Vancouver — Pacific Potash Corporation on June 13 announced that it has signed an arms-length letter of intent to purchase all its issued and outstanding securities in Moonraker Acquisition Corp and its shareholders. Under the terms of the transaction, Pacific Potash will acquire all of the issued and outstanding shares of Moonraker from the shareholders in exchange for the issuance of 4,975,000 common shares of Pacific Potash. Moonraker will become a wholly owned subsidiary of Pacific Potash. Moonraker or Pacific Potash holds an option to acquire an 80 percent interest in Western Potash Corporation’s Brazilian potash assets, which comprise several claim parcels that extend from the Amazon River to the center of the Amazonas Basin, for a cash payment of $100,000, followed by an additional $150,000 and the issuance of 500,000 common shares of Pacific Potash within five days after approval of the agreement. On or before the first anniversary of the agreement, Moonraker or Pacific Potash must pay an additional $250,000 and issue a further 500,000 common shares of Pacific Potash. On or before the third anniversary, Moonraker or Pacific Potash must issue a further 500,000 common shares of Pacific Potash. The option also calls for $2 million in exploration expenditures over three years in order to earn the 80 percent interest, with a minimum exploration expenditure of $300,000 per annum. Once all of these commitments have been completed a joint venture will be formed, with Pacific Potash paying 80 percent of costs and Western paying 20 percent going forward. Potassio do Brasil, Petrobras, and Vale, among others, are also exploring for potash deposits in that region. On May 31, Potassio do Brasil announced that it had completed a US$58.66 million capital raising to further the exploration for potash at their Amazon Basin project.
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Stonegate releases drill results for P project
Toronto — Stonegate Agricom Ltd.’s latest assay results at its Paris Hills Phosphate Project in Southeast Idaho show consistent quality grades throughout the project’s upper phosphate zone. The latest 11 drill hole intercepts in the zone announced June 8 align with the results of 15 drill hole intercepts disclosed in April. The most recent assay results show grades ranging from 21-31.29 percent P2O5 and phosphate bed thicknesses of 2.5-5.4 meters, which are consistent with ranges previously published. In December 2010, the Toronto-based company confirmed intersecting high-grade phosphate on the upper and lower zones of its Paris Hills project. Stonegate President and CEO Mark Ashcroft said the Paris Hills project could rank as one of the highest-grade phosphate deposits in the Americas. The drilling to determine resources is now complete. Stonegate expects to release a compliant estimate of the zone’s mineral resources in the second half of 2012. The company also intends to announce assay results for the project’s lower phosphate in the next few weeks. A pre-feasibility study for the lower zone was released in March. Mineral reserve estimates are expected to be updated in a feasibility study by the end of 2012. Ashcroft said Stonegate is confident the two deposits have sufficient size and grade to become strategic, cost-effective sources of phosphate supply for major fertilizer producers. Stonegate completed the purchase of the phosphate/vanadium property at Paris Hills from Rocky Mountain Resources Corp. in November 2009 for $1 million in cash and six million common shares of Stonegate valued at 50 cents per common share. Earlier in 2009, Rocky Mountain announced its phosphate holdings in Paris Hills could sustain mining operations for up to 75 years. It said the estimated 4.6 million tons of ore at 29 percent P205 could potentially be mined and directly shipped as feed to a phosphoric acid plant.
Spot Barge Prices
Correction to Tampa ammonia price
The Tampa mt C&F ammonia price range in the Green Markets price scan on pg. 4 of the June 18 issue should be 625-710 instead of 625.
PotashCorp K postings down $20/st from spring levels
Effective June 11, PCS Sales’ warehouse postings for granular potash dropped to $510/st FOB in Iowa, Missouri, Illinois, Indiana, and Ohio; $512/st FOB Green Bay, Wisc.; and $520/st FOB Baltimore, Md. The summer prices represent a drop of about $20/st from spring pricing levels, the company said.
Postings are scheduled to firm again on July 21 to $530/st FOB in Iowa, Missouri, Illinois, Indiana, and Ohio; $532/st FOB Green Bay; and $540/st FOB Baltimore.
Another death in second Miss Phos explosion; two injured in latest incident occurring June 1
Fertilizer operations were still suspended late last week at Mississippi Phosphates Corp. while OSHA inspectors broadened their investigation after an explosion Friday, June 1, that killed one employee – the second to die in a plant accident in two weeks – and sent two others to the hospital with injuries.
No specifics were available from company officials about either accident, but Jackson County Sheriff Mike Byrd reportedly said that both occurred in the same area. Byrd said that the first was caused by machinery failure that resulted in an explosion, and the most recent involved some sort of a steam explosion.
Byrd was on the scene with Jackson County Coroner Vicki Broadus, who identified the victim of the June 1 accident as Jeremy Moore, 20, who graduated from high school in 2010 and joined Miss Phos shortly afterward. On May 21, Jeffrey Simpson, 39, was killed at the plant where he worked as a board operator (GM May 28, p. 12). In that incident, company officials said the accident occurred during a maintenance procedure in a portion of the plant that was not operational at the time.
The two workers injured June 1 were taken to nearby Singing River Hospital, but one had suffered serious burns and was transferred to USA Medical Center in Mobile, where he underwent surgery and was reportedly awake and talking.
A statement issued right after the accident gave only limited information: “The incident was and is contained within the plant. The facility is stable, but out of caution, operations have ceased. There is no threat to employees or the public. We are working closely with response personnel and cooperating with all government and regulatory agencies. We are continuing to gather information and working to identify the cause of the incident. We are deeply saddened by this incident and our thoughts and prayers are with our employees and families.”
Later the same day the company issued this update: “In wake of this morning’s incident, production at the facility has been temporarily suspended out of caution. But the facility is safe and secure and, as a result, our employees are continuing to report as usual. We are investigating the cause of the incident.” One contact indicated that restarting the production would not happen right away.
OSHA investigators have been on the scene since the first mishap May 21, and Clyde Payne, Mississippi region director, said additional investigators have been dispatched to Pascagoula. Payne said that at this early point he doesn’t know exactly how many have been sent, but that “we’re going to have an appropriate number to do a comprehensive investigation.” He said there is no time limit involved, and that each incident is being investigated separately.
Michael Wald, spokesman for the Department of Labor, declined to speculate about the two accidents occurring so closely together. “We don’t know if the two incidents are related or not,” Wald responded. “That’s all part of the inspection, and OSHA will be the agency issuing the report. There’s nothing we can say about this until the inspection is complete.” By statute OSHA has up to six months from the time it begins to complete the inspection. No findings will be released until the inspection efforts are completed.
The Miss Phos complex went off line after the June 1 incident, and as Green Markets goes to press on June 8, there was no definitive word as to when production might return. The company, however, did confirm June 4 that terminaling activity at the site was occurring.
Ironically, Miss Phos had just reported that its production rates were its bright spot in the first quarter (GM June 4, p. 13). The company said DAP and sulfuric acid production rates were up for the quarter. The company said over the past year it had invested hea
Most El Dorado plants returning to production; DSN acid plant likely not repairable
LSB Industries Inc., the parent of El Dorado Chemical Co., said last week that most of the plants at its El Dorado, Ark., facility will be slowly returning to production in the next 90-day period, but that the plant which suffered the most damage, the DSN 98 percent concentrated nitric acid plant, is likely not repairable.
LSB announced on May 15, 2012, that the El Dorado facility suffered significant damage when a reactor in its DSN plant exploded. No employees or anyone in the El Dorado community were injured as a result of the explosion, and there was no environmental impact.
At this time, LSB intends to restart regular nitric acid and ammonium nitrate (AN) production, on a partial basis, in approximately 30 days, and increase that production over the next 90 days as various plants are brought back online. It is not currently known when the El Dorado facility will produce 98 percent concentrated nitric acid.
LSB said it is unlikely that repair of the DSN plant is feasible. The company is working along with its insurance carriers to evaluate the damages, a process that will take several months to complete. The DSN plant produced approximately 20 percent of the nitric acid manufactured at the El Dorado facility. The company intends to replace the nitric acid production capacity lost by this event.
The three other nitric acid plants, which produce approximately 80 percent of the nitric acid at El Dorado in concentrations from 56 percent to 65 percent, sustained less damage. LSB is in the process of undertaking repairs, which should be completed over the next 30 to 90 days. Production from these plants will be phased in over that period as repair of each plant is completed.
The high-density prilled AN plant was returned to operation the week of May 28 and is running on a limited basis with feedstock from other sources. High-density AN is used for agricultural and high-purity industrial applications.
The low-density AN plant required only minor repairs, which have been completed. When nitric acid is available from one or all of the three “regular” nitric acid plants, the El Dorado facility will resume production of low-density AN. Low-density AN is used primarily for industrial/mining applications.
The El Dorado facility has restarted the truck loading facilities for certain products to enable the facility to ship inventory that was on hand prior to the incident.
The El Dorado facility main nitric acid control room structure was destroyed by the explosion; however, most of the controls remained intact. A temporary control room will be utilized until a new permanent control facility is erected.
The sulfuric acid plant sustained substantial damage; as a result, the company is unable to set a target date for return of this plant to operation.
In addition to the damage sustained by the primary production plants discussed above, the electrical service and various support facilities were damaged. Temporary electrical service is available at this time. Repairs to the permanent electrical service and various support facilities will be made over the next 30 to 90 days.
LSB said it is working closely with customers to identify alternatives for supply. Industry sources have reported very tight supplies for AN in recent weeks, citing the El Dorado outage. The incident is believed to have kept AN prices firm at a time when other nitrogen prices, most notably urea and UAN, have quickly eroded.
The company believes that it has sufficient insurance to cover the damages to the facility and to cover the company’s lost revenue, after a $1 million deductible as to property damage and a 30-day waiting period as to business interruption, per insurance policy provisions.
“The company regrets the difficulties this incident has caused its customers, and is committed to restarting
Florida court approves state numeric nutrient criteria; EPA asks for another extension to federal nutrient regs
The Florida Division of Administrative Hearings on June 7 issued a ruling stating that numeric nutrient criteria (NNC) developed for Florida waters by the Florida Department of Environmental Protection (DEP) are consistent with state law, and that the DEP acted within its legal authority when developing the Florida-specific NNC.
The ruling was hailed by The Fertilizer Institute (TFI), which, along with other trade groups and businesses, has expressed opposition to federal numeric nutrient limits proposed by the U.S. EPA for Florida waters (GM March 12, p. 1). They claim EPA’s Water Quality Standards for the State of Florida’s Lakes and Flowing Waters are not science-based, and would have a disastrous impact on Florida’s economy by imposing heavy costs on the fertilizer industry and other industries in the state, as well as on Florida residents and businesses.
“This is another positive step towards the finalization of Florida’s state NNC,” TFI told Green Markets. “The state criteria contain a biological confirmation component that ensures only waters that are truly impaired are listed as such. TFI is very pleased with this development.”
Noting that “fertilizer is a critical component of Florida’s economy and world food production,” TFI President Ford West said the court ruling “places us just one step closer to ensuring that the state’s water quality standards are science-based while avoiding unnecessary costs to Florida’s citizens.”
EPA now has 60 days to approve or 90 days to disapprove the state criteria. If approved, EPA will withdraw the federal NNC. The state NNC has already received approval by the Florida Environmental Regulation Commission, the Florida Legislature, and Gov. Rick Scott.
“Today’s ruling by Administrative Law Judge Bram D. E. Canter upholds DEP’s numeric nutrient standard rules, further supporting and validating that Florida is taking the right steps to get our state’s water right,” said DEP Secretary Herschel T. Vinyard in a June 7 statement. “These rules have been peer reviewed and have received not only the full support of the legislature and members of the Cabinet, but of the court, as well.”
According to TFI, the court approval was necessary for EPA to review the state criteria as an alternative to its own, which were originally scheduled to take effect in March before EPA petitioned to push back the deadline for enforcement until June (GM Feb. 27, p. 1). EPA in May asked a federal judge to extend the federal NNC deadline again, to July 20 for coastal and estuarine waters, and to Nov. 30 for rivers and streams in the state.
As with the earlier delay, environmental groups objected to EPA’s latest petition to push back the federal NNC deadline, stating in a May filing in federal court that “nutrient pollution is a serious and continuing problem in Florida. This fact mitigates against EPA’s proposed extensions.”
Vinyard said the state criteria crafted by DEP “provide a clear process for identifying waters impaired by nutrients, preventing harmful discharges and establishing necessary reductions.” He referred to the state criteria as “the most comprehensive nutrient standards in the nation,” but stressed that they also “provide a reasonable and predictable implementation strategy and avoid unnecessary costs on Florida’s households and businesses.”
“Protecting Florida’s water resources is in the interest of all who live, visit and do business in the state,” added TFI’s West. “Florida DEP’s water quality standards are protective of the environment and we urge EPA to stand aside now and allow implementation of a Florida-specific approach to address Florida’s water quality ne
Corps of Engineers issues draft of EIS for cumulative phosphate mining permits
The U.S. Army Corps of Engineers has issued a draft of the Environmental Impact Study (EIS) of plans for four additional phosphate mines in Central Florida. The study had been long sought by local governments and opponents of phosphate mining, but little in the draft indicated problems that might lead to denial of the permits under the Clean Waters Act.
The study looked at the cumulative effects from four proposed mines – three planned by The Mosaic Co., and one by CF Industries Holdings Inc. – on the Central Florida Phosphate District (CFPD), an area of approximately 1.32 million acres in Hardee, Hillsborough, Manatee, Polk, Sarasota, and DeSoto counties. The three Mosaic mines were DeSoto, Ona, and Wingate Creek Extension, while CF’s was the South Pasture Mine.
Mosaic spokesman Russell Schwiss said that while the company was still in the process of reading and evaluating the draft, “We are very encouraged with the depth and science” of the report, and said the Corps had done a “thorough analysis” of the issues. Schwiss said the Corps announced in the spring of 2010 that it would do the study when it issued a permit for the company’s South Fort Meade Mine. He said Mosaic had not objected, but wanted other impacts of other factors considered – such as urban development and agriculture – included.
The Corps named four areas of concern: ecological resources, including the loss of wetlands and mitigation of such losses; the effects of phosphate mining on groundwater quality and levels, including potential cumulative effects of mining on regional aquifers, especially associated with use of the Floridan aquifer for industrial water supply; the effects of phosphate mining on surface water quality and quantity, including potential effects on the flow of the Peace and Myakka Rivers and their tributaries, and water deliveries to the Charlotte Harbor estuary; and the regional economic effects of the phosphate mining industry, including the effects both for the counties within where the proposed mines are located, and for adjacent counties where indirect or induced economic effects are likely.
The DeSoto Mine includes 18,287 acres in northwestern DeSoto County and would have a production capacity of about 6 million st/y, which would replace the existing South Fort Meade Mine in Hardee County. The mine would operate from 2021 to 2037, and reclamation would continue for another six years. About 3.130 acres of wetlands would be impacted.
The 22,320-acre Ona Mine in western Hardee County would also produce about 6 million st/y. Mining would run from 2020 to 2050, and reclamation would add another 15 years. Approximately 4,593 acres of wetland would be affected.
The Wingate Creek Extension in eastern Manatee County was 3,635 acres and could produce 1.3 million t/y. That mine would operate from 2019 to 2046, with reclamation until 2054; 774 acres of wetlands would be impacted by the mining.
CF’s South Pasture Mine would be an extension of 7,513 acres in northwestern Hardee County, and would have a capacity of 3.5 million st/y. It would replace the existing South Pasture Mine, and 1,423 acres of wetlands would be disturbed.
In addition, the EIS looked at foreseeable future mines for Mosaic in the region, including the 24,509-acre Pine Level/Keys Tract in Manatee and DeSoto Counties, of which about 10 percent was forested wetlands; the 25,231-acre Pioneer Tract in Hardee County, of which 25 percent is forested wetlands; and a third area of 14,968-acre in Hardee County that could be mined at some point. About one-third of the third area is forested wetlands.
The total number of acres involved in the proposed mines the EIS covered was 51,755, of which 9,850 acres would be wetlands. The three possible future mines covered 64,696, of which 19,319 acres would be wetlands.
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Sulfur
Tampa: There was nothing new to alter the comfortable balance between supply and demand for molten sulfur last week.
Vancouver: Sources reported some backlogs for shipments to Vancouver as a result of the Canadian Pacific Railway strike, but no delays of any significance resulted from the work stoppage.
Benelux: The current price range was $210-$228/mt FOB.