All Posts from June 19, 2020

India’s Ramagundam Urea Plant Expected Up in September, Three More in May 2021

Featured, India, News, Urea

India is moving ahead its goal of being self-sufficient in urea with the revival of five idled urea plants, with the Ramagundam Fertilizers and Chemicals Ltd. plant expected to be producing urea by the end of September 2020, according to a review of the plants recently held by Union Minister of State for Chemicals and Fertilizers Shri Mansukh Mandaviya, as reported by the Press Information Bureau of India (PIB-India).

Mandaviya was told the plant has already achieved 99.53 percent of its physical progress, though there has been some delay in completing a small component of the work due to COVID-19. A commission date of December 2019 was given for this plant in June 2019 (GM June 21, 2019).

“India’s import volumes are largest after the summer monsoon season in the third quarter, when this plant is expected to come online,” said Alexis Maxwell, Green Markets Director of Research. “This plant’s commissioning will mark the start of India’s ambitious plan to revitalize its nitrogen production. The additional tons will reduce India’s annual urea imports by 40-50 percent, and global urea pricing will become less transparent in the absence of India’s import tenders.”

Each of the five urea plants is expected to have a capacity of 1.27 million mt/y, with a total capacity of 6.35 million mt/y.

Three other plants at Gorakhpur, Barauni, and Sindri are expected to be complete by the end of May 2021. Their physical progress was put at 77 percent, 70 percent, and 69 percent, respectively. The Gorakpur commission date was pushed back from February 2021 and now coincides the previously reported dates for Barauni and Sindri.

The fifth project – Talcher Fertilizer Ltd. – is still in pre-project activities. The last given commission date for this plant is September 2023.

Mandaviya was told all the projects are being vigorously pursued despite the challenges of COVID-19, which are causing some delays.

Albemarle Shuts Down Potash Plant, Cites COVID-19

Chile, News, News Briefs, Potash, Southeast

Albemarle Corp., Charlotte, N.C., began a 15-day shutdown of a potash plant at its Salar de Atacama facility in northern Chile on June 17, in a decision that is not expected to impact lithium output, according to Bloomberg. The company said the decision comes after reviewing recommendations by local health authorities and with the welfare of employees in mind.

“Thanks to the strict prevention measures we have taken since the beginning of this global pandemic, we have not impacted our production or had to stop our lithium production operations,” the company said. The temporary closure reduces site personnel by 10 percent, or 24 people.

Albemarle said it produces lithium carbonate, lithium chloride, potassium chloride, and magnesium chloride at the site. The company had not responded to inquiries at press time as to the amount of production that would be impacted.

Albemarle on June 12 confirmed eight cases of COVID-19 among the Salar mine workforce. At the time, a Salar union accused the company of failing to implement the necessary protocols and said infection rates may accelerate. “The situation is getting more concerning,” said Domingo Cruz, President of Albemarle Salar’s worker’s union. “We have made different recommendations to the company, but we have not been heard.”

Albemarle said it is strictly following all health authority protocols. “Our prevention measures are in line with all health authority recommendations, allowing us to have traceability of cases in the midst of a global pandemic.”

It said it continues to follow protocols such as temperature checks, health screenings, and the use of face coverings.

Albemarle said it is staying in close contact with ill team members to monitor their condition, as well as maintaining communication with unions and the Council of Atacama Peoples.

BHP Ltd. – Management Brief

Australia, Management Briefs

BHP Ltd., Melbourne, CEO Mike Henry on June 17 announced the appointment of David Lamont as CFO, effective Dec. 1, 2020. He will also join BHP’s Executive Leadership Team.

Lamonthas been the CFO of the ASX-listed global biotech company CSL Ltd. since January 2016. Prior to joining CSL, he was the CFO and an Executive Director at Melbourne-headquartered mining company MMG from 2010. He previously served as CFO for several other multinational public companies across a range of industries, including OZ Minerals Ltd., PaperlinX Ltd., and Incitec Pivot Ltd.

He also held senior roles at BHP between 2001-2006, including CFO of the company’s Carbon Steel Materials and Energy Coal businesses. He began his career as an accountant at Deloitte.

Peter Beaven will continue as BHP’s CFO until Nov. 30, 2020, to provide ongoing leadership through to Lamont’s commencement, and will support him with handover into early 2021, after which he will leave BHP to pursue personal ambitions.

Cargill to Break Ground on $30 M Fertilizer Retail and Distribution Center

Alberta, Featured, News

Cargill Inc., Minneapolis, said on June 16 that this month it will begin construction of a new state-of-the-art US$30 million fertilizer retail and distribution center adjacent to its canola crush plant in Camrose, Alta. The facility is scheduled to open in August 2021.

The facility’s location was designed to bring efficiency to customers who haul canola to the existing Camrose crush plant, saving both time and fuel when they return from the crush plant with a load of fertilizer. Local authorities also noted that the backfill situation will decrease truck traffic.

“This new retail and distribution center will enable us to better meet Alberta farmers’ crop nutrition needs while also connecting them to the benefits of the canola crush plant and our network of crop inputs retails and grain elevators, where they can access a range of grain risk management solutions and grain marketing advisory service,” said Allan Facchinutti, Alberta Commercial Leader for Cargill’s agricultural supply chain business.

Cargill said the cutting edge facility will have a number of industry-leading features, including 35,000 mt of storage capacity, with space for both bulk product and value-added fertilizer such as MicroEssentials products; the fastest load times in the market for blended or straight fertilizer; and the first retail site in Western Canada to offer four-product liquid coating capabilities for micronutrients like YaraVita Procote and nutrient stabilizer coatings.

Cargill said farmers will also see faster product availability – particularly in Vermilion, Vegreville, Leduc, and Beiseker – due to improved fertilizer flows within the rest of Cargill’s crop inputs network.

Cargill said the center marks more than $300 million invested by the company in capital projects in the province over the past five years. In total, Cargill said it has 40 retail outlets across Western Canada.

The new Camrose facility was initially issued a permit by Camrose County, later approved by the Municipal Planning Commission, which cited its ideal location next to an internal roadway, directly adjacent to existing railway operations and directly north of Cargill’s crush plant.

However, this decision was appealed by the City of Camrose and a neighboring landowner to the Subdivision and Development Appeal Board (SDAB). In February 2019, the SDAB denied the appeal and issued a development permit, on the condition that Cargill include fencing of the area and add a berm on the east side of the property to minimize noise to nearby residences. The company also was required to contribute to the City of Camrose for offsite utility servicing.

EuroChem’s Ust-Luga Terminal Moves Forward

Europe, News, News Briefs, Russia

EuroChem AG’s, Zug, Switzerland, planned fertilizer transhipment terminal project in the Russian Baltic Sea port of Ust-Luga has secured approval for the design and estimates by the St. Petersburg branch of Russia’s Main State Expert Appraisal Department, according to Russia’s AK&M Information Agency, citing a department statement.

EuroChem revealed in June last year it had decided to go ahead with the building of the transhipment terminal in Ust-Luga, a project halted in 2017 (GM June 14, 2019). At the time, the fertilizer group anticipated a 2022-23 launch of the new terminal.

The terminal will be located in the northwestern part of the Ust-Luga commercial seaport and is to be developed in three phases, according to the report. It is reportedly planned to have handling capacity of 6.025 million mt/y on completion of all the three stages, and targeted throughput is put at 5.55 million mt/y. EuroChem told Green Markets that the group is not making any comment on developments at Ust-Luga at the present time.

Saudi Aramco Completes $69.1 B SABIC Acquisition; Payment Plan Extended

Featured, News, Saudi Arabia

Saudi Basic Industries Corp. (SABIC), Riyadh, announced the completion on June 16 of Saudi Aramco’s acquisition of the Public Investment Fund of Saudi Arabia’s (PIF) stake in SABIC, according to a company statement on the Saudi stock exchange, Tadawul. Saudi Aramco, the world’s largest oil company, now owns a 70 percent stake in the Saudi petrochemicals company.

Saudi Aramco signed a share purchase agreement with PIF in March last year to acquire its 70 percent majority stake in SABIC (GM March 29, 2019). The proposed deal was seen as the Middle East’s largest-ever.

SABIC said in this week’s statement the transaction will be “a key pillar for SABIC to continue as the leader of the petrochemicals industry in Saudi Arabia, and reinforce its strategy to become a world leader in chemicals.”

It said it will continue to be a listed company on the Saudi Stock Exchange and highlighted that the remaining 30 percent of its publicly traded shares are not part of the transaction with Saudi Aramco.

In a separate stock exchange statement, Saudi Aramco said the acquisition of the SABIC stake is consistent with Saudi Aramco’s long-term downstream strategy to grow its integrated refining and petrochemicals capacity and create value from integration across the hydrocarbon chain. It said it expects SABIC to benefit from the integration with Saudi Aramco’s Upstream and Downstream refining and chemicals businesses and the ability to invest in and execute major growth projects.

In the fertilizer sector, SABIC owns a 30 percent share in Ma’aden Phosphate Co. (MPC), and a 15 percent interest in Ma’aden Wa’ad Al-Shamal Phosphate Co. (MWSPC). It also owns a 50.1 percent stake in Saudi Arabian Fertilizer Co. Ltd. (SAFCO), Riyadh. SAFCO earlier this year acquired from SABIC its 100 percent-owned subsidiary SABIC Agri-Nutrients Investment Co. Ltd. (SANIC) (GM April 10, p. 31).

SANIC owns SABIC’s 50 percent stakes in National Chemical Fertilizer Co. (Ibn Al-Baytar) and in Al-Jubail Fertilizer Co. (Al Bayroni), and its 33.33 percent holding in Bahrain-based nitrogen fertilizer producer Gulf Petrochemicals Industries Co. (GPIC).

Saudi Aramco confirmed the transaction price for the SABIC stake was SAR259.125 billion ($69.1 billion), equating to SAR123.39 per share, which is in line with the price tag agreed in the original share purchase agreement with PIF.

The state oil behemoth in its statement this week said it and PIF on June 16 entered into an addendum to their March 27, 2019, share purchase agreement. Under the addendum, the purchase price will be paid for in several installments, pursuant to a seller loan provided by PIF. The loan payments, which are represented by promissory notes issued to PIF at transaction closing, are payable between Aug. 2, 2020 (on which the first payment will be made) and April 7, 2028 (the date of the last payment).

Saudi Aramco last month was reported to be looking to restructure the SABIC deal, and was said to be in early talks about further staggering payments for the acquisition, as its finances come under pressure from the collapse in oil prices (GM May 15, p. 34). The state oil company was also reported to be considering whether it was possible to reduce the agreed upon $69.1 billion price tag on the transaction.

“Global economic institutions considered the completion of the deal at this time as a determination of Saudi Arabia to implement its economic program with wisdom and competence, despite any difficulties or challenges left by the negative economic implications,” Saudi Press Agency reported on June 16, citing an Al-Riyadh newspaper editorial.

Salt Lake Potash Awards Key Contracts

Australia, News, News Briefs, Specialty, Sulfate of Potash

Junior sulfate of potash (SOP) producer Salt Lake Potash Ltd. (SO4), Perth, Western Australia, has awarded key construction contracts for its Lake Way SOP project in the northern Goldfields region of Western Australia.

Perth-based GR Engineering Services Ltd. will build both the process plant and non-process infrastructure at Lake Way. The first contract, covering engineering, procurement, and construction (EPC) at Lake Way, is valued at A$85 million (approximately US$58.8 million at current exchange rates). It covers plant, labor, materials, and construction services for the process plant.

The second contract, which is worth A$22 million, will involve the provision of services for the engineering, procurement, and construction management (EPCM) for both Lake Way’s process plant and other infrastructure.

The process plant has been designed by both GR Engineering and Aberdeen, U.K.-headquartered Wood plc. The plant is a simple reverse flotation, conversion, and re-crystallization process utilizing well-established technology.

“The finalization of these major project contracts and the substantial engineering and procurement activity to date has further de-risked the Lake Way project execution and confidence around the capital budget,” said SO4 CEO Tony Swiericzuk.

Lake Way’s capital budget is now put at A$264 million, a A$10 million increase on the published Bankable Feasibility Study figure in October 2019. The revised A$264 million budget includes an A$18 million contingency allowance, SO4 said.

Bulk earthworks have been completed at Lake Way, with the project remaining on target for sales in the first quarter of 2021.

Lake Way is forecast to produce 245,000 mt of SOP per annum and has a 20-year mine life. SO4 said it initially plans to produce two products: high potassium low-chloride standard powder SOP (grading >53 percent K2O) and fertigation grade high potassium low-chloride water soluble product, used in micro-irrigation.

Offtake commitments have been secured for over 90 percent of planned output for five and ten-year terms, including with Helm (GM Dec. 20, 2019) as well as with Unifert, Indagro, and Fertisur (GM Nov. 22, 2019).

Kalium Lakes Commissions Salt Harvester

Australia, News, News Briefs, Specialty, Sulfate of Potash

Sulfate of potash (SOP) junior Kalium Lakes Ltd., Balcatta, Western Australia, this week reported the successful onsite commissioning of the recently delivered salt harvester at its Beyondie SOP project, located 160 km southeast of Newman, in Western Australia.

The company announced the selection of the German-manufactured Wirtgen Harvester for the Beyondie project in November last year (GM Nov. 1, 2019). The Wirtgen 220 can produce up to 600 mt/h of harvested salts.

“As we approached the milestone of 30,000 mt of SOP brine pumped into our evaporation ponds, it was a timely opportunity to commission the harvester onsite and confirm the operational assumptions,” said Kalium Managing Director Brett Hazelden.

The company last month reported first SOP production at Beyondie had been pushed back from the previous target of December 2020 and now was anticipated in the third quarter of 2021 (GM May 22, p. 1).

Australian Potash Advances Environmental Approvals for Lake Wells SOP Project

Australia, News, News Briefs, Specialty, Sulfate of Potash

Subiaco, Western Australia-based sulfate of potash (SOP) junior Australian Potash Ltd. (APC) this week reported its Environmental Review Document (ERD) for its Lake Wells sulfate of potash (SOP) project, located some 500 km northeast of Kalgoorlie, in Western Australia’s northeastern Goldfields, has been accepted for final assessment by Western Australia’s Environmental Protection Authority (EPA).

Ministerial consent is required for all of the SOP projects being proposed or developed in Western Australia, with the minister taking into consideration the advice given by the EPA in its report, APC said.

 Following the EPA acceptance of the ERD for Lake Wells, the agency has provided a target timeframe for the progression of the assessment, with the Ministerial Statement of Consent anticipated in September this year.

“Importantly for the company, there is now a timetable for the balance of the assessment process, which targets Ministerial Consent to proceed with the development in Q3 2020,” said APC Managing Director and CEO Matt Shackleton.

The SOP developer is targeting an initial output of 150,000 mt/y of SOP from Lake Wells, and already has total offtake agreements secured for 70,000 mt/y (GM April 17, p. 29).

Grodno Azot Nitrogen Plant May Break Ground in 2020

Ammonia, Belarus, News, News Briefs, Nitrogen, Urea

Belarus nitrogen fertilizer producer Grodno Azot may begin construction of its new nitrogen fertilizer production complex this year, or, if not, “definitely next year,” according to a BelTA report, citing the country’s President Aleksandr Lukashenko, on a visit to the company on June 16.

The Belarus producer is reported to have selected Italy’s Tecnimont SpA as the successful bidder for the general contractor/EPC for the new nitrogen fertilizer project, although this could not be confirmed by press time. Negotiations between the two parties have been ongoing; Grodno Azot was reported to have selected Tecnimont as the successful bidder from among bids submitted from a total of five companies, according to a BelTA report this past February (GM May 29, p. 30).

According to Grodno Azot’s website, the new complex will be built with capacity for 875,000 mt/y of ammonia and 1,225,000 mt/y of granular urea. Commissioning is targeted for fourth-quarter 2025. Output from the new plant will allow Belarus to “fully meet” domestic demand for urea, as well as provide for export sales, the company said. It sees domestic urea consumption reaching about 800,000 mt/y by 2025.

Last month, the State Oil Co. of the Azerbaijan Republic (SOCAR) was reported to have expressed interest in Grodno Azot’s new nitrogen fertilizer project, according to a report by Baku, Azerbaijan-based Trend News Agency, citing SOCAR’s Deputy Head of the Public Relations and Events Department Ibrahim Ahmadov. But no further details were provided or have emerged on what form of potential participation the Azerbaijan company was considering.

Alongside building the new nitrogen fertilizer complex, Grodno Azot plans to simultaneously carry out work to modernize its existing facilities that produce ammonia and urea. The expected capex for the modernization work is put at $250 million over the period 2020-2024, according to this week’s BelTA report.

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