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New Lange-Stegmann terminal nearly ready for use

Featured, News

Lange-Stegmann Co. plans to start moving product into its new 122,000 square foot fertilizer terminal in St. Louis in a couple of weeks, according to Mike Stegmann, company president, who said the riverfront facility was built to respond to the needs created by increases in imports. “We’re importing more nitrogen and we recognized the infrastructure is not in place to warehouse and handle the transloading,” Stegmann told Green Markets. “We’re in a very unique situation (in this respect) being served by two railroads and having year-around ice-free waterway access (enabling shipment all over the country).”

Underway in early March and substantially completed in October, the St. Louis project is big by almost every measure. The main warehouse is large enough to hold two football fields and, reported Stegmann, is designed for increasing capacity at a very low cost. It already contains 63,000 tons of storage capacity in 15 bins varying in size from 1,000 to 20,000 tons. The loading capability for truck and train is 360 tons per hour or 8,600 tons daily. The rail yard consists of 23,000 feet of track, with three locomotives and truck and rail scales onsite.

Construction of the facility – one of the largest, if not the largest, of its type in the country, with the capability of holding 65,000 tons of urea – was under the direction of Marcus Construction, and won a local award for its approach to dealing with riverfront soil conditions.

Other tenants will include Agrium Inc., Koch Nitrogen Co., Transammonia, and Dearing Ag Sales.

Stegmann described the undertaking as actually two separate but interconnected projects. “The first is the St. Louis urea center built for Lange-Stegmann to facilitate the transloading of urea from the river to rail with an emphasis on unit train loading,” he reported. “All of the equipment is designed to be sped up in the future to meet stricter train requirements that are anticipated from the railroads.”

He said the second project is the stabilized nitrogen technology granular production center, a traditional granulation plant using falling curtain technology, which was built for Agrotain International. It is connected by conveyor systems to the main warehouse and is designed to make a variety of urea products. “This is the first granulation plant built in the U.S. in many years, we believe at least 10 and possibly more,” he noted. “The plant will also have the ability to produce specially sized urea products to the T & O markets and other specialty markets.” Stegmann added that existing facilities have been upgraded to enable 24-hour operations and allow four barges or 6,000 tons to be unloaded daily.

Farm sector gives Deere another record year; Lesco expenses impact results

News

Deere & Co., Moline, Ill., enjoyed its fourth successive year of record results, attributing it mainly to the growth in the global farm economy since results were all weaker in its construction, forestry, commercial, and consumer (C&C) sectors –
all due to the downturn in the U.S. housing market.

Deere reported net income of $1.82 billion ($8.01 per diluted share) on sales of $24.1 billion for the year ending Oct. 31, 2007, versus the prior year’s $1.7 billion ($7.18 per share) on sales of $22.1 billion. Fourth-quarter net income was $422 million ($1.88 per share) on sales of $6.1 billion, up from the year-ago $277 million ($1.20 per share) and $5.1 billion, respectively. Earnings per share figures do not reflect the recently approved two-for-one stock split. The split, in the form of a 100 percent stock dividend on Dec. 3 to holders of record Nov. 26, 2007, was approved by shareholders earlier in November.

Ag equipment sales were up 35 percent for the quarter and 18 percent for the year. Driven by continued strength in the farm sector, worldwide sales of Deere ag equipment is expected to increase 17 percent for 2008. Farm machinery sales to the U.S. and Canada are expected to be up 10-15 percent due to a substantial jump in farm income. Large tractors and combines are expected to pace the sales improvement, while cotton picker sales are expected to be off. Sales into Western Europe are expected to be flat, with greater demand expected from Eastern Europe and Russia. South American sales are expected to be up 10-15 percent, though Deere is concerned over uncertainties over the status of government-backed financing programs.

The commercial and consumer section, which includes Lesco, had an operating loss of $11 million for the fourth quarter, versus the year-ago loss of $3 million. For the year, C&C saw better results with operating profit of $304 million on sales of $4.33 billion, versus the year-ago $221 million and $3.9 billion. C&C sales were up 35 percent for the quarter and 12 percent for the year. Of this, Lesco accounted for 29 percentage points of the quarter’s increase and 9 for the full year. However, higher selling and general administrative costs associated with Lesco impacted profits.

Deere expects C&C equipment sales to be up 10 percent in 2008, including 8 percentage points from a full year of Lesco sales.

Sales in Deere’s forestry and construction sector was off 11 percent in the fourth quarter and 13 percent for the year. Deere expects these to remain under pressure in 2008 with a continuing slump in housing starts.

MagMinerals gives more details on potash project

News, Potash

MagMinerals Inc., a unit of MagIndustries Corp., Toronto, has received a resource report for its Kouilou Potash Project in the Congo. The report identifies measured, indicated, and inferred carnallite resources within MagMinerals’ 2200 square kilometer Makola license that compliment the final feasibility study currently nearing completion.

Carnallite is a mineral best described as a magnesium-potassium-chloride, or a double-salt with the chemical formula KMgCl36H2O. The carnallite occurs in multiple, horizontal horizons ranging in thickness from 0.5 metres to 24 metres, with an average content of about 70 percent carnallite. Four horizons, located between 400m and 800m below the surface, have been considered for commercial development.

MagMinerals intends to build, own, and operate a stand-alone potash plant 16 kilometers east of the Atlantic port city of Pointe-Noire, Republic of Congo.

The company says the measured resources amount to 104.6 million mt of carnallitite with an average grade of 17.5 percent KCl, representing 18.3 million mt of KCl. The indicated resources amount to 17.4 million mt of carnallitite at an average of 19.5 percent KCl, representing 3.4 million mt of KCl. The inferred resources amount to 1.07 billion mt of carnallitite at an average of 17.3 percent KCl, representing 185.9 million mt of KCl.

Ercosplan Ingenieurgesellschaft Geotechnik und Bergbau mbH (Ercosplan), formerly the East German Potash Consortium, authored the report.

The measured and indicated resources are sufficient for over 36 years worth of production for the first phase of the Kouilou project, which has been designed as a 580,000 mt/y, single train potash plant, according to the company. The plant is based on a modular design. It is the intention of MagMinerals to double the first phase capacity to reach a total of 1,200,000 mt/y in order to more fully utilize the extensive resource base available. A copy of the full Report may be obtained under MagIndustries’ profile on www.sedar.com, or on its website at www.magindustries.com.

The company expects the product output will be mostly granular KCl, which will be directed primarily to target markets in South Africa, Brazil, and Europe. The Kouilou Plant is expected to be commissioned by late 2010, with first shipments in early 2011.

It should be noted that the feasibility study has not yet been completed, and there is therefore no certainty the proposed operations will be economically viable.

MagMinerals intends to build the plant with the support of several leading international companies. SNC-Lavalin International Inc. is actively working toward the completion of the overall feasibility study, which is expected to be delivered to MagMinerals in the first quarter of 2008.

Consolidated Contractors International Company S.A.L. has been retained as general contractors for the construction of the project and to assist SNC with the completion of detailed capital cost estimates.

HPD LLC has been selected to design and provide key equipment for a brine concentration system and a multi-stage crystallization system to produce potassium chloride.

MagMinerals has entered into a preliminary agreement with Ameropa AG, who has indicated their ability to market 100 percent of the potash production. A definitive marketing agreement is in the final stages of negotiation. The marketing agreement will also support a debt finance package proposed to cover 70 percent of the plant’s capital costs.

BNP Paribas are advisors to MagMinerals with respect to this debt financing, which is expected to include a number of international financial institutions.

MagMinerals expects its project to be the only green-field potash supplier to come into production in the next five years. Factors contributing to MagMinerals’ expected cost competitiveness include low-cost solution mining methods (generally estimated at 25-40 percent lower capital costs than conventional underground mining), abundant low-cost natural gas, and existing infrastructure such as rail lines and proximity to existing port facilities.

The company notes that from Pointe Noire the shipping time to Brazil, one of the world’s largest importers of potash, is less than half that of other major suppliers. MagMinerals should also be the lowest cost supplier to West Africa and South Africa, and have very competitive rates to Southern Europe and North Africa. Current potash prices in Brazil are in the range of US$350/mt. Spot prices worldwide have recently been quoted at $400/mt.

Sarasota County rejects deal to end mining dispute

Florida, News Briefs

Sarasota-The Sarasota County, Fla., Commission voted 3-2 on Nov. 27 not to continue negotiating with The Mosaic Co. on an agreement to end opposition to the company’s mining plans in exchange for stricter environmental requirements. The commission left it up to Mosaic to approach it on continuing negotiations to reach a final agreement. Mosaic spokesman David Townsend said the following day that the company was in the process of restarting talks with the county. Townsend said the Sarasota Commission was split, with two members strongly for and two strongly against the proposal, so efforts must be made to convince the swing commissioner. He pointed out that a week earlier Charlotte County, which has led the financial battle against advancing phosphate mining, approved the deal by a 4-1 vote. Charlotte has spent approximately $10 million to litigate against mining plans in recent years. In exchange for providing guarantees of stricter environmental practices in developing mines in Southwest Florida, the agreement called for the counties to not protest the permits Mosaic seeks for the next 15 years. In order for the deal to take effect, Lee County and the Peace River/ManaSota Regional Water Supply Authority, as well as Charlotte and Sarasota counties, must give their approval. Lee County may consider voting on the agreement sometime in December or January, but no date has been set by the water supply authority.

ConAgra settles on fine for nitrogen spill

News Briefs, Nitrogen, Western Cornbelt

Lincoln. Neb.-ConAgra Foods Inc. has agreed to pay a $40,000 civil penalty and donate another $40,000 to an environmental project to resolve issues stemming from an accidental spill of 3,800 gallons of liquid nitrogen fertilizer from a railcar at the company’s Hastings, Neb., plant in January 2006, according to an announcement by Nebraska Attorney General Jon Bruning. Bruning said the fine will go to the Nebraska Common Schools Fund, and half the amount will be waived if ConAgra maintains compliance with a Department of Environmental Quality consent decree for 180 days. The donation will go to the Attorney General’s Environmental Protection Fund. “Nebraska’s environment must be protected,” Bruning remarked. “We appreciate ConAgra’s quick response in cleaning up the spill.” He noted that ConAgra responded immediately to the spill, provided notification to both the NDEQ and EPA, and worked quickly to contain the spill and minimize environmental impact.

Mosaic settles contract with New Wales union

Florida, News Briefs

Bartow, Fla.-The Mosaic Co. has reached an agreement with the union representing employees at its New Wales phosphate processing plant in Central Florida, avoiding a potential strike, according to a Mosaic spokesman. Avoiding the strike was especially important to the company considering the high price of phosphates and the shortage of worldwide supply. The agreement will provide workers with a 3 percent increase in wages each year for the next three years and a new pension plan, but will put a cap on the contribution to the employees’ health care plan, the spokesman said. The pension plan would become a voluntary 401K type, rather than the existing defined benefit plan. Essentially, the company gave in somewhat to the higher pay rates and the pension plan, while the union moved more in the direction the company sought for medical costs, the spokesman said.

Crash spills ammonium nitrate, diesel in W.Va.

Ammonium Nitrate, News Briefs, Southeast

Charleston, W.Va.-A tanker truck on its way to a strip coal mine spilled half or more of 20 tons of ammonium nitrate and 400 gallons of diesel fuel loaded on the front when it went out of control and overturned on a state road near here about 8:30 a.m. Nov. 27. A command center coordinated emergency responders from the State Dept. of Transportation, state police, county sheriff, fire department, and a chemical cleanup company, who converged on the scene in reaction to the danger of an explosion. “Luckily most of the diesel went into a local stream where heavy rain the night before had raised the water level. So most of the diesel got carried away,” State Director of Emergency Operations Chuck Runyon told Green Markets. “There was a little on the ground which got mixed with the ammonium nitrate, but we soaked it up. And we all breathed a sight of relief.” Runyon said the 10 or 11 tons of ammonium nitrate that got dumped on the highway were cleaned up by a vacuum truck and probably hauled to the mine for use there. Environmental crews monitoring the diesel fuel downstream didn’t detect any problems. The highway was closed most of the day to traffic, but everything was back to normal by 6 p.m. Runyon said he believed the driver was speeding when he lost control and overcorrected, hitting a rock hillside and overturning. The impact broke open the tanks, but the driver was not injured. He received a citation for failure to maintain control of his vehicle.

CHS reports $750.3 M net income for Fiscal 2007

News Briefs, Northern Plains

St. Paul-CHS Inc. reported record net income of $750.3 million on revenues of $17.2 billion for the year ending Aug. 31, 2007, versus the prior year’s $490.3 million and $14.4 billion, respectively. Fourth-quarter earnings were $294 million on revenues of $5 billion, versus the year-ago $159.3 million and $4 billion, respectively. In 2008, CHS expects a record cash return to its patrons. In 2007 it returned $253 million in the form of cash patronage, equity redemptions, preferred stock, and dividends. For the year, CHS reported strong performance from all operating units, with refined fuels leading the way. Ag business earnings were up for the year at $118.3 million from the year-ago $91.7 million, though they were off for the quarter at $10.3 million from $24.5 million.

LOL sees improved 3Q performance

News Briefs, Northern Plains

Arden Hills, Minn.-Land O’ Lakes Inc. reported a loss of $2.7 million on sales of $2.1 billion for the third quarter ending Sept. 30, 2007, versus a year-ago loss of $16.7 million and sales of $1.5 million. The third quarter is traditionally a slow quarter for LOL. For the first nine months, net income was $156.6 million on sales of $6.3 billion, versus the year-ago $44.2 million and $5.2 billion. LOL reported that its agronomy business had $49.1 million in pretax earnings for the first nine months, up from the year-ago $28.1 million. Those earnings were generated primarily though the company’s 50 percent stake in Agriliance LLC, which was substantially repositioned Sept. 1, 2007. Agronomy reported a pretax loss of $6.2 million for the quarter, versus a year-ago $3.9 million pretax loss. LOL reported $94 million in crop protection sales through its Winfield Solutions LLC business since the Sept. 1 repositioning of Agriliance’s crop protection business to Winfield.