All Posts from November 17, 2023

Waggaman Deal Expected to Close on Dec. 1

Ammonia, Australia, Carbon, Featured

Incitec Pivot Ltd. (IPL) on Nov. 15 announced that the US antitrust regulatory review process in relation to the sale of its ammonia manufacturing facility located in Waggaman, La., to CF Industries Holdings Inc. (CF) has now concluded. IPL and CF expect to complete the transaction on Dec. 1, subject to the satisfaction of other customary closing conditions.

The Australian company and CF in March reached an agreement for the sale of the Waggaman 880,000 st/y (800,000 mt/y) ammonia plant to CF (GM March 24, p. 1).

As previously announced, IPL said the gross proceeds from the sale are $1.675 billion, with cash proceeds (before tax, transaction costs, and purchase price adjustments) of $1.25 billion. CF expects to fund this amount from cash on hand.

After accounting for transaction costs, purchase price adjustments, and tax estimated at around $400 million, IPL said the net cash proceeds from the sale are expected to be approximately $850 million. The tax is expected to be paid in January 2025.

After transaction completion, IPL will commence the previously announced 25-year ammonia supply agreement with CF. The offtake agreement secures ammonia at producer cost and provides for the supply of up to 200,000 st/y of ammonia to support IPL’s Dyno Nobel Americas explosives business.

The ammonia will be priced on a gas-backed formula at a level commensurate with the current cost of production at the plant. In its Nov. 13 earnings statement this week, IPL put the value of the offtake agreement for accounting purposes at an estimated A$300 million, based on the current ammonia and gas price outlook.

IPL Interim CEO Paul Victor said the Waggaman sale delivers three key strategic objectives for the company: “achieving security of ammonia supply for Dyno Nobel’s US operations, delivering significant returns to our shareholders, and rebalancing our portfolio towards more reliable, recurring earnings.”

“Further, through securing the long-term supply agreement with CF, our US explosives business is well positioned to continue to deliver the high-value technical and service needs of our customers,” he said.

IPL has noted that the 200,000 st/y offtake is for a continuous supply of ammonia and is not subject to outages at Waggaman, saying that if you look at the economic benefits, they are much greater than the company had before the sale.

CF believes Waggaman will fit seamlessly into its network, as well as the company’s strategic focus on ammonia as a clean energy source, given its proximity and pipeline connection to CF’s Donaldsonville, La., complex, its distribution and logistics flexibility, and its favorable characteristics for the addition of carbon capture and sequestration (CCS) technologies to enable low-carbon ammonia production. IPL had already been advancing the plant toward blue ammonia production with a front-end engineering design (FEED) study for CCS.

Based on the contracts in place, CF estimates that the plant will generate gross margin per ton commensurate with its existing ammonia segment prior to synergies, which the company expects to capture through greater capacity utilization and operational and logistics optimization. Over the last five years, CF said its operational capabilities have resulted in ammonia asset utilization that is approximately 10% higher than the average utilization rate of the company’s North American peers.

Despite CF’s optimism, the Waggaman plant has not had the smoothest run since its 2016 startup. IPL had to deal with an original construction defect, which, along with other problems, caused significant downtime over the years (GM April 22, 2022; Feb. 25, 2022; Feb. 18, 2022; Nov. 19, 2021; Sept. 17, 2021; May 21, 2021; Nov. 15, 2019; April 5, 2019). As of November 2022, however, IPL said the plant had been running flawlessly since a production restart in April 2022 (GM Nov. 18, 2022). In addition, it exceeded nameplate capacity for FY2023.

Ammonia produced at the Waggaman facility today is distributed ratably to three customers – Trammo Inc., Cornerstone Chemical Co., and IPL’s DNA – with approximately 75% used in industrial applications. These medium- to long-term offtake agreements are expected to remain in place. In the meantime, American Plant Food expects to source ammonia from the Waggaman plant for its proposed 420,000 st/y ammonium sulfate plant (GM Oct 27, p. 1).

With the sale now expected to be completed in early December, IPL confirmed that it intends to return up to A$1 billion (approximately $650.8 million at current exchange rates) of the proceeds of the Waggaman sale to shareholders, as per its Nov. 13 announcement.

IPL said the capital returns will be undertaken through a combination of an on-market share buyback of up to A$500 million (in addition to the previously announced A$400 million buyback) and a distribution of up to A$500 million that will be allocated between a pro-rata capital return and a special unfranked dividend.

These additional capital returns will require shareholder approval, which IPL intends to seek at the upcoming 2023 AGM on Dec. 20.

Waggaman posted a 23% decline in EBIT in the fiscal year ended Sept. 30, 2023, to $264 million from the year-ago $343.8 million, IPL reported on Nov. 13. Revenue fell by 27%, to $456.6 million from $628.8 million.

FY2023 saw improved manufacturing reliability at the Waggaman plant, with ammonia production exceeding the 800,000 mt/y nameplate capacity. Production reached 822,500 mt, a 17% increase on the prior year’s 700,600 mt, according to IPL. Ammonia sales amounted to 829,600 mt, 11% more than FY2022’s 745,900 mt.

Nutrien, CoteX Partner on Coating Technology, Plan CRF for Large Acreage Crops

Canada, Featured, India, Nitrogen

Nutrien Ltd. and CoteX Technologies, an ag tech startup based in Halifax, announced on Nov. 14 that they have entered into a Memorandum of Understanding (MOU) to explore the joint commercialization of a coating technology to produce an affordable, environmentally friendly nitrogen fertilizer solution for large acreage crops in the North American market.

CoteX has already developed a biodegradable coating that allows for controlled-release fertilizer (CRF) and eliminates potential residual material.

“This MOU is a big step forward for the global agriculture industry,” said Santosh Yadav, CEO of CoteX Technologies. “We are thrilled to partner with Nutrien to explore the application of our product and the impact for the market.”

“Our coating process is lower cost and more versatile than liquid coating and it’s environmentally friendly,” he added. “Adoption of our technology helps minimize the loss of nitrogen into the environment.”

“We are excited to begin this journey with CoteX Technologies,” said Trevor Williams, Nutrien EVP and President of Nitrogen & Phosphates. “This innovation has the potential to substantially increase efficiency in nitrogen application which will help farmers increase yield potential in a sustainable way.”  

CoteX has operations in Nova Scotia and Gujarat, India, and said it is supported by a robust provincial and national startup ecosystem. The company is a part of the Ascend Bio program of Invest Nova Scotia, and supported by the Nova Scotia Innovation Hub, Atlantic Canada Opportunities Agency (ACOA), Sustainable Development Technology Canada (SDTC), and BioEnterprise Canada.

One-Year Farm Bill Extension Attached to Government Funding Bill

Featured, U.S.

The farm bill lives on, at least for another year, according to Bloomberg Government, which reported that backers scored a big win this week by attaching a one-year farm bill extension to the massive continuing resolution barely in time to avoid a government shutdown this weekend.

Both chambers this week passed the stopgap measure and sent it to President Joe Biden for signing.

“We worked hard to present our case as to why we needed to do that to leadership,” Sen. John Boozman (R-Ark.) told Bloomberg, adding that bipartisan agreement from agriculture committee leaders in both chambers was crucial to getting the farm bill extension in the funding extension.

“The fact that we’re going to get it done is really important, it gives our farmers the certainty that they’re going to need as they go to bankers and lenders” for credit ahead of the 2024 growing season, Boozman said.

While the one-year extension won’t address calls for enhancing risk management tools, including crop insurance, it ensures that they remain in place through Sept. 30 of next year, Boozman said. “Knowing that there’s this backstop for them, they need to be updated, but at least those risk management tools are in place” in 2024, he said.

The one-year extension gives Congress breathing room to craft a five-year farm bill in 2024. It also allows a chance to go over the wish lists from interest groups ranging from the CEOs of large trade organizations to smaller crop-specific associations.

Matt Carstens, President and CEO of the Iowa-based Landus Cooperative, has three top priorities: ensuring robust conservation and climate measures; preserving and possibly expanding safety nets for growers, including crop insurance; and protecting the Supplemental Nutrition Assistance Program (SNAP).

While SNAP often draws criticism for its costs and a GOP-led effort to impose work requirements, the role the nutrition program plays in supporting demand “particularly for our dairy farmers” gets less attention, Carstens said. “SNAP is important all the way through the farm bill, although it gets more notoriety” than credit for helping growers, he said.

SNAP can drive demand “particularly for things like fresh fruits and vegetables and the dairy industry, all of agriculture really,” Carstens said, noting how many grocery products contain corn and soybeans. SNAP benefits comprise roughly 80% of total farm bill spending.

Carstens said maintaining robust crop insurance support is also crucial to achieving a 2024 farm bill compromise, along with conservation and climate action. “They all tie” together, he said, and “you can’t just talk about one without talking about the other” in crafting a farm bill.

Crop insurance remains a priority for US growers. More than 444 million acres and $150 billion in livestock and crops were insured in 2021, with federal funding – which subsidizes growers’ costs – averaging about $9.1 billion a year over the last decade or so.

The American Farm Bureau Federation (AFBR), which backs increased overall “baseline” funding for the next five-year farm bill, wants a “robust” crop insurance program, meaning no reductions in federal cost sharing helping growers pay premiums. It also wants to broaden the pool to cover specialty crops lacking access to the insurance.

AFBF President Zippy Duvall has touted the billions the US spends each year for a safety net to support growers – from crop insurance to commodity support programs – as a good investment. Such spending accounts for about two-tenths of 1% of federal spending, he said. In return, US food and agriculture in 2022 produced $183 billion of exports, 43 million jobs, and $2.3 trillion in wages, Duvall told the Senate Agriculture Committee in May.

Meanwhile, specialty crop groups such as the American Soybean Association (ASA) want increases in the reference price used to calculate agriculture risk coverage and price loss coverage. The ASA also wants Congress to reject amendments weakening crop insurance and to expand trade promotion programs including USDA’s Market Access Program, which expands commercial export markets.

“Protecting and enhancing farm safety net programs and risk management tools in the farm bill remain top priorities,” said Christy Seyfert, ASA’s Executive Director of Government Affairs. Crop insurance is a “critically important risk management tool that must remain affordable and effective,” she said.

Soybeans also are increasingly being used in biofuels. The ASA wants Congress to codify an existing USDA incentive program promoting greater use of ethanol and biodiesel renewable fuels. Nearly 40% of US soybean oil is used for biofuels production, up from nearly zero two decades ago.

Technologies including artificial intelligence to improve crop yields and reduce growers’ costs were front and center this week in a Senate Agriculture Committee hearing. Witnesses said AI could be a powerful tool, if deployed responsibly, to help growers reduce volatility and adjust to changing weather.

Committee Chairwoman Debbie Stabenow (D-Mich.) told reporters that AI and other “precision agriculture” technologies show promise in helping to “reduce costs and address a number of things, including soil health.” But she warned that there are “a number of issues around data privacy that need to be addressed” more broadly, and not just for agriculture.

The next farm bill “certainly will” address those concerns and will include proposals to help growers better access agriculture technologies, Stabenow said, adding that AI and other advanced technologies must offer concrete benefits to growers and shouldn’t steal the spotlight from other important research.

Witnesses speaking at the hearing this week heralded benefits the new technology may bring, such as increased crop yields and reduced waste, but also said it must provide growers with clear benefits. Lawmakers are eyeing changes to federal loan programs that help farmers adopt new technologies, which could extend to new AI tools.

The hearing followed President Biden’s Oct. 30 AI-focused executive order that directs cabinet agencies, including the agriculture secretary, to issue guidance to state and local governments on the potential use of AI and algorithms in services they provide.

Deere executive Jahmy Hindman backed several legislative proposals to broaden eligibility for some USDA conservation and loan programs to spur more growers to acquire and embrace technology, including data-driven products.

Such incentives are important not just for boosting growers’ productivity and profitability, Hindman testified, but also would help increase food, clothing, and other products needed “to sustain the growing world population.” He urged the committee to consider adding the bills to the next five-year farm bill reauthorization.

Australian Potash Miner Reward Negotiating for Kalium Assets

Australia, Featured, Potash, Sulfate of Potash

Junior Australian potash miner Reward Minerals Ltd. reported on Nov. 16 that it has entered into an exclusivity deed with the Receivers of Kalium Lakes Ltd. relating to the potential acquisition of the Beyondie Sulfate of Potash (SOP) Project located approximately 160 kilometers southeast of Newman, Western Australia.

This will provide a period of exclusivity during which the parties have agreed that they intend to negotiate in good faith to seek to agree to the terms of a sales agreement. Reward was apparently waiting in the wings after another Australian SOP project developer, Agrimin Ltd., pulled out of a proposed deal to buy the Kalium assets in October (GM Oct. 6, p. 1).

Perth-based Reward said it has been investigating the purchase for some time. “It is rare that the opportunity exists to acquire an asset such as the Beyondie SOP Project,” said Dr. Michael Ruane, Reward’s Executive Director. “The project is well advanced in a technical sense and is a perfect fit with the Reward team skill set.”

“A further bonus of the acquisition is that with relatively minor modifications, the Beyondie operation will serve as a low-cost R&D facility required to confirm the operational parameters associated with the new Reward Process,” Ruane added. “Laboratory test work already undertaken suggests that the Beyondie feed brine responds well to the Reward Process.”

Reward estimates the previous owners have spent more than $400 million on the Beyondie Project, which resulted in its being the only producing sulfate of potash (SOP) mine in Australia. The first SOP was produced in October 2021, but numerous operational obstacles and a lack of more financing eventually put the company in receivership.

Reward paid A$250,000 for the exclusivity agreement, which will be deducted from the purchase price should a deal be completed.

In addition to the exclusivity payment, Reward, under a nonbinding term sheet that is still subject to negotiation, would pay $14.75 million cash on completion of the transfer of all shares of Kalium Lakes Infrastructure Pty Ltd. (KLI) and Kalium Lakes Potash Pty Ltd. (KLP). There is a final $5 million cash payment due by June 30, 2025.

Reward said the expected date of completion is Jan. 25, 2024, but it said this may be extended by agreement of the parties.

Reward has two other potash projects in Australia, including its flagship Kumpupintil Lake Potash (formerly called Lake Disappointment Potash Project) east of Newman in northwestern Western Australia, and the Carnarvon Potash Project north of Carnarvon in northwestern Western Australia.

IPL Posts Full-Year Profit Decline, Beats Estimates

Australia, Earnings

Melbourne-based Incitec Pivot Ltd. (IPL) on Nov. 13 reported a 45% decline in net profit after tax (NPAT) for the full year ended Sept. 30, to A$560.0 million (approximately $354.4 million at current exchange rates), down from the year-ago A$1.01 billion. The result beat the average analyst estimate of A$529 million (Bloomberg Consensus).

FY2023 NPAT excluding individually material items (IMIs) came in at A$582.1 million, down 43% from the year-ago A$1.03 billion, which IPL noted benefited from a very strong commodity price environment. Earnings per share excluding IMIs were 30.0 Australian cents versus 52.9 cents in FY2022.

EBIT excluding IMIs was down 41% year-over-year, to A$879.9 million from A$1.4.85 billion in FY2022. IMIs totaled A$880 million and included A$612 million related to the impact of commodity and foreign exchange movements, as well as A$144 million related to the closure of the Gibson Island manufacturing plant in January.

Full-year revenue was 5% lower than the prior-year, at A$6.01 billion versus A$6.32 billion.

“I’m pleased with our performance in the second fiscal half where strong underlying earnings growth was underpinned by our continuous focus on delivering leading technology and services for our customers,” said IPL Interim CEO Paul Victor. We end the period with significant momentum and start FY2024 on the front foot.”

Dyno Nobel Americas (DNA) reported a 27% decline in full-year EBIT, to $390 million from the year-ago $532.8 million. IPL cited a strong second-half performance in the Explosives business and improved reliability at the Waggaman, La., ammonia plant.

In contrast, Dyno Nobel Asia Pacific (DNAP) posted a 16% increase in EBIT, to A$188.3 million from A$162.5 million. IPL cited strong customer demand for DNAP’s premium technology, record production at the Moranbah ammonium nitrate plant in Queensland, and higher international earnings.

IPL’s fertilizers business, Fertilisers Asia Pacific, saw a 75% decline in full-year EBIT, to A$153.2 million from the year-ago A$613.7 million, missing the average analyst estimate of A$179.7 million (Bloomberg Consensus). Revenue declined by 17%, to A$2.20 billion from A$2.65 billion.

IPL said strong second-half fertilizer sales helped offset difficult trading conditions resulting from declining commodity prices. Domestic fertilizer sales volumes were up 9% year-over-year, to 2.04 million mt from 1.87 million mt, while total fertilizer sales volumes were up 5%, to 2.70 million mt from 2.58 million mt.

IPL noted that unplanned outages at the Phosphate Hill ammonium phosphate manufacturing plant in northern Queensland and higher gas costs negatively impacted the result, however. Gas supply outages at Phosphate Hill (GM June 9, p. 25) increased FY2023 gas costs by A$38 million.

Despite the outages, Phosphate Hill produced 17% more ammonium phosphates in FY2023, to 864,400 mt from 735,900 mt a year earlier, but was below the targeted 900,000-930,000 mt (GM June 9, p. 25). IPL said it has implemented a taskforce at the site to address and implement recommendations to improve reliability.

Victor said a potential buyer of IPL’s Fertilisers business had completed due diligence, but he did not comment on the identity of the buyer. There has been speculation that Indonesia’s PT Pupuk Kalimantan Timur (Pupuk Kaltim) is the preferred buyer (GM Sept. 15, p. 1) and, according to Australia’s Financial Review, is now negotiating over price.

Victor this week said a trade sale is “a high priority” provided that an acceptable price can be reached, and rejected suggestions that IPL might be squandering value by preparing to sell the business at a low point in the cycle, according to the Financial Review.

He cautioned, however, that a sale was not the only potential outcome, with IPL already having done a large amount of work to get its explosives and fertilizers arm ready for a structural separation after the plan was first announced in May 2022 (GM May 27, 2022).

With the sale of the Waggaman plant now expected to be completed in early December, IPL confirmed that it intends to return up to A$1 billion (approximately $650.8 million at current exchange rates) of the proceeds of the Waggaman sale to shareholders.

IPL also reconfirmed its commitment to completing the previously announced on-market buyback of up to A$400 million during permissible trading windows (GM Nov. 18, 2022). The company on Nov. 15 reiterated, however, that it is unable to start the buyback while a potential sale of the Fertilisers business is in progress.

K+S 3Q EBITDA Drops, Maintains FY2023 Guidance

Brazil, Earnings, Germany, Potash

Germany’s K+S Group reported an 89% drop in EBITDA for the third quarter, to €72.2 million (approximately $78.4 million at current exchange rates) from the year-ago €633.3 million. Analysts said the decline was not as much as expected, however, with the result beating the average analyst estimate of €55.8 million (Bloomberg Consensus).

Third-quarter revenues were down 40% year-over-year, to €880.9 million from €1.47 billion, also beating the average analyst estimate of €840.7 million. K+S cited higher volumes in the Agriculture customer segment and a recovery in potash prices in Brazil as driving the third-quarter EBITDA result, and is upbeat for the near term.

“Overall, the third quarter was a solid quarter that performed somewhat better than initially expected,” said Burkhard Lohr, K+S CEO and Chairman of the Board. “We saw a significant increase in demand, and this enabled a significant volume increase in our agriculture customer segment, and finally resulted in the expected price recovery in the important overseas market of Brazil.”

K+S said it expects to meet its previously guided annual EBITDA forecast for full-year 2023 of between €600-€800 million (2022: €2.4 billion). The company lowered its EBITDA guidance in late July, largely due to potassium chloride prices in the second quarter, particularly in the Brazilian market (GM July 28, p. 26). Full-year adjusted free cash flow is still expected to range between €300-€450 million (2022: €932 million).

However, K+S’s adjusted group earnings after tax swung to a €24.3 million loss in the third quarter versus a positive €378.7 million in the same prior-year period. Adjusted earnings per share were a negative €0.13 compared with the previous year’s €1.98.

The Agriculture segment posted a 47% fall in third-quarter revenues, to €620.7 million from €1.16 billion, which the company attributed primarily to lower prices. Total sales volumes for the segment were up 20% year-over-year, to 1.87 million mt from 1.56 million mt. Third-quarter potassium chloride sales volumes grew 26%, to 1.19 million mt, while fertilizer specialties sales volumes were up 11%, to 0.68 million mt.

Sales volumes for Europe increased 56% for the quarter, to 0.86 million mt from the year-ago 0.55 million mt, while Overseas volumes were flat year-over-year at 1.01 million mt. K+S said it continues to expect sales volumes for all products in the Agriculture segment to range from 7.0-7.4 million mt in full-year 2023, compared with 7.11 million mt in 2022.

In the Industry+ segment, third-quarter revenues were down 15%, to €260.1 million from the year-ago €307.1 million. K+S said higher sales prices could not fully offset lower average prices for products containing potash, as well as an 8% decline in segment sales volumes, to 1.55 million mt from 1.68 million. De-icing salt sales volumes alone were down 9%, to 0.44 million mt from 0.48 million mt.

For the first nine months, K+S reported a 71% decline in EBITDA, to €550.2 million on revenues of €2.899 billion, down from last year’s €1.86 billion and €4.19 billion, respectively. Revenues fell 31% year-over-year.

Nine-month Agriculture segment revenues fell 39%, to €2.04 billion from €3.35 billion, while Industry+ customer segment revenues were up 2%, to €859.6 million from €841.2 million.

Nine-month group adjusted earnings after tax fell 86% year-over-year, to €153.1 million from €1.13 billion. Adjusted earnings per share for the period were €0.81 compared with the previous year’s €5.89.

When asked about the company’s full-year EBITDA forecast, Lohr noted some potential “risks ahead,” including a threatened strike from the German train drivers’ union GDL. A K+S spokesperson confirmed that the strike risk has been factored into the company’s full-year sales volumes projection for the Agriculture customer segment.

“The GDL already did a warning strike on Nov. 15, and if they do not reach an agreement with Deutsche Bahn AG, there could be further strikes this month or next, which could affect the transportation of our potash and salt products from our sites to the ports,” Lohr said.

Under a new distribution policy, K+S aims to return 30-50% of the adjusted free cash flow generated annually to shareholders, by dividend, which can be combined with a share buyback, if applicable. Regarding the 2023 share buyback program, the company noted that 56% of the planned €200 million had already been bought back as of Sept. 30.

K+S Agriculture Customer Segment

  3Q-2023 3Q-2022 % change 9M-2023 9M-2022 % change
Revenues (€ million) 620.7 1,162.8 (47) 2,039.0 3,351.0 (39)
             
Potassium Chloride 382.5 779.5 (51) 1,276.1 2,254.0 (43)
Fertilizer Specialties 238.2 383.3 (38) 762.9 1,097.0 (31)
             
Sales Volumes Million mt 1.87 1.56 +20 5.27 5.22 +1
             
Potassium Chloride 1.19 0.95 +26 3.40 3.23 +5
Fertilizer Specialties 0.68 0.61 +11 1.87 1.99 (6)
             
Revenues (€ million) 620.7 1,162.8 (47) 2,039.0 3,351.0 (39)
Europe (€ million) 300.1 372.0 (19) 872.0 1,264.9 (31)
Overseas ($ million) 349.0 796.3 (56) 1,262.2 2,209.2 (43)
             
Sales Volumes Million mt 1.87 1.56 +20 5.27 5.22 +1
Europe 0.86 0.55 +56 2.07 2.15 (4)
Overseas 1.01 1.01 0 3.20 3.07 +4
             
Average Price (€/mt) 331.4 744.5   386.9 641.0  
Europe (€/mt) 349.2 675.9   420.6 586.9  
Overseas ($/mt) 344.3 787.3   394.9 719.1  

Lower Lithium, Fertilizer Prices Impact SQM’s 3Q

Asia, Earnings, Lithium, Potash, Potassium Nitrate

SQM Inc. reported third-quarter net income of $479.4 million, down 56.4% from the year-ago $1.1 billion. The company missed analyst projections (Bloomberg Consensus), which predicted only a 47% drop, to $578.5 million. Revenues were off 37.8%, to $1.84 billion from the year-ago $2.96 billion, while adjusted EBITDA dipped to $788.2 million from $1.66 billion.

“The third quarter 2023 results were impacted by significantly lower average sales prices in lithium and fertilizer business lines, partially offset by higher sales volumes, when compared to the same period last year, and higher iodine sales prices,” said SQM CEO Ricardo Ramos. “When compared to the second quarter this year, our third quarter earnings were lower by 17%, mainly due to lower realized lithium prices.”

“We continue to see strong fundamentals behind long-term lithium demand growth, supported by strong EV sales volumes and decarbonization targets across the globe,” Ramos said. “However, the excess of inventory accumulated across battery and lithium chemical supply chains, particularly in Asia, as well as additional lithium supply, have put pressure on lithium market prices and could continue to have a negative impact on lithium prices in the short-term.”

“As we continue with our expansions in Chile, our lithium carbonate capacity has reached 200,000 mt/y, and we expect to complete the expansion to 210,000 mt in the beginning of 2024, earlier than anticipated,” Ramos added. “This will enable us to redirect our attention to lithium production cost, ensuring that we maintain our cost competitive position. In Australia, the first production of spodumene concentrate at Mt. Holland is expected during this quarter, while in China, we have commenced lithium hydroxide production from lithium sulfate.”

Third-quarter Lithium revenues were off 45%, to $1.28 billion from the year-ago $2.33 billion, while volumes were up 4%, to 43,300 mt from 41,600 mt. Average prices were off 47%, to $30/kg versus $56/kg.

Third-quarter Specialty Plant Nutrition (SPN) revenues were off 24%, to $221.7 million from the year-ago $292.5 million, though sales volumes were up 8%, to 224,400 mt from 207,900 mt. Most of the volume increase was due to Specialty Blends, which saw a 31% uptick, to 81,800 mt from 62,300 mt. Potassium nitrate-based product volumes were off 4%, to 104,100 mt from 108,500 mt.

Average SPN prices were $990/mt, down from the year-ago $1,410/mt. SQM believes that the downward price trend could be over and market prices may have reached the bottom. It said the demand recovery seen in the third quarter is anticipated to continue for the remainder of the year and extend into 2024, potentially resulting in strong potassium nitrate market demand growth during 2024 when compared to 2023.

Third-quarter Potassium segment sales volumes soared 169%, to 168,700 mt from the year-ago 62,700 mt, and revenues were up 25%, to $75.2 million from $60.2 million. The average price for the quarter was $450/mt versus the year-ago $960/mt. SQM believes the price decrease could have a positive impact on global potash market demand, resulting in a growth of approximately 10 million mt during this year when compared to 2022. SQM expects to sell over 500,000 mt of potassium in 2023, up from 2022’s 480,500 mt (GM March 3, p. 24).

SQM’s nine-month net income was $1.81 billion on revenues of $6.16 billion, off from last year’s $2.76 billion and $7.58 billion, respectively. Adjusted EBITDA was $2.75 billion, down from $4.17 billion. SQM noted that its total contribution to the Chilean treasury neared $2.4 billion during the nine-month period, including payments related to its public-private alliance with CORFO.

Nine-month Lithium revenues were down 22%, to $4.39 billion from the year-ago $5.63 billion, while volumes were up 4%, to 118,700 mt from 113,800 mt.

Nine-month SPN revenues declined 23%, to $690.2 million from $898.1 million, while volumes were off 5%, to 614,300 mt from 648,600 mt. Specialty Blend volumes were up 8%, to 181,200 mt from 167,600 mt, while potassium nitrate-based volumes declined 15%, to 316,500 mt from 371,100 mt.

Nine-month Potassium revenues fell 36%, to 228,200 mt from the year-ago 356,700 mt, while volumes were up 13%, to $430.5 million from $382 million.

PhosAgro Reports 15% Drop in 3Q EBITDA

Earnings, Russia

PJSC PhosAgro posted a 15% decline in adjusted EBITDA for the third quarter, to RUB48.5 billion (approximately $539.4 million at current exchange rates), according to an Interfax report, citing a company statement. PhosAgro’s adjusted net profit for the quarter was down 35% year-over-year, to RUB27.1 billion.

As of Sept. 30, 2023, the Russian fertilizer group’s net debt amounted to RUB227.9 billion ($2.34 billion). The ratio of net debt to adjusted EBITDA increased to 1.3x at the end of the quarter, up from 1.09x at the end of the second quarter, according to the report.

Truterra LLC – Management Brief

Management Briefs, U.S.

Sustainability solutions provider Truterra LLC, Arden Hills, Minn., on Nov. 15 announced that it has named Jamie Leifker as its next President. The company said he brings more than 25 years of experience in agriculture, including a track record in leadership at WinField United and Land O’Lakes Inc.’s crop input and insights business, in addition to previous industry experience. Truterra was launched in 2016 by Land O’Lakes.

Leifker most recently served as Winfield United’s Vice President of New Markets and Growth Services and was responsible for working with ag retailers to provide risk management services, as well as with downstream companies to deliver on customizable supply chain needs. Prior to that he led Winfield’s Agronomy and Product Development team, which included leadership of the WinField United Innovation Center.

“Jamie’s career spans the spectrum of applicable experience that make him the perfect choice to help the Truterra reach the next level as a leader in agricultural sustainability,” said Brett Bruggeman, Chief Operating Officer at Land O’Lakes. “His background in agronomy, plus his experience working with both local ag retailers and customers, is in lockstep with Truterra’s mission and go-to-market approach.”

ICL Group Ltd – Management Brief

Management Briefs

ICL Group Ltd. President and CEO Raviv Zoller reported in the company’s third-quarter earnings call that it has recruited Uri Perelman to join ICL’s management team as an Executive Vice President and as the company’s Chief Business Development Officer. He will be tasked with helping to accelerate ICL’s business development, M&A, and strategic partnership efforts.

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