Midwest Fertilizer Co. LLC has entered into an agreement with thyssenkrupp Industrial Solutions (USA) Inc. to design and build a state-of-the-art nitrogen fertilizer manufacturing facility in Posey County, Ind., at an agreed aggregate price in excess of $2.0 billion, with financial close expected in mid-2016. The contract awarded to thyssenkrupp covers Engineering, Procurement, Construction (EPC) and related services. Construction will start after the financial close. The facility is expected to be fully operational in 2020.
           
“thyssenkrupp is a world leader in fertilizer plant technology,” said Mike Chorlton, Midwest president and CEO. “This partnership allows us to move forward with the next phases of this world-class project in southwest Indiana.” Midwest’s facility will produce ammonia, urea, UAN and diesel exhaust fluid.

“Thanks to Posey County’s business friendly environment, we are on the path to provide farmers in Indiana and the Midwest a reliable local source of high-quality nitrogen fertilizer,” said Chorlton.

The fertilizer plant is expected to generate more than 2,500 construction jobs over a three to four year period and approximately 200 permanent employment opportunities. Once completed, the fertilizer plant will provide local production for the farmers in the Eastern Corn Belt.

The principal sponsor and developer of the project is Pakistan’s Fatima Fertilizer Co., a part of Fatima Group. Fatima Group is one of the leaders in the fertilizer industry and has diverse manufacturing businesses in fertilizer, textiles, sugar and energy. Since selecting thyssenkrupp to supply a fertilizer production plant in 1973, Fatima’s fertilizer business and thyssenkrupp continue to work as partners.

The project will be partially funded by an already secured $1.259 billion of tax-exempt debt borrowed by Midwest and facilitated by Posey County under the Heartland Disaster Tax Relief Act of 2008. The remaining funds will be comprised of equity, tax increment-financing bonds, and some term debt.

Fawad A Mukhtar, chairman of Fatima Group, expressed great satisfaction with this next level of partnership with thyssenkrupp and stated “we are confident that Midwest Fertilizer Company’s success will open up avenues for further progress and development in southern Indiana.”

The thyssenkrupp Industrial Solutions business area has been in the business of engineering and construction of nitrogen fertilizers plants for over 80 years. In the past 20 years, the company has built 19 ammonia plants and 21 urea plants as well as completed 9 ammonia and 6 urea expansion projects. Three of the world’s largest ammonia projects use the company’s technology. thyssenkrupp is also a supplier in the field of nitrates with more than 200 nitric acid plants using its technologies worldwide. Overall, the company says it has successfully realized more than 2,000 chemical plants.

The U.S. Coast Guard reported at 10 am Jan. 25 that it was responding to a barge breakaway at mile marker 501.6 near Greenville, Mississippi, which included a sinking UAN barge. The Mississippi River is closed from mile marker 503 to mile marker 490.

The Coast Guard reports that the tow vessel Big J.O. struck the bank of the Mississippi River, resulting in four empty barges and two barges loaded with UAN breaking loose. According to the Coast Guard, one of the loaded barges is reportedly sinking. Four barges have been secured.
Good Samaritan vessels are assisting to retrieve the remaining unsecured barge. The cause of the incident is under investigation.

LSB Industries Inc. has announced that its Pryor, Okla., chemical facility was fully operational and began producing all products on Jan. 17, 2016. As announced on Dec. 27, 2015, both Pryor’s urea and UAN plants were taken down when the facility’s production of nitric acid (a component of UAN) had to be halted in order to repair a leaking joint in that plant.

LSB also provided an update on the status of the expansion project at its El Dorado, Ark. facility. As previously announced, the new nitric acid plant and concentrator are in production. The 375,000 st/y ammonia plant remains on schedule to be mechanically complete in February of 2016 with ammonia production beginning early in the second quarter of 2016. As of Jan. 10, 2016, the ammonia plant was approximately 93 percent mechanically complete and the cost estimate to complete the EDC expansion remained in the $831 million to $855 million range, as articulated in LSB’s third quarter 2015 earnings press release on Nov. 6, 2015.

Additionally, LSB announced that Michael Foster has been appointed senior vice president, general counsel and secretary, effective Jan. 5, 2016. Foster assumes the role from David Shear, who has resigned to pursue personal interests.

Potash Corp. of Saskatchewan Inc. has announced that it is taking the difficult but necessary step to indefinitely suspend its Picadilly, New Brunswick potash operations. The suspension is expected to result in a workforce reduction of approximately 420-430 people in New Brunswick. A core crew of approximately 35 employees will be retained at Picadilly to keep the operation in care-and-maintenance mode.

“This is a very difficult day for our employees and our company,” said PotashCorp President and CEO Jochen Tilk. “While these are important steps in running a sustainable business and positioning the company to best meet the needs of its many stakeholders over the long term, such decisions are never easy. We understand the significant impact to our people in New Brunswick and the surrounding communities, and are committed to helping those affected through this challenging time.”

With an aim of minimizing the impact to jobs, more than 100 open positions will be available for New Brunswick employees to join the company’s Saskatchewan operations, along with relocation assistance. Employees who do not remain at Picadilly or who choose not to relocate to Saskatchewan will be provided severance and assistance packages.

To assist employees and local residents, PotashCorp will also be establishing a C5 million community investment fund which will include funding streams to: help employees with job transition assistance, including skills training and educational support; provide financial support to local businesses; and support local charitable organizations.

PotashCorp cited a challenging macroeconomic backdrop, and said the suspension of our New Brunswick operations helps position the company to: optimize production to lower-cost potash operations; realize meaningful capital savings; maintain long-term operational flexibility; and preserve jobs across the company over the long term.

By optimizing production, it expects to increase competitiveness and reduce cost of goods sold by $40-$50 million in 2016, although this will be partially offset by severance and transition costs. 

The suspension of potash operations at Picadilly will also eliminate significant capital expenditures, including capital of approximately $50 million in 2016 and $135 million in 2017/18.

PotashCorp’s international customers that were historically served by New Brunswick will now be served from Saskatchewan through Canpotex. PotashCorp’s storage and loading facilities at the port of St. John – including capacity of up to 2.5 million mt/y – will be made available to Canpotex. East Coast transportation costs – including rail costs and ocean freight – are expected to approximate levels currently realized through West Coast delivery. The company’s volume entitlement within Canpotex will increase by 750,000 mt, representing an approximate 51.5 percent allotment beginning in 2016.

The Picadilly mine will be placed in care-and-maintenance mode at an estimated annual cost of $20 million in 2016 and $15 million in subsequent years. Should the company decide to resume operations at Picadilly, it would require a period of about one year.

Given that New Brunswick operations has been on inventory adjustment shut down since the end of November, the suspension of operations will be effective immediately. In addition to the core crew of people who will continue to be employed for care-and-maintenance, PotashCorp anticipates up to 100 employees will remain in place through a transitional period of approximately 4 months.

As originally planned, environmental remediation work and care-and-maintenance at Cassidy Lake will continue, as will decommissioning at Penobsquis.

Severance and transition costs associated with the suspension of potash operations are expected to approximate $35 mil

Both major Tampa sulfur buyers are settling first-quarter 2016 business at $95/lt, down from the fourth-quarter level of $110/lt. Initially word was that The Mosaic Co. had settled at that level (GM Jan. 15, 2016). However, it now appears that Potash Corp. of Saskatchewan Inc. has also begun settling contracts at the same number.

Intrepid Potash Inc. has confirmed an approximate 5 percent company-wide reduction in employment, as well as other cost reduction measures. The company said it took the steps in light of the current potash price environment. As a result, some 44 jobs were cut company-wide, with some 39 of those at the Carlsbad, N.M. location.

Trammo Inc., New York City, announced three senior management changes Jan. 11. Christian Wendel has left his positions as a member of the company’s board of directors and as CEO of its Commodities division. Wendel’s responsibilities will be assumed by Brent Hart, currently President of the Commodities division, North America.

"We recognize and appreciate Chris’ very important contribution to our company during the past 17 years," said Henk van Dalfsen, Trammo CEO. "Chris has brought new products, new ideas and much energy to Trammo."

Since joining Trammo in 1995, Brent Hart has held several senior positions with the company. "We are pleased that Brent will take the helm of our Commodities division," said van Dalfsen. "Brent is a highly experienced trader, an outstanding manager and a team builder. His leadership will ensure Trammo’s further growth and continued success."

Jeffrey Minnis will succeed Hart as President of the Commodities division, North America. Minnis has been with Trammo for 11 years and is currently Senior Vice President and head of Ammonia Trading for North America.

In addition, Trammo announced that Dave Smothermon, CEO of Trammo’s Gas division, has been elected to the board of directors of Trammo Inc.  "Dave has been with Trammo for eleven years and is an extraordinarily talented trader and manager," said van Dalfsen.  "With the addition of Hart and Smothermon, all three Trammo divisions will be represented at the board level through their top executives. This ensures a healthy balance of trading and corporate representation."