US phosphate and specialty fertilizer producer Itafos Inc. announced on Sept. 7 that it has entered into an agreement with J.R. Simplot Company under which Itafos will sell 100% of the MAP produced at its Conda, Idaho, manufacturing facility to Simplot. The offtake agreement will begin on Jan. 1, 2024, with a five-year term.
The new offtake agreement replaces an earlier one that Houston-based Itafos had with Nutrien Ltd. Itafos agreed in 2018 to pay $100 million for the Conda Phosphate Operations from Agrium Inc., a wholly owned subsidiary of Nutrien. The sale was required by the US Federal Trade Commission as a condition for its approval of the merger of Agrium and Potash Corp. of Saskatchewan (GM Jan. 19, 2018).
As part of the 2018 deal, Agrium and Itafos entered into long-term supply and offtake agreements, with Agrium supplying Conda with 100% of its ammonia requirements and agreeing to purchase 100% of the MAP produced, with pricing formulas based on major phosphate benchmarks.
Itafos did not announce whether it will continue buying ammonia from Nutrien for Conda’s MAP production. Itafos also has a long-standing partnership with MacroSource (formerly Gavilon) to supply the distributor with phos acid from Conda (GM Dec. 6, 2019). No mention was made of the Gavilon agreement in Itafos’ announcement.
Itafos reported earlier this year that its Board of Directors had commenced a process to explore various strategic alternatives to enhance value, including a merger with another strategic partner, the sale of the company, and a recapitalization or continued execution of the company’s long-term business plan (GM March 17, p. 1).
Itafos puts Conda’s phosphate production capacity at 550,000 mt/y, which includes MAP, MAP with micronutrients, superphosphoric acid, merchant-grade phosphoric acid, and ammonium polysulfate. Approximate MAP capacity has been put at 340,000 /mt/y, with 170,000 mt/y for the other phosphate products. The company also has hydrofluorosilicic acid capacity of approximately 27,000 mt/y (GM July 1, 2022).
Boise-based Simplot has phosphate production capacity of 500,000 mt/y at its Rock Springs, Wyo., facility, 450,000 mt/y at its Pocatello, Idaho, plant, and 100,000 mt/y at its production site in Lathrop, Calif., according to the Green Markets database.