All Posts from August 18, 2023

Manitoba Boosts Leases, Provides Loan for Province’s First-Ever Potash Producer

Canada, Featured, News, Potash

Potash and Agri Development Corp. of Manitoba (PADCOM) announced on Aug. 9 that the Government of Manitoba has awarded it Crown Mineral leases, which add more than 100 million mt of potash to the company’s lease and assets. The leases are in the North Block near PADCOM’s current mine near Russell-Bincarth, Man.

The province also announced a $1.03 million loan for a power line to the mine so it can eliminate reliance on diesel. The company said this would make it the lowest carbon emission fertilizer producer in the world. The electricity is generated by Manitoba Hydro.

PADCOM on June 9 officially commissioned the province’s first potash mine (GM June 16, p. 1). The mine will initially produce 50,000-100,000 mt/y using a selective solution mining process, which PADCOM expects will increase to up to 250,000 mt/y or more over an expected life of up to 100 years.

“PADCOM is pleased the Manitoba government has recognized and supported our efforts to develop Manitoba’s potash resource using a low-impact, green sustainable mining technique,” said Daymon Guillas, PADCOM President. “Access to explore more of the potash resource, in partnership with Gambler First Nation, will allow us to evolve from pilot stage to commercial production, including more investment in mining activity and logistics to get Manitoba potash to the world and this will benefit all Manitobans.”

The lease and loan align with Manitoba’s new Critical Minerals Strategy, as the mine both advances the growth of mineral development and is working to provide economic opportunities for First Nations. The strategy announced on July 25 lays out actions to guide the work of government, local communities, and the private sector, and maintains Manitoba’s momentum as a top destination for mineral exploration and production.

The strategy includes several pillars to strengthen resources that raise awareness of Manitoba’s significant critical minerals advantage, including advancing Indigenous partnerships; supporting geoscience research; streamlining regulatory processes; attracting value-added processing and manufacturing; and training a skilled workforce.

The strategy will be followed up with the Manitoba Minerals Action Plan, which will outline concrete and specific actions to achieve Manitoba’s mineral sector potential. It is expected to be released in spring 2024.

Manitoba claims it is home to 29 of the 31 minerals on Canada’s 2021 Critical Minerals List. This includes lithium, graphite, nickel, cobalt, copper, and rare earth elements, which are the six minerals recognized as having the greatest opportunity to spur economic growth and fuel domestic supply chains.

Manitoba said it has seen a substantial increase in mineral exploration over the last three years, with $67.7 million in expenditures in 2020, $99.2 million in 2021, and $170 million in 2022, the highest level of exploration expenditures in the history of the province.

The province ranked 14th for investment attractiveness in the Fraser Institute’s 2022 Survey of Mining Companies, a positive shift from 32nd in 2021, and 37th in 2020. Nearly 50 companies are currently exploring for critical minerals in Manitoba, and the Manitoba government is working to achieve a top 10 ranking in the coming year.

APC Surrenders Western Australia SOP Mining Leases; Shine Wears Off Australia’s Solar SOP Projects

Australia, Featured, News, Sulfate of Potash

ASX-listed Australian Potash Ltd.’s (APC) Lake Wells solar sulfate of potash (SOP) project this week became the latest casualty amid growing negative investment sentiment in the developing Western Australia (WA) potash sector.

The junior SOP producer announced on Aug. 15 that it was surrendering the project’s mining leases after it had not been able to secure further funding. The news came just weeks after another aspiring WA SOP producer, ASX-listed Kalium Lakes Ltd., went into receivership. In addition, Salt Lake Potash earlier bit the dust in its rush to produce SOP, entering administration in October 2021.

APC said in its Aug. 15 ASX statement that it had ceased “an exhaustive funding process” for its Lake Wells SOP project (LSOP), some 500 km northeast of Kalgoorlie, in WA’s northeastern Goldfields, and had taken the decision to surrender the LSOP mining leases, which it said have a high holding cost.

The company put the Lake Wells SOP project on ice in June to preserve its inherent value as it weighed the next steps for the project (GM June 16, p. 29). APC previously reported that it was undertaking a strategic review of the LSOP, which included providing several parties with access to due diligence material to enable potential investments in the development.

In this week’s ASX filing, however, the company said the strategic review process had not resulted in a transaction that was considered suitable for the company or its shareholders. “As such, considering that this process has been adequately exhausted, the directors have made the difficult decision to cease this process,” APC said in the statement.

“There is no doubt that recent company failures in the developing WA potash industry have created a negative perception of solar SOP projects in WA,” the company said. “The directors and management of APC are confident that work done on the LSOP to date demonstrates it to be a high value, well-engineered project.”

The company was targeting a potential production of 150,000 mt/y of SOP at the LSOP (GM May 25, 2021) and had binding offtake agreements in place for 100% of the project’s output. The offtakers included Germany’s Helm AG (GM Nov. 25, 2020), Australia’s Redox Pty Ltd. (GM March 20, 2020), Migao International (Singapore) Pte. Ltd. (GM April 17, 2020), and Mitsui & Co. (GM July 24, p. 28).

By the time the strategic process started more than 12 months ago, APC had completed detailed design and engineering and earlier had secured a A$140 million (approximately $90 million at current exchange rates) debt financing facility from the Northern Australia Infrastructure Facility (NAIF), subject to raising appropriate equity.

According to APC, the SOP project was effectively ready to go into construction once the equity was secured. APC retains its interest in the exploration license tenure it holds for Lake Wells. 

The company’s directors are “extremely disappointed that the demise of local high profile potash projects has largely contributed to the lack of investment support for the sector and the Lake Wells project,” said APC Chairperson Natalia Stretsova. She said the company remains committed to all opportunities to restart the LSOP, “but pragmatically will also pursue the Lake Wells Gold Project, Nexus REE and lithium project, and other opportunities.”

The company said its directors have received consideration of A$950,000 for the components of their Lake Wells camp accommodation units, wet and dry mess and water treatment equipment, and are holding discussions around the sale of bore-field inventory and other site assets. It said the consideration from the sale will be used to fund working capital and the company’s ongoing investigations and exploration on its other projects.

Restructuring firm McGrathNicol took control of Kalium Lakes on Aug. 4 after the aspiring SOP producer failed to find further financial support for its lower-than-expected Beyondie SOP project in WA, located some 160 km southeast of Newman.

Kalium Lakes reported in June that it would need additional long-term funding for the project due to a material increase in operational costs during the ramp-up to achieve targeted production of 90,000-100,000 mt/y of SOP (GM June 16, p. 29).Trading of its shares on the ASX were suspended in June as the troubled company sought “a clear pathway forward for shareholders, lenders, and other stakeholders.”

Like APC, Kalium has secured funding from NAIF to the tune of around A$83 million, as well as A$121.5 million in loans from the German export finance agency KFW IPEX Bank. A NAIF spokesperson cited in an Australian Financial Review report confirmed that Kalium had drawn down more than A$80 million of loans from the agency.

Kalium produced its first batch of SOP at Beyondie in October 2021, making it Australia’s first SOP producer (GM Oct. 8, 2021). Since then it had been producing SOP in small batches, reporting in June that it had achieved its best production to date, producing a combined total of some 2,079 mt of SOP in April and May. Despite last year’s high SOP prices, however, the company remained cash-flow negative.

The receivers said in an Aug. 4 ASX statement that they will continue on a business-as-usual basis at Kalium while an assessment is completed of the options for the sale and/or recapitalization of the company.

Another Australian SOP junior producer that had been jockeying for first-producer status, Salt Lake Potash Ltd., went into administration in October 2021 (GM Oct. 22, 2021). Salt Lake had been targeting production of up to 245,000 mt/y of SOP at its Lake Way potash project in WA.

Salt Lake was subsequently sold to Prague-based Sev.en Global Investments in October last year (GM Oct. 14, 2020) after Sev.en reached a deal with Salt Lake’s receivers and senior creditors on the purchase of its subsidiaries. At the time of the acquisition, Sev.en was targeting to start producing SOP at Lake Way in “around 12 months.” The company’s website could not be accessed this week for updates.

Another WA aspiring SOP producer, BCI Minerals Ltd., reported last summer that its Mardie salt and potash project on the Pilbara coast faced delays amid “significant” cost increases (GM July 15, 2022). The company is targeting production of about 5.35 million mt/y of high-purity salt and roughly 140,000 mt/y of SOP. BCI also at the time said the cost increases may result in asset sales to fund the Mardie project.

Nedlands-based Agrimin Ltd. is taking a slow and steady approach to its Mackay Potash Project in WA. The company was last heard to have secured three offtake agreements, including a binding offtake agreement with US-based Gavilon Fertilizer LLC for the supply of 50,000 mt/y of SOP (GM April. 8, 2022).

The three offtake deals are for a total of 315,000 mt/y of SOP, representing 70% of the Mackay Potash Project’s planned production capacity of 450,000 mt/y.

All of the SOP fertilizer currently used in Australia is imported.

Interior Department Sued Over Peak’s Utah Potash Mining Project

Featured, News, Potash, U.S.

The US Department of the Interior allegedly failed to take a hard look at the environmental risks of potash mining in Utah’s West Desert and explore reasonable alternatives to the project, an environmentalist group said in a lawsuit filed in the US District Court for the District of Utah on Aug. 14, according to Bloomberg Law.

The Southern Utah Wilderness Alliance (SUWA) sued the Bureau of Land Management (BLM) over the agency’s decision to approve a large-scale surface mining project across the Sevier Lake bed. Sevier Lake sits in a largely undisturbed area of the desert and serves as an important stop-over habitat for millions of migratory birds, according to the complaint.

The mining project would allow Salt Lake City-based Peak Minerals Inc. to extract sulfate of potash for approximately 32 years. Peak eventually expects to produce as much as 372,000 st/y, according to the report.

SUWA alleged the BLM shirked its obligations under the National Environmental Policy Act (NEPA) to consider reasonable alternatives to the mining project. Though the BLM’s final impact statement contained five alternatives to the approved plan, SUWA said not one represents the “middle-ground” and instead offer only minor variations to largely the same plan.

The organization also said the BLM didn’t look closely enough at the impact mining could have on Sevier Lake’s water quality where it discharges at Fish Springs National Wildlife Refuge, as required by the NEPA.

SUWA asked the court to set aside BLM’s final impact statement and stop the agency from taking further action on the project until they comply with NEPA requirements. The BLM, which typically doesn’t comment on pending litigation, didn’t immediately respond to a request for comment on the allegations.

In March, Peak entered into a convertible loan agreement with a global strategic investor to invest $30 million in the continued development of the project (GM April 14, p. 1). The proceeds are to be used to fund front-end engineering and design (FEED), complete final permitting activities, prepare the site in advance of construction, refinance the company’s existing senior debt obligations, and for general corporate purposes.

As part of the loan agreement, Peak and the investor have also entered into a binding term sheet for the long-term supply of 65,000 st/y of SOP from Phase 1 of the project, which is targeting total initial SOP production of 215,000 st/y.

Peak is a wholly owned subsidiary of EMR Capital Resources Fund 1 LP, a natural resources focused investment fund managed by EMR Capital, a specialist resources private equity manager.

Peak, formerly known as Crystal Peak Minerals Inc., has been pursuing the Utah project since at least 2016 (GM July 1, 2016). In 2020, citing its lack of success in raising funds to proceed with the project, EMR, its largest shareholder, foreclosed and the company restructured. EMR said the process left the Sevier Playa project intact with its mineral leases unaffected (GM Oct. 23, 2020) and that it planned to continue to develop the project under private ownership.

OCP to Build Four New Plants for Purified PhosAcid and Technical MAP

DAP/MAP, Featured, Lithium, Morocco, News, Phosphoric Acid

Morocco’s OCP Group SA plans to build four new plants to be completed by 2028 for the production of purified phosphoric acid (PPA) and technical MAP. OCP said the start of construction of the first PPA/technical MAP units is scheduled for the first half of 2024.

The new production facilities will be built within the group’s existing industrial platforms, with the first PPA and the technical MAP units targeting an equivalent annual production capacity of 120,000-150,00 mt/y P2O5, OCP said in an Aug. 17 media statement.

OCP said it is being assisted by JESA, the ongoing joint venture between the Moroccan phosphate group and Australian firm Worley, which it described as the African leader in design, engineering, and project delivery services.

“The project is part of OCP’s strategy to meet the growing demand for use of PPA and technical MAP as captive inputs in other products such as lithium iron phosphate (LFP) batteries and phosphate salts, as well as the growing needs of horticulture and water-stressed agriculture markets around the world,” the company said.

OCP added that the new capacities will also allow it to use the PPA and/or technical MAP produced in the new plants to manufacture other high-value niche products, “thus expanding OCP’s existing specialty phosphate business.”

Phospholutions Reports $10.15 Million Investment; Keytrade Joins as New Investor

Brazil, China, Featured, India, News, Phosphate, Turkey, U.S.

Phospholutions Inc., a sustainable fertilizer technology provider based in State College, Pa., has announced an additional $10.15 million investment from leading global fertilizer companies and investors to accelerate the commercialization of RhizoSorb® in the US row crop market.

The financing was led by Advantage Capital and includes continued investment from Conti Ventures (a division of Continental Grain Co.), Tekfen Ventures, Maumee Ventures, and Ben Franklin Technology Partners. Keytrade, a global fertilizer trader, also joins as a new investor.

“We are pleased to welcome new investors like Advantage and Keytrade supporting our efforts to accelerate commercialization of our phosphate efficiency technology,” said Jason Burke, Vice President of Finance for Phospholutions. “Additionally, the continued support from our existing investors really fortifies what we are doing to bring new sustainable fertilizers to the US farmer.”

“We are thrilled to engage in the advancement of the fertilizer industry and to invest in a company dedicated to shaping the future of phosphorus,” said Melih Keyman, Keytrade President and CEO. “This pioneering solution offers producers an opportunity to embrace sustainable technology and enhance conventional fertilizer production while also extending the value to the farmer, creating a more environmentally friendly and economically viable approach.”

Phospholutions said ‍RhizoSorb® is the only patented technology incorporated upstream into the production process for conventional phosphates that reliably reduces phosphorus applications by up to 50%, maintaining yield and improving retail margins while providing a cost savings benefit to the farmer.

The company said RhizoSorb® is proven to deliver the same amount of phosphorus to the plant with half the amount of applied fertilizer. RhizoSorb® 8-39-0 was launched in the US row crop market this past spring, and Phospholutions has added three new Regional Managers and a Director of Agronomy to support sales to ag retailers in North America.

Phospholutions said RhizoSorb has been proven to benefit farmers in five countries outside the US, including India, New Zealand, and Turkey, and it will be expanding field trials into China, Brazil, and Canada during the 2024 growing season.

The company said the technology has been proven to reduce the environmental impact of phosphate fertilizer by reducing runoff potential by 58%, leaching by 87%, and greenhouse gas emissions associated with conventional use of traditional MAP sources by more than half. It said phosphate manufacturers also see a reduction in production costs and an increase in margin that outweighs the reduction in applied volume per acre compared to conventional phosphate sources.

Phospholutions was recently awarded first place in the International Fertilizer Association’s African Agtech Startup Showcase, hosted in partnership with Mohammed VI Polytechnic University (UM6P). The competition was aimed at agtech startups working on innovative solutions that can be adapted to the African context to ensure the sustainability and inclusivity of its agriculture.

SQM 2Q Income Off on Lower Lithium Prices

China, Earnings, Lithium, News, Potassium Sulfate

SQM Inc. reported second-quarter net income of $580.2 million, down 32% from the year-ago $859.3 million, while revenues decreased 21%, to $2.05 billion from the year-ago $2.6 billion.

“Our second-quarter 2023 results were lower when compared to the same period last year primarily due to the lower realized average sales prices in the lithium business,” said CEO Ricardo Ramos. “While lithium sales volumes showed a significant recovery during this quarter, reaching historical high levels, lower spot prices especially in China in the beginning of the second quarter had a negative impact on reported sales and net income. We continue to see positive dynamic in (the) lithium market supported by strong EV sales volumes in different markets and expect the global lithium demand growth to reach at least 20% this year.”

SQM said second-quarter lithium sales volumes surpassed 43,000 mt, more than 26% higher than the year-ago quarter and 33% higher than the first quarter. Realized average sales prices, however, decreased almost 37% year-over-year and close to 33% compared to the first quarter.

Specialty Plant Nutrition (SPN) saw a second-quarter drop in both volumes and prices, though the company saw some demand recovery compared to the first quarter. However, due to lower first-quarter demand and some reduced agricultural activity as a result of the impact of climate conditions in various markets, SQM expects annual SPN demand growth to be flat-to-negative in 2023.

Second-quarter SPN volumes were off 4%, to 221,700 mt from the year-ago 230,100 mt, while revenues fell 25%, to $247.5 million from $330.3 million. Potassium nitrate-based volumes were off 11%, while Specialty Blends saw a volume increase of 8%.

Second-quarter sales volumes and prices were down for Potassium Chloride and Potassium Sulfate (MOP/SOP). Average sales prices were off 48% year-over-year and almost 16% when compared to the first quarter. However, SQM believes the price decrease could have a positive impact on global potash market demand, resulting in a growth of approximately 10% this year compared to 2022. It expects potassium sales volumes could surpass 500,000 mt in 2023.

Second-quarter MOP/SOP volumes dropped 30%, to 124,300 mt from the year-ago 177,600 mt, while revenues fell 64%, to $66.2 million from $182.4 million.

Company-wide, SQM reported six-month net income of $1.33 billion, down 20% from the year-ago $1.66 billion. Six-month revenues were off 7%, to $4.32 billion from $4.62 billion.

Six-month SPN volumes were down 12%, to 389,800 mt from the year-ago 440,800 mt, while revenues dropped 23%, to $468.4 million from $605.6 million. Potassium nitrate-based products saw the biggest drop at 19%, while Specialty Blends were down 6%.

Six-month MOP/SOP volumes were off 18%, to 262,800 mt from the year-ago 319,300 mt, while revenues were off 48%, to $153.1 million from $296.5 million.

Lower Prices, Higher Costs Hit Ma’aden 2Q/IH

Earnings, News, Phosphate, Saudi Arabia

Riyadh-based Saudi Arabian Mining Co. (Ma’aden) reported a 91% drop in net profit after Zakat and tax for the second quarter, to SAR350.9 million (approximately $93.5 million at current exchange rates) from SAR4.03 billion the previous year. Revenue declined 41%, to SAR6.97 billion from SAR11.88 billion.

Ma’aden cited lower selling prices versus a record year in FY2022, and higher costs, which were partially offset by higher sales volumes for aluminum, flat rolled products, and all products except ammonia.

The company said the second quarter was a “record” for phosphate production as it pursues production growth. However, it did not provide any volume data.

For the half-year, Ma’aden posted an 88% drop in net profit after Zakat and tax, to SAR770.4 million on revenue of SAR15.01 billion, down from last year’s SAR6.2 billion and SAR20.79 billion, respectively. Revenue declined 28% year-over-year. Six-month profit per share was SAR0.21 versus the year-ago SAR1.68.

Ma’aden said its financial position has further strengthened with reductions in long-term borrowings and net debt as of June 30, 2023, down by 11% and 9%, respectively, from December 2022, including the early debt repayment of SAR3 billion by Ma’aden Wa’ad Al Shamal Phosphate Company (MWSPC).

Early this month, Manara Minerals, a joint venture between Ma’aden and Saudi Arabia’s Public Investment Fund (PIF), inked a binding agreement to acquire a 10% stake in Brazilian group Vale SA’s base metals unit, Base Metals Ltd. (GM Aug. 4, p. 35). The Vale base metals unit produces nickel and copper. The transaction is based on an enterprise value of $26 billion, according to Ma’aden.

Manitoba Funds Study of New Trade Corridor

Canada, Natural Gas, News, News Briefs, Potash

The Manitoba government on Aug. 3 said it is providing $6.7 million over the next two years to study the feasibility of the Indigenous-led NeeStaNan Utility Corridor project. The study will assess the viability and level of investment required to establish a trade corridor from Fort McMurray, Alta., to the Hudson Bay Coast of Manitoba, where products could continue through the Arctic.

The total cost of the feasibility study is $26.6 million, with the Manitoba government providing $6.7 million over two years, contingent on funding participation from the governments of Alberta and Saskatchewan, as well as First Nations communities. The three provinces signed a Memorandum of Understanding (MOU) in April to advance economic corridors and support the movement of products within Western Canada and to various markets.

“This vision of this project is to create an Indigenous-owned corridor connecting Manitoba with other Prairie provinces and support economic development in northern Manitoba,” said Manitoba Transportation and Infrastructure Minister Doyle Piwniuk. “Strategic transportation investments are a priority to develop and grow Manitoba’s trade capability and trade market access.”

NeeStaNan would be 100% Indigenous-owned and governed by a Board of Directors. The plan would build a second deepwater port on Hudson Bay near a long-abandoned settlement near the mouth of the Nelson River, according to the Winnipeg Free Press.

The federal government began construction of the infrastructure for Port Nelson over a century ago, but halted construction due to labor and material shortages during World War I. A later evaluation instead chose the deepwater option of the Port of Churchill, hundreds of kilometers to the northwest, which was completed in 1931.

Piwniuk told CBC News that the new project would relegate the Port of Churchill to a regional supply hub rather than as an international port.

NeeStaNan backers say key commodities such as potash, natural gas, wheat, bitumen, and other critical minerals are landlocked in Western Canada, and transported via rail or pipeline through the Rocky Mountains to the West Coast to reach international markets. If built, the NeeStaNan project would reduce shipping distances by 3,500-5,500 kilometers from existing transportation routes to Europe, the US Gulf Coast, and South America, while delivering economic, environmental, and social benefits to First Nation communities.

Consideration of the corridor would explore the potential for bulk cargo shipments via rail and pipeline development to support the future export of liquefied natural gas, interprovincial high-voltage direct current power lines, and communication lines, as well as the expanded port facilities required for the enhanced shipment of mineral and agricultural commodities.

Dawson Celebrates Fertilizer Facility Upgrade

News, News Briefs

A grand opening ceremony was held on Aug. 15 by Dawson Co-operative Union, Dawson Creek, B.C., to celebrate the completion and operation of the new fertilizer shed and distribution facility at the Rolla Ag site.

The new state-of-the-art upgraded fertilizer plant has a storage capacity of 6,000 mt and can blend product at speeds of up to 280 mt/h, almost five times faster than the previous bin system plant that was acquired in 2017.  

“We are very proud and excited to see the full potential of these facility upgrades as they will continue to contribute to the long-term economic success of our local farmers by providing enhanced efficiencies and services in the delivery of our full offering of fertilizer and crop inputs,” said Rod Hillary, Dawson CEO.

Founded in 1921, the co-op has British Columbia locations in Dawson Creek, Rolla, Tumbler Ridge, and Chetwynd.

Mosaic Unveils Plant Health Platform

News, News Briefs

The Mosaic Co. on Aug. 15 announced the formation of the Mosaic Bioscience™ platform, which it says will bring the latest plant health science and innovation to the agricultural market. It said the technologies will enhance crop health and support the natural biology in plants and soil, ultimately enhancing yield.

“Mosaic Biosciences is a natural extension of our strong crop nutrition portfolio,” said Floris Bielders, Mosaic Vice President, Strategy and New Business Platforms. “Rooted in science and proven in the field, our portfolio of biological technologies supports the existing biology in plants and soil to deliver healthier, stronger crops.”

The portfolio includes biological fertilizer complements PowerCoat® and BioPath®, which improve nutrient use efficiency and enhance plant growth. Mosaic said a global team of scientists is building a pipeline of new biologic products to drive improvements in plant health, stress management, nutrient uptake, and crop yield.

“Our portfolio of nutrient use enhancement technologies is just the start for Mosaic BioSciences,” Bielders said. “In the coming months and years, we expect to bring additional biological products to the market, all of which will be backed by science and in-field experience. Biologicals are crucial in the evolution of crop nutrition and will elevate the potential in every field.”

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