A typographic error in information supplied to Green Markets prior to publication misstated the export duty for Chinese DAP and MAP. The correct export rate is 5 percent, not 2 percent as earlier reported.

Also, missing from the initial data was a change in the export window for DAP and MAP. The Chinese government added two weeks on each end of the previous export window. The lower 5 percent duty will be charged on DAP and MAP May 16 through Oct. 15. The previous window was June through September.

Green Markets regrets the error. See the forthcoming Special Edition of Green Markets to be on the website Dec. 28, 2012 for further discussion on this issue.

The Mosaic Co., which has been looking at building an ammonia plant in Louisiana, is focusing on its existing site at Faustina, La. Gov. Bobby Jindal and The Mosaic Co.’s Richard Krakowski announced Mosaic is beginning front-end engineering and design work on a potential $700 million ammonia production plant at the company’s existing Faustina site in St. James Parish. The project would create 53 new direct jobs paying an average of more than $83,000 a year, plus benefits, and LED estimates an additional 366 new indirect jobs would result from the expansion. An estimated 1,400 workers would be required for construction of the plant.

Mosaic operates two Louisiana chemical facilities on opposite banks of the Mississippi River: Faustina on the west side and Uncle Sam on the east side. Combined, the current facilities employ 379 direct Mosaic employees, who are supported by 235 contract employees. The project would nearly triple existing Faustina production of ammonia, with all the new production destined for sister Mosaic sites in Florida that also manufacture the company’s crop nutrient, or fertilizer, products in Florida.

Gov. Jindal said, “Mosaic could have looked at other states but chose Louisiana because of our strong business climate, skilled workforce and incredible infrastructure in the chemical and petrochemical industries. Mosaic said that favorable natural gas prices in Louisiana will allow them to bring back more ammonia production from overseas. Louisiana not only has these favorable natural gas prices right now, but energy forecasts show the wide split between the price of oil and natural gas continuing well into the future, which means there will be more and more companies who want to invest here and create jobs. It’s part of the renaissance that chemical and energy industries are experiencing right now in Louisiana, and we will continue to make sure we are fostering an environment where more companies want to invest and create jobs for our people.”

Currently, Mosaic makes phosphoric acid at its Uncle Sam plant, combining sulfuric acid and phosphate rock shipped to the state from company mines in Florida and Peru, as well as some imported rock from other sources. The phosphoric acid is shipped by barge across the river to the Faustina plant, where chemical processes combining phosphoric acid and ammonia produce granular, finished fertilizer products for agricultural use. A similar process occurs in Florida, where Mosaic manufacturing sites are currently importing ammonia from Trinidad, Russia and the Middle East. Favorable natural gas prices in Louisiana create a more attractive economic environment for Mosaic to produce its ammonia requirements rather than depend on overseas sources of supply.

“As the world’s leading producer of phosphate and potash crop nutrients, Mosaic’s mission is to help the world grow the food it needs,” said Krakowski, Supply Chain vice president. “Our Louisiana operations are vital to that mission and ammonia is an essential part of our manufacturing processes. Louisiana is a terrific place to do business, and we’ve received great support thus far from state, local and economic development officials. We’re eager to conduct the engineering and design evaluation that will lead to a final investment decision next year.”

Mosaic expects to make its final investment decision in mid-2013, after the detailed engineering design and cost evaluation of the project are completed. Construction would start in 2014, with commercial operation of the plant likely to begin in early 2016. The 53 new direct workers would be hired in phases during construction.

LED’s Business Expansion and Retention Group, or BERG, began discussions with Mosaic about the project in December 2011 and was joined by regional and local economic development partners. To secure the pr

Keytrade AG reports that it has signed a Memorandum of Understanding (MoU) with Sinochem Fertilizer Co. Ltd., China’s largest fertilizer supplier and distributor, to market Sinochem’s fertilizer products in Latin America and Africa.

“Sinochem Fertilizer has a well-deserved international reputation for the high standard quality of their products, and this agreement reinforces Keytrade AG’s commitment to supply our customers the finest fertilizer available,” said Melih Keyman, Keytrade president and CEO. “We are very proud to be associated with Sinochem Fertilizer Co. Ltd. to embark on such an important mission. This marks a new high point in our long established relationship with Sinochem.”

Keytrade is a global fertilizer trading company headquartered in Switzerland. CF Industries Inc. acquired 50 percent of Keytrade in 2007, and since then Keytrade and its subsidiaries have been exclusively exporting CF’s phosphate fertilizer in the international markets. Keytrade has also been responsible for exclusive imports of UAN into North American markets.

In 2011, Keytrade diversified and expanded its global trading activities by adding grains, meals and proteins, and other related agricultural commodities to its portfolio.

Tampa anhydrous ammonia prices are moving down for January. Major players have concluded January business at $673/mt C&F, down $12/mt from December’s $685/mt.

The Chinese government released its 2013 fertilizer export duty rates this week. Urea export duties will be lowered from 7 percent to 2 percent July through October. The government made no mention of changing the duty of 110 percent for the rest of the year.

The 2 percent figure is the base rate for urea exports. The rate is progressive, working off the new benchmark price of RMB2,260 (US$362.49)/mt. The 2012 benchmark was RMB2,100/mt (US$336.83/mt).

Beijing also dropped the DAP and MAP export duty from 7 percent to 2 percent for the months of June through September. The rest of the year the rate will be 110 percent.

As with urea, the export rate is based on a benchmark price of RMB3,500 (US$561.37)/mt for DAP and RMB3,200 (US$513.29)/mt for MAP. These new prices represent an increase from the 2012 numbers.

The government also lowered the rates for NPKs to 80 percent throughout the year from the 2012 number of 110 percent January through September and 95 percent October through December.

The government has engaged in selected months for lower export duties to discourage exports during periods of strong domestic demand. In the past, strong international demand drove up the price of urea and phosphates in the domestic market. The increase in fertilizer prices were not matched with a corresponding increase in payments farmers received for their products. At the same time the government began cutting off subsidies to producers and farmers.

Vale S.A. (Vale) reports that it has signed an agreement with Petróleo Brasileiro S.A (Petrobras) to sell a nitrogen complex in Araucária, in the Brazilian state of Paraná, for US$234 million. The sale is subject to the fulfillment of precedent conditions, including the approval by the Conselho Administrativo de Defesa Econômica (CADE), the Brazilian anti-trust authority.

Araucária has annual production capacity of approximately 1.1 million mt of ammonia and urea.

Vale said the divestment of assets, which do not have synergies with the rest of its portfolio, is consistent with the company’s efforts to improve capital allocation and resources to generate additional funding for investments in priority projects with high potential for value creation. The sale of Araucária also contributes to an annual reduction of investments in sustaining operations of approximately $50 million.

The purchase price will be paid by Petrobras through installments accrued quarterly, adjusted by 100 percent of the Brazilian interbank interest rate (CDI), in amounts equivalent to the royalties due by Vale related to the leasing of potash assets and mining rights of Taquari-Vassouras and of the Carnalita project.

In February, Vale signed a leasing contract of potash assets and mining rights with Petróleo Brasileiro for a period of 30 years, allowing for the continuation of potash mining in Taquari-Vassouras and the development of the Carnalita project, in the state of Sergipe, Brazil. Vale said the leasing contract will ensure the extension of operations at Taquari-Vassouras, the sole potash producer in Brazil and one of only two producers in South America, finalizing the development of the Carnalita potash project and the study and development of other areas within the concession.

Phosphate Holdings Inc., which owns Pascagoula phosphate producer Mississippi Phosphates Corp., reported a third quarter net loss of $4.8 million, or $0.57 per diluted share of common stock, compared to net income of $1.5 million, or $0.18 per diluted share of common stock for the same period in 2011. Third quarter EBITDA was a negative $3.7 million, compared to the year-ago positive EBITDA of $6.6 million.

Total net sales for the third quarter of 2012 were $70.3 million, a 26 percent decrease from total net sales of $94.7 million for the third quarter of 2011. The average sales price per short ton of DAP during the third quarter of 2012 was $496, a 14 percent decrease from the prior-year period average sales price of $578. During the third quarter, the company sold 140,258 tons of DAP, with 31,335 tons moving into export markets and 108,923 tons moving into domestic markets. This compares with 162,761 tons of DAP sold in the third quarter of 2011.

The company had an operating loss of $7.6 million for the third quarter of 2012, compared to operating income of $2.7 million for the prior-year period.

As of Sept. 30, 2012, the company had a cash balance of approximately $2.9 million and borrowings under our credit agreement of $14.4 million. During the third quarter, the company expended $2.8 million on capital expenditures.

On Nov. 30, 2012, the company and OCP S.A. agreed to extend the term of their Agreement for the Purchase and Sale of Phosphate Rock dated August 27, 2009, through June 30, 2013. The agreement was scheduled to expire on Dec. 31, 2012.

The U.S. Army Corps of Engineers St. Louis District reports that on Dec. 15 it began increasing releases from Carlyle Lake in support of safe navigation on the Mississippi River.

Water from the lake will help provide the depth necessary for river commerce to pass Thebes, Ill., where rock formations pose a risk to navigation at -5 feet and below on the St. Louis gage. Carlyle Lake is located on the Kaskaskia River system in Southwest Illinois.

Carlyle Lake is one of few Corps reservoirs able to significantly capture water above its seasonal pool level to support navigation during the current drought. Maj. Gen John Peabody, Mississippi Valley Division commander, authorized all the lakes on the Upper Mississippi River system to hold an additional 10 percent above seasonal pool levels October 17 in anticipation of historic low levels on the Middle Mississippi.

Releases from Carlyle Lake began late Saturday, and will increase gradually to 4,000 cubic feet per second by Monday afternoon. The full extent of the releases is expected to reach Thebes by Dec. 24. This will provide an additional six inches of depth in this critical reach of the river. Releases will continue if needed until the river level increases through precipitation, or until Carlyle Lake reaches its winter pool elevation. With the additional release schedule, Carlyle Lake is expected to reach its winter pool level in approximately three weeks

"With the Mississippi River watershed receiving less rain than forecasted, we are working to provide the water depth needed at a time when inches make a difference," Peabody said. "We’ll continue to work closely with the navigation industry and our partners in the U.S. Coast Guard to keep the vital artery for commerce open."

On Dec. 14, the Corps announced the schedule for removing rock formations in the Mississippi River near Thebes, Ill. The agency has awarded two contracts for rock removal work in a nearly six mile stretch of river. Newt Marine Inc., of Dubuque, Iowa, will remove the rock formation upstream of Thebes; Kokosing Construction, from Fredericktown, Ohio, will remove the rock formation downstream of Thebes.

Work began Saturday, Dec. 15, upstream of the Thebes railroad bridge. While final blasting plans are still being developed, full operations will begin early the week of Dec 17, with blasting to take place during daylight hours. The U.S. Coast Guard is coordinating notices to mariners, and river closures are scheduled for 16 hours on working days starting Monday, Dec. 17, between 6 a.m. and 10 p.m. each day during the rock removal, with traffic allowed to pass for eight hours.

The work will remove around 890 cubic yards of limestone from the water-starved river to reduce the risk for vessels in the channel during low water. The rocks are part of a large formation that impedes the navigation channel during low water. More rock removal is planned for later dates, but the work that began Saturday will address areas that will have the most immediate impact on the navigation.

Removing the rock formations are one of many operations the Corps and U.S. Coast Guard are undertaking along the narrowing river to maintain a 9-foot deep channel for river navigation. Dredging has been ongoing since early July to preserve the channel, as well as continued surveys, channel patrols to keep commerce safely moving on the Middle Mississippi.

"The drought across much of the Midwest is making river navigation challenging," said Col. Chris Hall, St. Louis District commander. "We are taking additional measures and are confident that we will be able to maintain a safe and reliable channel for our partners in the river industry."