All Posts from May 17, 2019

The Sulphur Institute – Management Brief

Management Briefs

The Sulphur Institute (TSI), Washington, D.C., announced on May 6 that Tom Simpson, Director, Sulfur Purchasing at Nutrien Ltd., has assumed responsibilities as TSI Chairman of the Board, and John Bryant has assumed the role of President and CEO following the retirement of Robert McBride. Both appointments followed TSI’s Annual General Meeting on April 15, 2019.

“I look forward to working with the Institute and its members to advocate on behalf of the sulfur and sulfuric acid industries,” said Simpson. “I would like to thank Rob McBride for his five plus years of dedicated service as the President and CEO of The Sulphur Institute. Rob came to us at a critical time, and he has put the Institute in a great place for future growth and expansion of services. I would also like to welcome John to the TSI Management Team. He is a veteran in the industry, and I look forward to partnering with him on future endeavors.”

Tiger-Sul Products – Management Brief

Management Briefs, Specialty

Tiger-Sul Products, Shelton, Conn., announced that Kenneth Waters has been named territory manager for the South-Central region of the U.S. In his new position, he will be charged with growing sales of Tiger-Sul’s sulfur bentonite product line, sulfur bentonite micronutrients technology, and the company’s other crop performance products in Florida, Georgia, Alabama, Arkansas, Mississippi, Louisiana, Oklahoma, South Carolina, Texas, and Tennessee.

Waters rejoins Tiger-Sul after serving with the Tiger team back in 2000. The company said he has nearly 30 years of industry experience, most recently working as general manager for an agriculture cooperative in Frisco City, Ala. “We look forward to supporting Kenneth as he utilizes his customer relationship-building experience and agronomic knowledge to help commodity, specialty, and citrus growers in his territory,” said BJ Harrington, Tiger-Sul’s Marketing Manager.

 

Saconix – Management Brief

Management Briefs

Saconix, a sulfuric acid and industrial chemicals logistics company based in Roswell, Ga., announced on May 13 that it has hired Jeff Stein as Vice President of Business Development. Stein will be focused primarily on business expansion through acquisitions, new build construction, infrastructure development, and logistical solutions. Saconix is a wholly-owned subsidiary of Copperbeck Energy Partners LLC.

Stein’s previous work experience includes many years with PVS, where he most recently headed the company’s Chlor-Alkali division, PVS Chloralkali Inc. Prior to PVS, he served as a Business and Account Manager at BCS (Basic Chemical Solutions), and as a Business and Supply Chain Manager with Jones Hamilton. In his new position with Saconix, he can be reached at 469.490.3988; by cell at 419.349.5112; and by email at jeff.stein@saconix.com.

Minnesota Approves HOS Exemption

Ammonia, Featured, News, Northern Plains

Minnesota Gov. Tim Walz signed an emergency order granting a temporary exemption from Hours of Service (HOS) requirements in state law for drivers of commercial vehicles delivering anhydrous ammonia or other fertilizers to Minnesota Farmers. The emergency order, which went into effect on May 10 and continues for 30 days, came in response to cold, wet weather that has delayed the planting season, as well as “delivery delays due to infrastructure damage” caused by flooding.

“These weather events have delayed and shortened the spring planting season, causing farmers in multiple states to begin fieldwork at the same time and increasing the demand for anhydrous ammonia and other fertilizers,” the governor’s office said in a statement.

Minnesota’s temporary HOS exemption for ammonia and other fertilizers follows similar measures approved by North Dakota Gov. Doug Burgum on April 23 (GM April 26, p. 1), and by Montana Gov. Steve Bullock on April 8 (GM April 12, p. 31), with both citing a “compressed spring planting schedule” and increased fertilizer delivery demands facing farmers. The North Dakota waiver will remain in effect through May 31, while the Montana order will expire at midnight on June 6.

The fertilizer industry has been dealing with a trifecta of transportation issues this spring, including significant delays for barges on flooded portions of the Mississippi, Arkansas, Missouri, and Illinois Rivers, as well as limitations on rail traffic in parts of the Midwest due to flooded tracks and washed out bridges. The trucking industry has been impacted as well, by both a critical driver shortage and the mandated use of electronic logging devices (ELDs) for most commercial haulers.

The ELD mandate went into effect in December 2017, and essentially forces drivers to abide by HOS restrictions, which state that long-haul truckers are only permitted to drive a maximum of 11 hours in a consecutive on-duty window of 14 hours, after which they must be off duty for 10 hours. Drivers are also currently required to take a 30-minute break at some point in their 14-hour work day, although the Federal Motor Carrier Safety Administration (FMCSA) in September 2018 said it was reconsidering that limitation, along with possible changes to the 14-hour work day.

 

 

Fire at Allan Mine Forces 63 Workers to Underground Shelters

Featured, News, Potash, Saskatchewan

A fire at Nutrien Ltd.’s Allan potash mine in Saskatchewan early on May 14 confined 63 workers to underground refuge stations for several hours. Operations at the mine were suspended on May 14 but resumed on May 15, according to a Nutrien spokesperson. The cause of the fire is still under investigation.

According to local press, the blaze broke out sometime after midnight, forcing the miners to evacuate to underground shelters while Nutrien’s emergency response crews worked to extinguish the fire. The miners were brought to the surface at about 7:45 a.m., with no injuries reported. No additional assistance was required from the local volunteer fire department.

CTV News reported that one of the trapped miners said crews were alerted to the problem by “stench gas,” which produces a sulfur smell and is released throughout the mine when there is an emergency. Crews then quickly moved to refuge stations, which are set up throughout the mine. The miner said workers receive extensive training on emergency procedures.

The Allan mine is one of six potash mines that Nutrien operates in Saskatchewan. Total nameplate production capacity at the mine is 4 million mt/y, while current operational capacity is 2 million mt/y.

Back in December 2016 (GM Dec. 23, 2016), approximately 114 workers at the Allan mine were forced to shelter in underground refuge stations for 6-9 hours after a scoop loader caught fire. Two years earlier (GM Sept. 22, 2014) in September 2014, smoke from a vehicle fire trapped 96 workers in underground stations at the mine, with 54 of those forced to remain sheltered until the following day. Neither fire resulted in injuries, although the mine remained offline for five days in 2014.

Nutrien to Cut Capacity, Jobs at Vanscoy Mine

Featured, News, Potash, Saskatchewan

Nutrien Ltd., Saskatoon, Sask., announced on May 14 that it plans to cut production capacity at its Vanscoy potash mine in Saskatchewan from 2.2 million mt to 1.7 million mt in the third quarter of 2019, and to reduce staffing levels at the mine by approximately 20 full-time employees and 60 hourly positions.

“Given the potash market continues to be in a state of recovery, it is critical that Nutrien’s potash network remain competitive globally,” the company said. “Nutrien expects to increase production at its lower cost mines and anticipates around 80 vacancies at other Saskatchewan sites over the remainder of 2019.”

The announcement follows earlier cuts to Vanscoy capacity and staffing levels that Nutrien implemented in late 2018 as part of ongoing efforts to rebalance the company’s overall potash production. The 2018 changes, which were announced last August (GM Aug. 3, 2018), reduced Vanscoy staff by 30 full-time and 50 hourly positions, leaving approximately 585 employees at the site. Nutrien also announced last August that it was shifting some 400,000 mt/y of potash production from Vanscoy to other Nutrien mines in Saskatchewan. Total nameplate capacity at Vanscoy is approximately 3 million mt/y.

“Nutrien is committed to supporting the transition for our impacted employees and their families during this difficult period,” said Susan Jones, CEO of Nutrien Potash, on May 14. “We will do all that we can to relocate employees to job vacancies across our network. The changes announced today will allow our Vanscoy site to operate in a more sustainable state and provide remaining employees a more stable future.”

Nutrien has been shifting potash production capacity to its low-cost Rocanville mine, where a $3 billion expansion was completed in the fall of 2017 (GM Oct. 13, 2017). Upgrades at the legacy Potash Corp. of Saskatchewan Inc. mine took nameplate capacity at Rocanville from 3 million mt/y up to 6.5 million mt/y, and doubled the site’s workforce to more than 750 employees.

Nutrien owns and operates six of the 10 potash mines in Saskatchewan, and touts the Rocanville mine as its lowest cost operation. In addition to Vanscoy and Rocanville, the company’s other potash mines are at Lanigan, Patience Lake, Allan, and the Cory facility in Saskatoon.

The Andersons Offers Organic Ferts from New Indiana Warehouse

News, News Briefs, Specialty

The Andersons Inc., Maumee, Ohio, announced on May 14 that a new warehouse at the company’s Waterloo, Ind., location is now offering OMRI-certified organic plant nutrients, in addition to products and services for conventional growers and dealers. The Andersons said this expansion aligns with its strategy to grow in organic and specialty food-grade ingredients.

“We believe the Eastern Cornbelt market is ready for an organic warehouse,” said Jeff Blair, President of The Andersons Plant Nutrient Group. “Our Trade Group works closely with several organic farmers, and we want to be able to support them and others with OMRI-listed plant nutrients.”

According to its website, The Andersons’ organic product offerings include primary nutrients such as Innova 7-1-2 + Amino Acids, Allganic Nitrogen Plus 15-0-2, SmartPhos® DG Natural 0-20-0, and Protassium Plus Sulfate of Potash. The company’s OMRI-listed organic soil amendments include NutraLime OP, NutraSoft OP, Black Gypsum DG, Humic DG, and K-Mate SG, while organic granular micronutrient offerings include Elemental Sulfur, 10 percent and 15 percent Boron, 35.5 percent Zinc Sulfate, 32 percent Manganese Sulfate, and 25 percent Copper Sulfate. Organic enhanced efficiency products include Fulvic LQ and The Andersons Beneficial Microorganisms.

Conventional crop inputs offered at the Waterloo warehouse include dry and liquid fertilizers, custom blends, herbicides, fungicides, insecticides, and enhanced efficiency products such as Avail® and NutriSphere-N®.

“Today, many dealers and farmers struggle to get timely supplies of OMRI-listed nutrients,” Blair said. “Our Waterloo location will resolve this issue for customers throughout the region. We can also eliminate some of the less-than-truckload costs of singular products for them by instead filling trucks with multiple OMRI-listed products. This product expansion will improve availability and reduce costs for dealers and farmers alike.”

Helm to Take Over CGB Fertilizer Activities

Featured, Germany, News, Tampa

Helm Fertilizer Corp., Tampa, a wholly-owned subsidiary of Helm AG, Hamburg, Germany, said on May 16 it has signed an agreement to take over the fertilizer activities of wholesaler CGB Fertilizer. Helm will add additional fertilizer distribution hubs along the Mississippi River and its tributaries from CGB Fertilizer as of May 31, 2019.

Helm said the move underlines its expansion plans within the U.S. and expands the business activities towards the North. Helm said it will be one of the largest fertilizer distributors in the U.S. It said the acquisition will enable it to market a total of 3 million tons of dry and liquid fertilizer into North America through 15 terminals, and significantly increase its market presence from the U.S. Gulf to Canada.

“This acquisition continues to show Helm’s dedication to our growth strategy of methodically expanding our North American fertilizer distribution footprint,” said Helm Fertilizer Managing Director Michael Peyton. “We look forward to expanding our distribution system into a new geography and working with CGB Fertilizer’s employees, suppliers, and customer base.”

Neither Helm nor CGB Fertilizer provided further details. According to its website, CGB has fertilizer terminal locations at Catoosa, Okla., Hartley and Clayton, Iowa, Gladstone and Naples, Ill., Scott City, Mo., Jeffersonville and Aurora, Ind., North Bend and Cincinnati, Ohio, and Grand Rapids and Ypsilanti, Mich. Helm’s website lists its current terminals as Memphis, Tenn., West Helena, Ark., and Alexandria, La.

Founded in 1900, family-owned Helm AG is one of the world’s largest chemical marketing companies and provides access to key markets through more than 100 subsidiaries, sales offices, and participations in over 30 countries. It employs 1,621. In addition to fertilizer and chemicals, it is active in crop protection and pharmaceutical products.

With this CGB acquisition, Helm said it will now distribute around 4.1 million mt of fertilizer in its core markets of Europe, North America, and Latin America.

CGB Fertilizer is a unit of CGB Enterprises Inc., Mandeville, La., a holding company for the diversified businesses that comprise over 2,500 employees and operations in 40 states. The unit was rebranded as CGB Fertilizer in 2011 (GM July 4, 2011); it was formerly Jeffersonville River Terminal (JRT). In addition to the 97 grain facilities CGB operates, the company has dedicated operations in logistics and transportation (CTLC), fertilizer, crop insurance (Diversified Services), agri-finance (AgFi), soybean processing, producer risk management, and other related businesses.

Performance Ag Will Not Join CMN in Alberta; Conditional Acquisition Agreement Terminated

Alberta, Featured, News

Crop Management Network (CMN), Alberta’s largest independent retail crop inputs network, with eight locations, announced in early May that it will not proceed with its previously announced (GM April 5, p. 1) acquisition of Performance Ag Group, a retail operation in Alberta with two locations at Calmar and Evansburg.

“As both parties worked through the usual processes involved in transactions of this nature, it became apparent that the deal for CMN to acquire the assets of Performance Ag Group was not in the best interests of either company,” CMN said. “For this reason the conditional agreement was terminated.”

When the acquisition was first announced in March, CMN said the Performance Ag assets would fit in well with its own Alberta facilities, which are located at Camrose, Daysland, Edberg, Fort Saskatchewan, Holden, Vegreville, Stettler, and Kelsey. CMN also operates an integrated logistics company, Crop Management Logistics Inc. CMN is a joint venture comprised of local employee owners and partnered with Agrico Canada.

Performance Ag has been in business under different names for more than 30 years. The original business was started in 1988 as McDonald Agri Services, but was purchased in 2005 by Harold Ziebel and rebranded as Har-De Agri Services. The business then underwent a second rebrand in 2017 to become Performance Ag Group.

 

BHP Concedes that It “Over-Invested” in Jansen Mine, Remains “an Attractive Option”

Australia, Featured, News, Potash, Saskatchewan

BHP Ltd. said it has “over-invested” in its Jansen potash mine under development in Saskatchewan, but the project remains “an attractive option” for the mining group, given its strategic fit, risk-return metrics, and the longer-term optionality the initial investment would create, CEO Andrew Mackenzie said this week. He was speaking at the Bank of America Merrill Lynch Global Metals, Mining, and Steel Conference in Barcelona.

BHP so far has committed US$2.7 billion to sinking and completing the production and service shafts at Jansen, as well as the installation of essential surface infrastructure and utilities at the site. That work as of mid-April was 83 percent complete (GM April 19, p. 24). However, the group said it would have to invest another US$5.3-$5.7 billion to finish a stage 1 construction of the mine with potential initial capacity of 4.3-4.5 million mt/y of potash, which it said would take less than five years to complete.

Mackenzie said this week BHP can produce potash at Jansen for around US$100/mt FOB Vancouver, excluding royalties. Green Markets assesses current netbacks to Vancouver on India and China supply contracts for standard potash at between US$259-$272/mt.

But BHP remains uncertain about when its board would make a decision to move forward with Jansen beyond the current project scope. Mackenzie told investors and analysts at a company FY first-half 2019 earnings call in February that the group has “no fixed timeline” on Jansen, reiterating that the project, as with all BHP’s other capital projects, ultimately will have to pass all of BHP’s capital allocation framework tests (GM Feb 22, p. 1).

Australian private wealth management group Ord Minnett believes that BHP will make a decision in 6-18 months to go ahead with a first-stage development of Jansen, according to a Bloomberg report, citing a client note by the group. BMO Capital’s Joel Jackson also expects approval by mid-2020, with first production in 2025.

Some market watchers have questioned the relatively modest internal rate of return (IRR) of 14-15 percent that BHP currently expects to be generated by Jansen stage 1, although the anticipated IRR yield will increase to 20 percent for the full sequenced expansion of the mine to up to a further 12 million mt/y of potash.

Others question whether the market can accommodate another 4.5 million mt/y of potash in the next five or six years.

Responding to an analyst’s question on Jansen at the BMO Farm to Market Conference in New York on May 16, Mosaic President and CEO Joc O’Rourke said once EuroChem’s potash operations and K+S’ Bethune mine are fully-ramped, the only residual production available in the next five years is in the hands of the North American producers – themselves and Nutrien.

“Between these two, I believe they can account for the growth over the next five years,” he said. “After that, I can’t tell you. Maybe there will be the need for new production, but, as was being said 10 years ago, existing producers can build brownfield capacity much more cheaply than greenfield.

“It’s hard for me to say why that [BHP’s] product is needed,” he added. “[Moreover,] if I understand BHP’s price projections that they have given to start up a 4.5 million mt/y potash operation, it would probably make those price projections impossible. For me, it wouldn’t be a particularly good economic decision.”

Ahead of a decision on Jansen stage 1, BHP this week said it continues to study the stage 1 development and finish the shafts to optimize returns and de-risk “this multi-generational potash project,” work that continues to go well, it said.

Earlier, it said this includes working with potential offtake customers. The group last November inked non-binding Memoranda of Understanding with China’s Sinochem and CNAMPGC for future potash supply from Jansen (GM Nov. 16, 2018), but BHP has not since provided any update this week on further new contracts with potential customers.

Mackenzie confirmed in February that the group is still considering bringing in a partner and possibly “other expertise” that would allow further risk reduction (GM Feb. 22, p. 1). However, unlike in earlier investor and analyst conference calls, the CEO at the time made no reference to a possible outright sale of the Jansen asset.

 

 

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