All Posts from April 15, 2014

K+S inks deal with British Columbia terminal

Pacific Coast Terminals Co. Ltd. (PCT) and K+S Potash Canada General Partnership (K+S Potash Canada) on April 14 signed an exclusive, long-term contract for the handling and storage of potash products from K+S Potash Canada’s Legacy mine site.

Under this agreement, the parties will construct a new potash handling facility at PCT’s bulk handling terminal located in Port Moody, British Columbia. Potash products arriving by rail from the Saskatchewan-based Legacy mine will be unloaded and stored on site and loaded to vessels destined for K+S Group’s international clients.

K+S Potash Canada and PCT are forming this longstanding partnership to ensure that the transport of the Legacy potash products to international clients is handled with high quality standards, state-of-the-art technology and in a manner that is both secure and competitive. Commissioning and mechanical completion of the new potash handling facility are planned for the fall of 2016.

The construction program will include infrastructure, a new railcar unloading station, new covered conveyor systems, systems to control dust emissions and a new storage warehouse. It will start immediately after the required permits from the authorities are issued. Additionally, dredging of the Burrard Inlet will deepen the shipping channel to allow improved vessel navigation and vessel transit windows.

“We are very pleased to have signed a contract with PCT, whose terminal operations are located at a strategically favorable location in Port Moody,” says Dr. Ulrich Lamp, President and CEO, K+S Potash Canada. “PCT will provide its excellent expertise to store and handle the potash produced at the Legacy mine, and will allow K+S to deliver potash products to emerging regions in Asia, South America and North America. This world class facility will meet internationally recognized environmental standards.”

“PCT couldn’t be more pleased with this agreement,” stated Lorne Friberg, President and CEO of Pacific Coast Terminals Co. Ltd. “Working in collaboration with K+S Potash Canada provides significant mutual benefits to both of our organizations. The expansion of our operations also allows for a greater contribution to the City of Port Moody in terms of new jobs, additional municipal taxes, and increased support to local community organizations and events”.

BNSF promises more unit trains to address N.D. rail backlog

In response to growing concerns about delayed fertilizer deliveries to North Dakota dealers and farmers, Sen. John Hoeven (R-N.D) reported on April 14 that he has received assurances from BNSF Railway Executive Chairman Matt Rose that the railroad is assigning additional unit trains and adding crews to address the problem.

According to an announcement from Hoeven, the senator pressed Rose over the weekend on the importance of getting fertilizer to farmers within the critical planting window. Hoeven said Rose responded by saying that BNSF is reallocating resources to significantly reduce the delays, including assigning unit trains with
locomotives to move fertilizer products more quickly. Hoeven said Rose also promised to add more crews to move the increased unit trains, and to work with customers to load and unload cars rapidly.

“Dedicated unit trains carrying only fertilizer will enable the cars to get to their destination without being uncoupled and reassigned multiple times before arriving,” Hoeven said. “This will allow the fertilizer cars to keep moving.”

Hoeven’s announcement came just five days after North Dakota Gov. Jack Dalrymple signed an executive order waiving the Hours of Service (HOS) requirements for drivers of commercial motor vehicles transporting anhydrous ammonia in North Dakota.

Citing “lengthy rail delays” and a disruption in ammonia production at Agrium Inc.’s Redwater fertilizer plant in Alberta, Dalrymple said a “state of emergency” exists that makes the waiver necessary to ensure that carriers, agribusinesses, and farmers “can secure, obtain, transport, and deliver anhydrous ammonia to meet the needs of our state.” The waiver will remain in effect through May 24, 2014.

Mosaic buys ADM Brazil and Paraguay distribution assets

The Mosaic Co. signed definitive agreements today with Archer Daniels Midland Company to acquire its fertilizer distribution business in Brazil and Paraguay for $350 million. The purchase price assumes the delivery of $150 million in working capital at closing. Mosaic says the acquisition is expected to significantly accelerate Mosaic’s previously announced growth plans in Brazil as well as replace a substantial amount of planned internal investments in that country. Under the terms of the agreement, Mosaic would acquire four blending and warehousing facilities in Brazil, one in Paraguay and additional warehousing and logistics service capabilities.

The acquisition of ADM’s fertilizer distribution business would increase Mosaic’s annual distribution in the region from approximately 4 million mt to about 6 million mt of crop nutrients. In addition to the acquisition, Mosaic is in process of completing approximately $100 million in projects including expansion of the company’s port terminals, plants and production capabilities.

"The addition of ADM’s fertilizer distribution business in Brazil and Paraguay facilitates two critical strategic priorities for Mosaic. It enhances our global growth strategy and expands our market access," said Mosaic President and CEO James Prokopanko. "This acquisition provides a critical distribution platform in one of the world’s fastest growing agricultural regions, and it complements our other recent strategic initiatives, including our joint venture in Saudi Arabia, our recent acquisition of CF Industries’ phosphate business and our ongoing potash expansion program."

"Acquiring ADM’s fertilizer distribution business accelerates our existing growth plans in Brazil and provides access to new customers throughout the country and in Paraguay," said Tobias Grasso, Mosaic’s Country Manager in Brazil. "We will gain scale and operating efficiencies through this acquisition, as well as a talented group of employees who will join our team."

The parties have also negotiated the terms of five-year fertilizer supply agreements providing for Mosaic to supply ADM’s fertilizer needs in Brazil and Paraguay.

Mosaic will fund the acquisition with cash from operations. The transaction is not expected to impact Mosaic’s shareholder distribution plans. The proposed sale will be contingent on customary regulatory approvals.