JSC Belarusian Potash Co. has concluded a contract with Sinochem and CNAMPGC – the largest Chinese importers of mineral fertilizers. The deal is for $400/mt CFR, the price achieved earlier by Canpotex and Sinofert. BPC will supply a firm 700,000 mt, with another 300,000 mt optional. The time frame is Jan. 15-June 30, 2013. The Canpotex-Sinofert deal was for 1 million mt during the first half.

“A contract between the largest potash producers and Chinese importers is traditionally viewed in the industry as the major price benchmark having a significant impact on how active the global potash market is,” said BPC CEO Valery Ivanov. “Our short-term expectations are positive, the industry will gradually rebound and consumption will be growing.”

Sylvite Sales announced that it has entered into a sales and marketing arrangement with Slow Release Organic Fertilizers Inc. (SROF). Headquartered in Fort Myers, Fla., SROF markets urea formaldehyde fertilizers produced by UF Granular Fertilizers LLC (UFG), a jointly owned venture by SROF and Morral Companies LLC.

John Cleveland, vice president of SROF, said Sylvite’s broad experience in specialty fertilizer will expand SFOF’s presence in the urea formaldehyde and methylene urea nitrogen slow release markets. Hugh Loomans, president of Sylvite, also touted the arrangement, saying Sylvite is excited to offer this portfolio of American made products.

UFG production is located in Morral, Ohio, and operated by Morral Companies, a large supplier of field crop fertilizers as well as slow release nitrogen liquids.

India’s Gujarat State Fertilizers & Chemicals Ltd. will make a strategic investment of approximately C$45-million in Karnalyte Resources Inc. at a price of $8.15 per common share, which will result in GSFC holding a 19.98-per-cent ownership stake in Karnalyte. Karnalyte and GSFC have agreed to a committed off-take agreement for the purchase of approximately 350,000 mt/y of potash from phase 1 of Karnalyte’s Wynyard carnallite project, increasing to 600,000 mt/y with the commencement of phase 2. The off-take agreement will continue for approximately 20 years from the commencement of commercial production of phase 1.

Using a staged approach to potash plant construction, the Karnalyte plans to operate a solution mining facility that will initially produce 625,000 mt/y, increasing to 2.125 million mt/y. Karnalyte owns a 100 percent interest in Subsurface Permit KP 360A and Subsurface Mineral Lease KLSA-010 located near Wynyard, Sask., comprising a total of 85,126 acres. Karnalyte is listed on the Toronto Stock Exchange under the symbol “KRN”.

"GSFC’s strategic investment and entering into the off-take agreement will support Karnalyte’s growth strategy of constructing its potash production facility and commercializing a superior potash product," said Robin Phinney, Karnalyte president and CEO. "This investment by GSFC is a significant milestone for Karnalyte and establishes Karnalyte as a leader among the new class of potash developers. We are confident that GSFC’s strategic investment and committed off-take agreement will be instrumental in the future success of the project."

Atanu Chakraborty, IAS, managing director of GSFC, commented: "At present, India is fully dependent on imports of potash. This is a significant partnership by an Indian fertilizer manufacturing company with a potash mining company abroad to procure high-quality potash for the Indian market. Karnalyte is ahead of other junior potash mining companies in Canada in terms of expected commissioning of the project. For GSFC, an assured supply will help in expanding its portfolio of fertilizers."

GSFC will subscribe to 19.98 percent of the issued and outstanding common shares after giving effect to this transaction at a price of $8.15 per common share in a non-brokered private placement for total gross proceeds of approximately $45-million. Based on its current issued and outstanding common share capital, Karnalyte will issue approximately 5.49 million common shares to GSFC upon closing of the private placement. The proceeds from the private placement may be subject to escrow pending Karnalyte receiving final approval of its environmental impact statement from the Saskatchewan Ministry of the Environment under the Saskatchewan Environmental Assessment Act. Karnalyte’s public consultation for the EIS commenced on Dec. 29, 2012, and is expected to conclude on Jan. 28, 2013. Following the public consultations, Karnalyte expects to receive final approval from the Saskatchewan MOE shortly thereafter.

The common share issue price of $8.15 is based on a 20-percent premium to the volume-weighted average price of Karnalyte’s common shares traded on the Toronto Stock Exchange for the 20 trading days ended Dec. 20, 2012. The issue price is subject to an adjustment if commercial production has not commenced on or before Oct. 1, 2016, which may be satisfied by the issuance of an additional 555,555 common shares by Karnalyte to GSFC at that time.

Pursuant to the terms of the subscription agreement, GSFC shall have the right to appoint one nominee to the board of directors of Karnalyte. In addition, GSFC retains the right to maintain its equity position in future equity offerings and has agreed to commit approximately $15-million in the next rounds of public equity financing by Karnalyte to finance the construction of phase 1 of the project.

Closing o

CHS Inc. reported earnings of $343.7 million for the first quarter of its 2013 fiscal year. Earnings attributed to CHS operations for the period of Sept. 1, 2012 through Nov. 30, 2012 declined 17 percent from $416.2 million for the first quarter of fiscal 2012.

Revenues for the first quarter of fiscal 2013 reached $11.7 billion, compared with $9.7 billion for the first three months of fiscal 2012. This primarily reflected continuing strong values for the energy, grain and crop nutrients products that comprise the majority of CHS business.

Energy segment earnings led the company’s performance for the quarter, but declined from the same period a year ago due to reduced margins at CHS refineries in Montana and Kansas. Earnings improved for CHS propane, renewable fuels and transportation businesses, but declined slightly for its lubricants operations.

While soundly profitable, earnings also declined within the CHS Ag segment primarily due to lower margins for the grains and oilseeds the company markets and processes, as well as the crop nutrients it handles. Within the segment, quarter-over-quarter earnings increased for the company’s Country Operations retail locations which reported higher volumes for the retail products and grain it handles. The CHS processing and food ingredients businesses also recorded improved margins for its soybean crushing and refining operations.

CHS reports results for its business services operations, as well as two food processing-related joint ventures, under the Corporate and Other category. CHS-owned financing businesses recorded higher earnings for the quarter, which were partially offset by slower hedging activity in the first three months of fiscal 2013. The company’s share of earnings from its 50 percent ownership of Ventura Foods, LLC, a vegetable oil-based food manufacturing business, improved due to stronger margins, while those from its 24 percent CHS share of Horizon Milling, LLC, the nation’s leading wheat miller, remained flat compared to the same period in fiscal 2012.

LSB Industries Inc. today announced that it expects to complete the installation of a new ammonia converter and resume production at its Pryor, Okla., chemical facility in the first half of February 2013. As announced on Nov. 21, 2012, the company had stopped production at the Pryor to perform unplanned maintenance on a compressor, as well as for the planned installation of a new ammonia converter designed to improve and increase ammonia production capacity. The company initially anticipated an outage of approximately six to eight weeks; however, while the compressor maintenance has been completed, delay in the delivery of certain components related to the converter installation has pushed out by approximately four weeks the expected timeframe for restarting Pryor. The company estimated that the adverse effect of this downtime on operating income is approximately $2 million per week until production resumes.

Additionally, LSB provided an update on its Cherokee Nitrogen facility in Alabama, following its Nov. 14, 2012 announcement that Cherokee suffered a pipe rupture that damaged the heat exchanger portion of its ammonia plant. Since that time, Cherokee has been producing nitric acid and ammonium nitrate at the targeted production level, using purchased ammonia feedstock. Management expects repairs to be completed and production to be resumed within the previously estimated three to five month range.

Officials at Eastern Farmers Co-op here are puzzled why the top on a tank containing 28 percent liquid nitrogen blew off last Friday afternoon, Jan. 11, during a welding procedure and landed a few yards away. There were no injuries.

Zach Weiland, safety supervisor at the plant, was reluctant to provide any details since the investigators from the parent company CHS Inc. had not arrived on the scene as of Monday morning. He was not sure how much liquid fertilizer was in the tank.

Ryan Longhenry, chief of the Garretson fire department which responded along with Valley Springs fire department and Minnehaha County emergency management, said he believed there was contamination in the tank because the liquid nitrogen should not have been flammable on its own. Longhenry was only two blocks away when the explosion occurred. “They were welding on the side of the tank from a boom truck. One of the welders was in the bucket and one was on the ground. There was definitely an explosion which blew off the top portion of the tank which landed about 50 yards away from the base of the tank.”

Parent company CHS at St. Paul provided this statement: “At approximately 4 p.m. on Friday the Garretson location of Eastern Farmers Cooperative experienced an explosion and fire involving a liquid fertilizer tank that was undergoing maintenance by a welder from a private contractor. The Garretson Fire Department responded promptly and extinguished the fire within a few minutes. There were no injuries, no spills and no risks to the surrounding community. Eastern Farmers is committed to safety in all of its operations and will conduct a full investigation to determine the cause of the incident.”

CVR Partners LP said Jan. 9 that the expansion of its Coffeyville, Kan., UAN capacity is expected to be delayed until March 2013. CVR had earlier expected the new capacity to be available in January. The upgrade is expected to approximately double existing capacity. After the upgrade, UAN capacity will be over 3,000 st/d.

CVR said all machinery and equipment for the project has been installed and related infrastructure is in place. However, delays in the commissioning and required testing of certain control equipment have deferred the expansion start-up date until early March. In the interim, the existing fertilizer plant continues to produce ammonia and UAN at full rates.

While the delayed start-up is anticipated to impact 2013 full year cash available for distribution by approximately 5 cents per common unit, the company continues to expect a significant double-digit increase in cash available for distribution for the full year of 2013 as compared to 2012. The company reaffirms its expectation for 2012 full year distributable cash flow in the range of $1.70 to $1.80 per common unit.

Full financial guidance for 2013 will be provided with the release of the company’s 2012 fourth quarter and full year results in the first quarter of 2013.

Ford B. West, president of The Fertilizer Institute, announced on Jan. 7 that he will retire from his position effective December 2013. West joined TFI on Nov. 1, 1979, and has served as its president since Sept. 6, 2005.

In a memo to TFI members, West said it’s been “an honor to represent the fertilizer industry over the past 33 years,” and a pleasure to work with “many great people” to inform government institutions, the media, and the general public of the vital role that fertilizer plays in world food production.
West rose through the ranks at TFI, first serving as director of member services before being promoted to assistant vice president in 1982, vice president of government relations in 1984, and senior vice president in 1999. When he became TFI president in 2006, West succeeded Kraig Naasz.

“I thank those who took the time to mentor me and help me to appreciate the difference between ‘dirt and soil,’ to understand the science involved in the production and use of fertilizer and to appreciate the historical role and contribution of fertilizer to the food chain,” West said. “Fertilizer touches many hands before it arrives in farm fields and TFI provides a forum where fertilizer producers, importers, wholesalers, and retailers can share their perspectives on common problems and develop approaches to meet these challenges. I am very proud to have been a part of that process.”

West also expressed gratitude to the staff at TFI and the Nutrients for Life Foundation. “Any success I have had as president is due to a combined effort of these association professionals working together for the good of the industry,” he said.

TFI’s board of directors has established a presidential search committee comprised of five executive committee members who will operate under the leadership of TFI Board Chairman Jim Prokopanko. The committee held its first meeting in late December in Chicago. Spencer Stuart, one of the world’s leading executive search consulting firms, has been retained to assist the search committee in the candidate selection process.