Chatham, Ont. — James Douglas Diamond, an operations supervisor with Black and McDonald’s London office, was handed $40,000 in fines during a Provincial Offences Court hearing for violations under the Environmental Protection Act in Canada. He was held responsible for an ammonia release that sent three local lifeguards to a Chatham-Kent hospital for observation in June 2010. “The charges are related to a discharge of ammonia gas from an arena that affected people in an adjacent community swimming pool and failure to notify the ministry,” said Kate Jordan of the Ministry of the Environment. Jordan told Green Markets that the release caused adverse effects to people at the nearby pool, with some experiencing irritated eyes and throat, difficulty breathing, headache, queasy stomach, and disorientation. Those impacted were taken to the hospital and treated for exposure to the ammonia. Diamond’s fine was $20,000 for the release of a contaminant that caused, or was likely to have caused, an adverse effect, and an additional $20,000 for failing to notify the Ministry of the discharge. Diamond arrived at William Erickson Arena on June 29, 2010, and began replacing the arena’s condenser unit, located on the roof. When he opened a vent valve on the condenser and began purging ammonia from the condenser, the ammonia drifted over the pool located beside the arena.
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ICL facing opposition to phos mine expansion
Tel Aviv — Israel Chemicals Ltd. (ICL) is facing another battle with environmentalists opposed to the expansion of its phosphate mine at Nahal Zin. ICL subsidiary Rotem Amfert has requested permission to mine phosphates in an area adjacent to Table Mount in the Negev. The Society for the Protection of Nature in Israel (SPNI) has expressed its opposition to the plan. SPNI said that the site is part of an area that has been designated as a reserve for animals and plants in the Negev. Despite the strong opposition from SPNI, the country’s National Parks Authority has reached an agreement with ICL that would grant the company the right for limited mining operations if it agrees to restore and rehabilitate the area. SPNI has expressed its opposition to the authority’s position, charging that the mining will totally ruin the area, and that in any case the ecological nature of the area makes it impossible to rehabilitate. ICL notes that the area in question is adjacent to Nahal Zin, where mining operations have been taking place since the 1970s. Meanwhile, the Regional Planning Council is currently studying sites that ICL has requested permission for mining operations. The council will then make its recommendations on where it will approve future mining operations, and under what conditions.
Compromise reached on ICLÆs DSW salt harvest
Tel Aviv — A compromise agreement has been reached with Israel’s Tourism and Environmental Protection Ministries that will allow for the implementation of the agreement between the state and Israel Chemicals Ltd. (ICL). Under the terms of the agreement, the Finance Ministry has agreed to allocate $250 million over the next five years for rehabilitation of the Dead Sea. The Tourism and Environmental Protection Ministers had been demanding that a special fund from Dead Sea Works royalties be set up to cover the cost of rehabilitating and investing in tourism infrastructure. The Finance Ministry was opposed to the establishment of a special fund from the royalties, but agreed to allocate funds to both ministries. The agreement represents the last hurdle prior to the agreement approved by the government with ICL on the removal or “harvesting” of salt and a new royalities regime. Under the terms of the agreement the company will cover 80 percent of the cost of harvesting the salt from the Dead Sea’s southern basin in order to prevent the flooding of nearby hotels. In addition, royalty payments are to be increased from 5 to 10 percent. The cost of the operation is estimated at over $1.3 billion. Environmental groups are still opposed to the agreement and are planning to fight it in court.
Simplot acquires Eastside Chemicals
Boise — The J. R. Simplot Co. said Feb. 10 that it has acquired Eastside Chemicals Inc., a provider of agronomic products and services for citrus growers on the east side of the San Joaquin Valley in California. “This purchase represents a signal to California growers that Simplot is bullish on agriculture in their state, and we will continue to invest in California agriculture to support their needs,” said Dave Dufault, head of Simplot Growers Solutions. Simplot said the former Eastside Chemicals business will now be able to provide customers with a broader scope of products, services, and technology as part of the Simplot Grower Solutions network, which includes 23 other units throughout the state. “This new unit meshes very well and is complementary with the support system we already have in place for citrus growers in the area,” said Peter Niboli, director of California Retail for Simplot Grower Solutions. “Our goal is to exceed our existing and new customers’ expectations with superior expertise, technology, and service.” The new Simplot business unit is located near Orange Cove.
Nebraska area is set to require farmers use nitrification inhibitors
One of the largest natural resource districts in Nebraska is poised to establish a new rule for fertilizing by requiring use of nitrification inhibitors in certain nitrogen applications, which would affect some 3,000 farming operations.
Acting on concerns over growing nitrate contamination in groundwater over the past few years, Upper Big Blue Natural Resources District is proposing to give farmers three fertilizer application options: 1. Anhydrous ammonia applied between Nov. 1 and Feb. 29 must also include a nitrification inhibitor; 2. Nitrogen fertilizer applied on or after March 1 and before planting at a rate greater than 150 pounds per acre must also include a nitrification inhibitor; or 3. Pre-plant nitrogen fertilizer applied on or after March 1 at a rate less than 150 pounds per acre does not require a nitrification inhibitor.
As an alternative to using a nitrification inhibitors, which delay the conversion of nitrogen fertilizers to the nitrate form and reduces nitrogen loss, Option #3 allows the farmer to apply a lower rate of fertilizer before planting, and then apply additional nitrogen if needed after planting, when an actively growing crop can utilize it.
District officials have sent out notices to 56,000 residents of a public hearing scheduled for March 1 at 1:30 p.m. in the York City Auditorium. They point out that several communities in the area have found it necessary to construct new wells to comply with state and federal drinking water standards. Some communities have built or are considering treatment plants. Many rural residents have also replaced wells or installed private water treatment systems.
Rod DeBuhr, district water department, said that nitrification inhibitors change the structure of bacterial counts in the soil so it slows down the conversion of ammonia nitrates. “The products are used with both liquid and granular fertilizers to slow down the process of the conversion, which occurs only when nitrogen is in a nitrate form,” he offered, adding that he understands that it would cost about $9 per acre for a typical application.
“Actually it’s a bigger issue than just how it affects the farmer. Groundwater contamination is affecting entire communities,” DeBuhr noted. “The only thing we’re asking is that producers try to use fertilizer responsibly. In most cases it saves fertilizer that isn’t washed away in the growing process.”
Since 1996, the NRD has required that farmers wait until Nov. 1 to apply anhydrous, and to wait until March 1 to apply other formulations of nitrogen fertilizer. In some parts of the district where groundwater nitrate is the highest, farmers are required by existing regulations to attend training classes, take soil samples, and calculate crop nitrogen needs.
Upper Big Blue, located to southeastern Nebraska, is one of 23 districts established in 1969 by the legislature that were granted the authority to enact rules and regulations within each district to conserve natural resources.
Higher SOP prices boost Compass fert results; tornado, light winter impact salt
Higher sulfate of potash prices in the fourth quarter and year ending Dec. 31, 2011, helped Compass Minerals offset lower volumes. Fourth-quarter prices were up 19 percent, while volumes were off 21 percent. The addition of Big Quill Resources in January 2011 also helped the Compass specialty fertilizer segment post a 9 percent increase for the fourth quarter, to $19.6 million on sales of $53.6 million, compared to the year-ago $17.9 million on sales of $56.6 million.
Fourth-quarter volumes were 85,000 st with an average price of $631/st, compared to the year-ago 107,000 st and $530/st, respectively.
For the year, fertilizer earnings were $77 million on sales of $209.6 million, up from the prior year’s $61.4 million and $187.5 million, respectively. Volumes fell to 344,000 st at an average price of $610/st from the year-ago 362,000 st and $518/st, respectively.
Going forward, Compass expects to sell 375,000 st of SOP in 2012, with 90,000 st of that in the first quarter. It expects prices to remain strong, within the $630/st average for the last two quarters. Fourth-quarter per-ton costs were put at $330/st, up from the fourth quarter’s $292/st. The company expects production costs to be higher by about $100/st in the second through fourth quarters of 2012 when compared to 2011 due to inefficiencies caused by low solar-evaporation harvest in the summer of 2011 and costs associated with purchases of mineral feedstock for SOP production.
Compass hopes production costs will improve by the end of 2012, due to a more typical evaporation season as well as the completion of Phase 1 and the initial pond-yield benefits of Phase II of its multi-phased expansion program. Due to these upgrades, it expects production costs to eventually drop to $225/st. The completion of Phase I has been delayed until the third quarter to avoid shutting down the plant for the final tie-in. In 2012, it expects to spend some $110 million on the expansion plans, with another $40 million to be spent to restore the Goderich, Ont., salt operations to pre-tornado capabilities. Goderich is currently operating at 85 percent capacity. Most of the latter will be covered by insurance. However, it estimates that the effects of the tornado will linger into first quarter 2012, impacting salt earnings by $20 million.
Company-wide, Compass was impacted by its salt business, which suffered due to the tornado that damaged its Goderich facility as well as a weak winter salt season, which cut fourth-quarter salt deicing volumes by 17 percent, with salt prices down slightly for the quarter. Company-wide, Compass reported fourth-quarter net earnings of $43.9 million ($1.31 per share) on sales of $306.1 million, down from the year-ago $61.1 million ($1.83 per share) on sales of $356.3 million. Net earnings excluding special items were $55.3 million ($1.65 per share), versus the year-ago $56.8 million ($1.70 per share).
For the year, Compass reported net income of $149 million ($4.45 per share) on sales of $1.1 billion, down slightly from the year-ago $150.6 million ($4.51 per share) on sales of $1.07 billion. Despite its weather woes, Compass said 2011 sales were the second highest in company history. Net earnings excluding special items were $160.4 million ($4.79 per share), versus the year-ago $146.3 million ($4.38 per share).
Going forward, should the winter not improve, Compass expects a soft environment for salt volumes and prices for next winter, with volumes being down and prices flat.
The Week in Fertilizer Stocks
The Week in Fertilizer Stocks
| Producer | Symbol | Price | Week Ago | Year Ago |
| Agrium | AGU | 82.81 | 82.20 | 96.12 |
| CF Industries | CF | 185.73 | 182.30 | 96.12 |
| Intrepid Potash | IPI | 25.39 | 24.79 | 38.53 |
| Mosaic | MOS | 56.00 | 57.11 | 84.52 |
| PotashCorp* | POT | 45.87 | 47.26 | 60.36 |
| Terra Nitrogen | TNH | 213.25 | 195.96 | 101.84 |
| CVR Partners | UAN | 29.33 | 30.92 | N/A |
| Distribution/Retail | ||||
| Andersons Inc. | ANDE | 42.84 | 42.75 | 44.69 |
| Deere & Co. | DE | 87.93 | 87.42 | 93.95 |
| Scotts | SMG | 51.12 | 47.91 | 51.91 |
| * represents three-for-one stock split | ||||
Spot Barge Prices
Magellan makes money off ammonia pipeline
Tulsa — Magellan Midstream Partners LP reported a huge turnaround in margins from its ammonia pipeline for the year and quarter ending Dec. 31, 2011. For the year, operating margins were $7.3 million on revenues of $23.6 million, up from a prior year loss of $4.1 million on revenues of $14.9 million. Volumes moved up to 727,000 st from 2010’s 462,000 st. Extensive hydrotesting, which impacted movement, was done on the line in 2010, less so in 2011. Magellan said as early as the first quarter 2012, all segments of the system have now been tested to ensure the integrity of the pipeline system. The company continues to evaluate the sale of the pipeline and has entered into negotiations, though it cannot estimate the timing of an eventual sale. Fourth-quarter pipeline margins were $3.2 million on revenues of $6.2 million, up from the year-ago $1.75 million on revenues of $5.4 million. Volumes for the quarter were up at 181,000 st from the year-ago 164,000 st. Company-wide, Magellan reported annual net income of $413.6 million ($3.66 per diluted share) on revenues of $1.75 billion, up from 2010’s $311.6 million ($2.85 per share) on revenues of $1.56 billion. Fourth-quarter net income was $110.3 million ($.97 per share) on revenues of $486.9 million, up from the year-ago $87.9 million ($.78 per share) on revenues of $398.5 million.
Bunge fertilizer margins challenged
White Plains, N.Y. — Bunge Ltd. reported that results from its fertilizer business were slightly lower in the fourth quarter due to a more challenging margin environment. Fertilizer earnings before interest and tax (EBIT) for the fourth quarter ending Dec. 31, 2011, were a negative $3 million on sales of $930 million, compared to the year-ago positive $1 million on sales of $731 million. Gross profit was $43 million, down from $62 million, while volumes were up at 1.75 million mt from the year-ago 1.68 million mt. For the year, fertilizer EBIT was a negative $1 million on sales of $3.15 billion, compared to the year-ago $2.34 billion and sales of $2.73 billion. The year-ago figure reflected the sale of major production assets to Vale S.A. Full-year gross profit was down slightly to $152 million from $155 million, while volumes dropped to 6 million mt from 7.71 million mt. Company-wide, Bunge reported net income attributable to Bunge of $942 million ($6.07 per diluted share) on sales of $58.7 billion for the year, compared to 2010’s $2.35 billion ($15.06 per share) on sales of $45.7 billion. Fourth-quarter net income was $254 million ($1.65 per share) on sales of $16.4 billion, versus the year-ago $301 million ($1.95 per share) on sales of $12.73 billion.