Saint John, NB — Atlantic Potash Corp. said Feb. 25 that it plans to construct a specialty fertilizer production facility in Saint John. The facility would be developed on approximately 100 acres of land in McAllister Industrial Park and is expected to cost C$350 million, creating over 1,200 jobs during construction. It is anticipated that once operational, the facility would generate over 1,300 jobs, more than $40 million in wages and salaries, approximately $344 million in expenditures, and $4 million in municipal taxes annually. “Global demand for fertilizer is growing quickly,” said Keith Attoe, Atlantic Potash Corp. director. “Our plan with this new facility is to produce and export 380,000 tons annually of the highest quality fertilizers from Saint John to buyers in markets including Europe and South America.” The proposed facility would produce three potash-based specialty fertilizers, which include urea, potassium nitrate, and ammonium chloride. Potash would be supplied locally and imported to the fertilizer production facility. The next 24 months will see Atlantic Potash undertaking mandatory regulatory approval processes. Construction is anticipated to be completed approximately two years thereafter. Production is expected in 2017. In the meantime, the company is in the midst of exploration and development of the Millstream potash project near Sussex. However, the new facility at Saint John is not contingent on this project being developed, as the company believes it can source potash elsewhere.
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Correction regarding JDC Phosphate
Ft. Meade, Fla. — JDC Phosphate’s new phosphate production technology does use water for cooling, contrary to last week’s news item (GM Feb. 25, p. 10). However, the process does not discharge water, according to the company. Also, going forward, the company is envisioning a production plant for commercial applications of 200,000 tons of P205, not phosphate rock.
Agrium releases proxy circular
Agrium Inc. said today that it has commenced mailing its Proxy Circular in advance of the Annual General Meeting of Shareholders that will take place in Calgary, Alberta on April 9, 2013.
The proxy circular includes a letter to Agrium shareholders from Board Chair Victor Zaleschuk, as well as detailed reasons why Agrium shareholders should vote for Agrium’s board slate.
"This is a simple choice between Agrium’s highly successful strategy that has delivered two consecutive years of record financial results and generated a 467 percent shareholder return since 2005, versus Jana Partners’ ill-conceived scheme to break up the company and take other actions that will destroy shareholder value," said Zaleschuk. "Agrium shareholders need to act today to protect the value of their investment by voting for Agrium’s board nominees."
Agrium said Jana’s vision is to abandon Agrium’s current strategy, break itself into three small pieces, and take other actions that will destroy shareholder value.
Agrium also suggests that Jana’s five board nominees are bought and paid for. “It is important to note that Jana’s dissident nominees have agreed to accept special incentive payments from Jana for serving on Agrium’s board,” Agrium said. “These payments are structured to incentivize short-term actions, even if they are taken at the expense of greater long-term value. This kind of "golden leash" arrangement is unheard of in Canada and raises serious questions about the independence of Jana’s nominees, and their ability to act in the best interests of all shareholders.”
“Jana’s campaign isn’t about corporate governance, operating performance, or board experience,” said Agrium. “It is a Trojan Horse tactic aimed at securing board seats that Jana can then use to further its agenda of breaking up Agrium.”
Rentech makes R&D cuts
Rentech Inc. today announced major cuts in its energy research and development business, as the company continues to focus on other energy businesses as well as its profitable nitrogen business. Rentech plans to cease operations, reduce staffing, mothball its research and development (R&D) Product Demonstration Unit (PDU), in Commerce City, Colo., and to eliminate all related R&D activities. The company’s strategy is focused on more immediate growth opportunities within the energy industry that do not rely on new technologies.
“We are grateful to our employees for their dedication and tremendous effort to successfully develop innovative and workable technologies for alternative energy production,” said D. Hunt Ramsbottom, President and CEO, of Rentech. “While our elimination of these positions is a difficult decision, today’s actions will further position Rentech to drive value for shareholders by cutting R&D spending and focusing on businesses that generate strong returns, with ready markets, and certainty of revenue. The investments we are considering have either immediate or near-term profitability, and will meet our disciplined investment criteria. Our success in growing Rentech Nitrogen and generating attractive returns from that business is the best example to date of the disciplined investment approach that we will follow as we consider additional investments.”
As a result of these changes, Rentech will eliminate 65 employee and contractor positions in the company’s alternative energy segment during the first half of 2013. In addition, Rentech will attempt to sell the PDU as well as approximately 450 acres of land in Natchez, MS it acquired for the development of an alternative energy facility. Rentech expects to incur a one-time non-cash impairment charge to intangible assets related to its technology of approximately $16 million, in its financial statements for the period ended December 31, 2012.
Due to the PDU closing, Rentech expects expenses related to its research activities, facilities, and its technologies to decline from approximately $21 million in 2012 to approximately $10 million in 2013, which is consistent with the Company’s previous guidance. The 2013 expenses will be for final R&D activities, including completion of the U.S. Department of Energy Integrated Biorefinery (IBR) project grant requirements, winding down and de-commissioning the PDU, employee severance, site maintenance, insurance, preservation of patents and a small group of remaining employees.
Approximately $5 million of these 2013 expenses are anticipated to be classified as selling, general and administrative (SG&A) expenses, beginning in the second quarter as the Company cuts its R&D activities. The Company has no plans to incur R&D expenses in 2014. SG&A expenses related to the Commerce City site, technology maintenance and personnel are expected to be at an annualized run rate of $2-3 million by the end of 2013. Any ongoing costs would be to protect patents covering Rentech’s alternative energy technologies, to maintain the Commerce City site if efforts to sell the site are unsuccessful or to continue low-cost efforts to seek partners who would provide funding to deploy its technologies.
Rentech intends to focus on new businesses that meet the following criteria: unlevered, after-tax returns in the mid-teens or higher; certainty of revenue with long-term contracts for off-take, providing stability of cash flows; reliance upon demonstrated technologies; and leverage Rentech’s expertise. Rentech expects to make an announcement setting forth its next steps within the coming months.
OVR advances Indiana N project
Ohio Valley Resources LLC’s air quality permit for its proposed nitrogen plant Indiana went out for 30-days of public comment today. If no major problems are alleged, the permit could be issued in as little as 45-days, thereby setting the wheels in motion for OVR to firm up deals with contractors, financiers, and potential investors.
“The publication of the draft permit is a significant milestone for OVR and for the domestic nitrogen industry as a whole,” said OVR President and CEO Doug Wilson. “To my knowledge, our air permit would be the first issued to a greenfield project in more than a quarter of a century. I have many people to thank today for their efforts in assisting OVR in accomplishing this feat, including the Indiana Department of Environmental Management and KBR. IDEM has been efficient and cooperative throughout this process and has confirmed the trust that I had in investing millions of dollars in the State of Indiana. KBR has been our strategic partner in this process almost from the start. We look forward to finalizing our construction arrangements with them in conjunction with our efforts to finalize our sources of funding. We are in the midst of negotiating with several groups to provide the funding for this project and hope to have commitments from these parties shortly."
A competing project in Indiana by Pakistan’s Fatima Group remains suspended due to that company’s less than cooperative participation with U.S. authorities in thwarting its calcium ammonium nitrate from getting to terrorists.
Fatima project still on hold
The Fatima Group’s plans to build a large nitrogen plant in Indiana are still on hold though Fatima and Pakistan have renewed their efforts to cooperate with U.S. officials on preventing Fatima’s calcium ammonium nitrate from getting into the hands of terrorists. Lt. General Michael Barbero, the head of the Joint Improvised Explosive Device Defeat Organization acknowledged the renewed efforts earlier this week.
“During his recent trip to Washington, D.C., Governor Pence met with Lt. General Barbero regarding the proposed fertilizer plant in Posey County,” Christy Denault, the Gov. Pence’s communication director told Green Markets. “Despite recent positive developments the project is still on hold, and we continue to evaluate whether the State of Indiana should move forward on the deal.”
Governor Mike Pence put the project on hold after entering office in January and hearing of Barbero’s concerns that Fatima had been less than cooperative.
BioNitrogen, CF make deal
BioNitrogen Corp., a company that plans to use its proprietary technology to convert biomass into urea, announced today that it has signed an exclusive agreement with CF Industries Holdings Inc., for the removal of biomass from phosphate mining land to use for urea production. This will supply BioNitrogen with biomass for its first plant in Hardee County, Fla.
According to the terms of this agreement, BioNitrogen will be able to receive all of the woody biomass from CF where it clears wooded land in Hardee County to mine for phosphate. The agreement is for an initial 180-day period with the opportunity for an extended partnership.
“We are pleased to be working with CF Industries,” said Bryan Kornegay, Jr., President and CFO of BioNitrogen. “This agreement will not only grow our secured biomass supply but it will also promote sustainability in Florida. Most of the trees in rural phosphate mining areas such as Hardee County are burned. It’s great to see a company such as CF Industries promoting environmentally friendly approaches to phosphate mining and creating positive impacts for the community.”
BioNitrogen also announced today that it has received approval from the Florida Department of Environmental Protection for woody biomass collection on the company’s 600 acre land parcel in Hardee County.
Construction on the site is slated to commence in early 2013. The proposed plant will be able to produce 15 tons of urea fertilizer hourly, totaling 360 short tons daily or 124,200 tons annually.
PotashCorp bid for ICL on hold
PotashCorp today said that it has put its bid to take over Israel Chemicals Ltd. on hold. Sources note that Israeli Prime Minister Benjamin Netanyahu has had difficulty in putting together a new government after the Jan. 22 elections. In addition, any deal is facing both political and labor opposition.
PotashCorp, which owns a 14 percent stake in ICL, is not interested in a long-term minority status.
JIEDDO reports positive talks with Fatima
Lt. General Michael Barbero, the head of the Joint Improvised Explosive Device Defeat Organization is now seeing improvement communication from calcium ammonium nitrate maker the Fatima Group and the Government of Pakistan in JIEDDO’s attempts at keeping CAN from getting into the hands of terrorist bomb makers. Back in December, Barbero had indicated that Fatima had been less than cooperative, and this news eventually lead to the Governor Pence of Indiana to suspend the development of a Fatima nitrogen plant in the state.
“While I stand by my testimony, in recent weeks I’ve seen positive developments in discussions with the Fatima Group, the Pakistan-based producers of calcium ammonium nitrate,” said Barbero last week. “Fatima confirmed to me in writing that it has suspended sales of CAN fertilizer products in the border provinces of Balochistan and Khyber Pakhtunkhwa, affecting 228 dealers in those areas. I’m encouraged by their actions and remain hopeful this step will have positive and significant near-term impacts with respect to diminishing the IED threat not only to U.S. and coalition forces on the ground in Afghanistan, but to Pakistan’s civilians and security forces as well”
“We also greatly appreciate Fatima’s initiative and innovative approach to seek a reformulated product to render CAN more inert and less explosive, thereby diminishing its effectiveness as an IED precursor material,” added Barbero. “Such a long-term solution would be a true scientific breakthrough. JIEDDO’s scientists will work with Fatima to test and validate this reformulated product. If successful, this development would represent a significant step forward in curbing the use of homemade explosives and preventing the misuse of ammonium nitrate-based fertilizers.
“I am also encouraged by the Pakistan military’s visit and their desire to achieve tangible progress on the U.S.-Pakistan Counter-IED Cooperation Framework,” said Barbero. “This process is being jointly developed by our two countries and will help us to better address our shared interest in diminishing the threat posed by IEDs by fostering information sharing, building counter-IED capacity in Pakistan, enhancing border control and security and educating the population of Pakistan on the IED threat. Measurable objectives are an important part of this framework and I look forward to a productive military-to-military exchange to finalize it and move forward.
While JIEDDO sees positive action on the reformulation of CAN, an agreement on actually dyeing the product, while a goal, has yet to be reached.
There was no word last week from Gov. Pence’s office if perhaps the news would have any immediate impact on Fatima’s suspension in Indiana.
The Week in Fertilizer Stocks
The Week in Fertilizer Stocks
| Producer | Symbol | Price | Week Ago | Year Ago |
| Agrium | AGU | 106.84 | 111.14 | 85.07 |
| CF Industries | CF | 203.93 | 217.86 | 184.30 |
| CVR Partners | UAN | 25.33 | 26.32 | 26.52 |
| Intrepid Potash | IPI | 19.48 | 22.03 | 25.09 |
| Mosaic | MOS | 57.73 | 61.98 | 56.91 |
| PotashCorp* | POT | 39.60 | 41.80 | 47.11 |
| Rentech Nitrogen | RNF | 39.79 | 43.96 | 23.03 |
| Terra Nitrogen | TNH | 230.06 | 239.57 | 201.84 |
| Distribution/Retail | ||||
| Andersons Inc. | ANDE | 48.68 | 47.86 | 43.97 |
| Deere & Co. | DE | 87.06 | 90.57 | 84.19 |
| Scotts | SMG | 43.48 | 43.73 | 48.39 |
| * represents three-for-one stock split | ||||