan, and the amendment of PhosCan’s stock option plan. Baltic shareholders also approved the deal March 4. The closing of the arrangement is expected for March 10. The Martison Phosphate Project, near Hearst, Ont., entails the development of a phosphoric acid plant, utilizing the Martison phosphate deposit and sulfuric acid from Ontario base-metal smelters.
DSM to close plant in IJmuiden
Heerlen, The Netherlands-Dutch officials and DSM on March 4 announced that they have reached an agreement in principle on the termination of ammonia transport by rail between Geleen and IJmuiden. The government has been seeking to reduce the risks of hazardous transport. When these ammonia transports are terminated, the DSM Agro site in IJmuiden will lose its reason for being. DSM has therefore decided to close the site, effective Jan. 1, 2010. The government will compensate DSM for damages. The closure will result in the loss of 120 jobs. One of DSM’s nitric acid plants, which is currently located at IJmuiden, will be relocated to Geleen. DSM is exploring the possibility of expanding fertilizer production in Geleen and thus largely compensating for the loss of capacity in IJmuiden. DSM said the closure of DSM Agro in IJmuiden will have no consequences for the intended sale of DSM’s Agro business, which is part of the company’s Vision 2010.
Financing for Congo potash project eyed for 3Q
Toronto-Developers of a proposed potash project in The Republic of Congo hope to close on financing in the third quarter of 2008, with construction to commence thereafter. Toronto-based MagIndustries Inc. reports the receipt of a final feasibility study for the development of the Kouilou Potash Mine near Pointe-Noire, Republic of Congo. MagMinerals intends to build, own, and operate a stand-alone 600,000 mt/y potash mine and plant, 16 kilometers east of the Atlantic port city of Pointe-Noire, West Africa’s best deep-water port. The capital cost of the project has been estimated at US$723 million excluding financing costs, for an operation producing granular K60 grade potash. Direct and indirect operating costs, with contingency, are estimated to be $83/mt FOB Pointe-Noire. BNP Paribas, financial advisors to MagMinerals, completed the financial analysis. Based on a net realized potash price of approximately US$500/mt the first phase of the project yields an IRR of 26 percent and an NPV of US$450 million (assuming a 12 percent discount rate). The Government of Congo will retain a 10 percent free carried interest in the Kouilou Potash Mine. BNP Paribas has approached a group of international lenders who have given a strong expression of interest to debt-finance 70 percent of the project costs to bring the Kouilou Potash Project into production. MagMinerals intends to provide the required 30 percent equity. It is MagIndustries’ intent to double the first-phase capacity as soon as possible to reach total production of 1,200,000 mt/y to more fully utilize the extensive resource base available. The capital cost required to double the capacity of the plant is expected to be significantly lower than the first phase, as it will benefit from the extensive infrastructure put in place during the first-phase building. Ameropa AG has been selected to market all potash exports from the project.
Potash One commissions studies at Legacy project
Vancouver-Potash One Inc. said March 3 that it has commissioned Golder Associates Ltd. to commence engineering and environmental studies in relation to Potash One’s Legacy potash project in Saskatchewan. Phase I of this assessment program will allow the company to gather information which will direct and focus field activities, investigations and assessments. It is estimated that the initial work will be completed in approximately eight weeks. The purpose of Phase I of the EIA program is to initiate the collection of additional site-specific baseline data necessary for project planning, environmental assessment and subsequent regulatory permitting for Legacy Project. “We are pleased to have retained a strong and local engineering and environmental services group,” said Paul Matysek, Potash One president and CEO. “Golder is a premier company in Saskatchewan that has provided various services to major potash producers including Potash Corp. of Saskatchewan, Agrium and Mosaic.”
Michigan preempts local control over ag fertilizer
Lansing, Mich.-Agriculture interests are cheering final legislative passage and signing by the governor of measures preempting local governments from regulating the use of fertilizer. The bills HB 5034 and 5035 were signed Feb. 29 by Gov. Jennifer Granholm, amending a section in Michigan’s law on natural resources and environmental protection to exempt agricultural fertilizer use and application from being subject to local ordinances. “We’ve been working on this for sometime and finally got it done,” Tania Ritter, Michigan Farm Bureau manager of state government affairs, told Green Markets. She said current preemption laws apply only to the sale and distribution of agriculture fertilizer. Local control over residential and commercial usage isn’t affected for now, Ritter added, but she expects these issues to be dealt with in future sessions. Michigan Agri-Business Association President Jim Byrum commented in the press that this legislation gives Michigan agriculture clear, standardized guidelines at a time when the industry operates across multiple municipal lines. “Thanks to this legislation, Michigan agriculture can continue to make full use of new technology that minimizes fertilizer application and maximizes crop yield, while following best-management practices to protect our land and water,” Byrum declared. “We should let science, new technology and best practices drive Michigan agriculture, not a zip code or township boundary.”
Illinois gets popular new acting ag director
Springfield, Ill.-Agriculture interests are welcoming appointment of Assistant Director Tom Jennings as acting director of the Illinois Dept. of Agriculture if the reaction from the Illinois Fertilizer and Chemical Assn. (IFCA) is any indication. It’s not clear if Jennings will become the full-fledged director. But IFCA Pres. Jean Payne remarked, “We are very supportive of Tom Jennings being named acting director and we hope he has a long stint in this capacity. Tom has long experience with IDA and has been supportive and fair in dealing with issues impacting the ag input supply and grain industries. He is a friend of the IFCA and a very fair and thoughtful person with a strong streak of common sense. We wish him the best in these challenging times of budget cuts.” Jennings, who has been with the department for approximately 20 years and has been assistant director since 2003, replaces Chuck Hartke, who is retiring after a long tenure. A Springfield native, Jennings has been with the IDA since 1978, serving in a number of positions. He is a board member of the Illinois Propane Education and Research Council, a past member of the agri-business committee of the Illinois CPA Society, and current chairman of the Fertilizer Research and Education Council. Payne indicated that state budget issues may mean Jennings will be dealing soon with increasing fees for agriculture programs, including pesticide and fertilizer tonnage tax. “Illinois is $750 million in debt and revenues are not meeting budget projections,” she reported “We will also not be surprised if the administration again tries to apply the state sales tax to agricultural inputs which has been attempted three times in the last five years only to be turned back by Illinois agricultural groups like IFCA.”