All Posts from March 25, 2013

Mosaic agrees to major phosphate greenfield project in Saudi Arabia

Featured, News

The Mosaic Co. announced March 19 that it has entered into a Heads of Agreement with Ma’aden and the Saudi Basic Industries Corp. (Sabic) under which the companies intend to enter a joint venture to develop integrated phosphate production facilities in the Kingdom of Saudi Arabia. The parties contemplate that Ma’aden, Mosaic, and Sabic would own 60, 25, and 15 percent of the jv, respectively. A definitive shareholders agreement is expected in the first half of 2013.

The approximately $7 billion greenfield project, to be known as Wa’ad Al Shammal Phosphate Project, would be built in the northern region of Saudi Arabia at Wa’ad Al Shammal Minerals Industrial City, and would include further expansion of processing plants in Ras Al Khair Minerals Industrial City, which is located on the east coast of Saudi Arabia. The jv would develop a mine and chemical complexes that would produce phosphate fertilizers, animal feed, food-grade purified phosphoric acid, and sodium tripolyphosphate for sale to customers worldwide. The facilities are expected to have a production capacity of approximately 3.5 million mt of finished product per year. Operations are expected to commence in late 2016.

Mosaic would contribute expertise to the design, construction, and operations of the new facilities, and acquire a 25 percent ownership stake. In connection with its equity share, Mosaic would market approximately 25 percent of the production of the jv. Subject to final financing terms, Mosaic’s cash investment would be up to $1 billion, funded over a four-year period beginning in 2013.

"Our joint venture with Ma’aden holds great promise for Mosaic, and we expect it to be an excellent complement to our phosphate business in Florida and Louisiana," said Mosaic President and CEO Jim Prokopanko. "This cost-effective phosphate project would enable Mosaic to further diversify our sources of phosphates and gives us improved access to key agricultural countries. Our growing global reach further enables us to fulfill Mosaic’s mission, to help the world grow the food it needs, while delivering compelling shareholder value."

The project offers Mosaic lucrative logistics, as it will enable it to better ship phosphates to important locations, such as India. Likewise, the project benefits from the local availability of key raw materials within Saudi Arabia.

Some in the industry last week speculated that this new relationship with Sabic could have an impact on Mosaic’s decision whether or not to add 1 million mt of anhydrous ammonia capacity at Faustina, La. A final decision on that is expected this summer. Mosaic could conceivably take ammonia from Sabic rather than building the new plant.

However, Mosaic dismissed this speculation, telling Green Markets that the two deals are not connected. “This deal does not have an impact on our existing capital investments, including our potential investment in the ammonia plant,” said a company spokesman.

No action on fertilizer prices at NFU conference

News, News Briefs

Boston — The question of whether fertilizer prices are too high and should be investigated (GM March 4, p. 14) never made it to the floor for full discussion at the National Farmers Union (NFU) convention in Boston March 2-5, even though rumbles from several member organizations, including the Rocky Mountain Farmers Union, indicated beforehand that the topic was almost a sure thing. “I think we’ve done about all we can on this issue,” said Mick McAllister with the Rocky Mountain Farmers Union, where the fertilizer price issue arose several weeks ago. “We’ll have to wait and see if the Justice Department chooses to do anything. People defending the high price of fertilizer relative to ammonia say the price is demand-driven, and if it’s high, farmers will just have to pay more for fertilizer. But I hope people understand that means we all are going to pay more for food.” Chandler Goule, NFU vice president of government relations, insisted the fertilizer price question hasn’t been put to rest. “Many of the farmers’ union state presidents have adopted policies on the state level to look into this egregious problem,” Goule said. “It was anticipated by some that a resolution would be brought up on the floor asking for an investigation, but it was not. However, NFU and the states will stay engaged as this continues to unfold and natural gas prices remain low, and there is no change in fertilizer heading into the planting season.”

K+S Aktiengesellschaft – Management Brief

Management Briefs

K+S Aktiengesellschaft is adding two new members to its supervisory board – Dr. Annette Messemer and Wesley Clark. The move is part of the company’s goal of having two female members and increasing its international representation.

Messemer is a divisional board member for Corporates & Markets of Commerzbank AG. Clark is a former CEO of the K+S subsidiary Morton Salt, one of the largest salt producers in North America. Clark, a U.S. citizen, is also an operating partner of the Advent International Global Private Equity Group, and has many years of experience in the salt business. With a long career in business, Clark is not to be confused with General Wesley Clark, who has run for president and has served on the boards of CVR Energy Inc. and Rentech Inc.

Members continuing on the board include Jella S. Benner-Heinacher, Dr. Eckart Sünner, Dr. Rudolf Müller, and Dr. Bernd Malmström. Rainer Grohe and Dr. Karl Heidenreich are retiring from the board. An election of an employee representative to the board will take place in April.

S.D. governor vetoes fertilizer fee increase

News, News Briefs

Pierre — South Dakota Governor Dennis Daugaard (R) has vetoed SB115, which would have increased the commercial fertilizer inspection fee for the purposes of fertilizer-related research and to create the Nutrient Research Education Council to promote such research. The bill would have doubled the current $0.15 per ton fee to raise money for the Agricultural Experiment Station. The governor maintained that is was not a fee increase, but a tax. He says the station is already receiving an ongoing increase of more than 10 percent and an increase of eight new full-time employees. Proponents of the increase are reportedly hoping to override the veto.

BioNitrogen eyes Alberta plant site

News, News Briefs

Doral, Fla. — BioNitrogen Corp., which plans to construct plants that can turn biomass into urea, is now eyeing a site in Alberta for a plant. The company reports that it has signed an agreement with Battle River Agri-Ventures in Killam, Alberta, to conduct a feasibility study for one or more plants using BioNitrogen’s patented technology.

TFI applauds Florida/EPA water quality agreement

News, News Briefs

Washington — The Fertilizer Institute (TFI) on March 19 announced that the U.S. Environmental Protection Agency and the Florida Department of Environmental Protection (FDEP) have reached an agreement that will allow FDEP to implement numeric nutrient criteria (NNC) for Florida’s water. TFI applauded the agreement, saying that allowing the state to set its own water quality standards is a win for Florida’s environment and business community. “This agreement represents a tremendous victory for the fertilizer industry as it will allow EPA to withdraw the federal NNC for Florida, which could have cost the state’s agricultural community more than $1 billion annually,” TFI said. TFI said the agreement is precedent setting in that it confirms that states, not the federal government, are best equipped to protect their own waters. It also leaves in place an earlier U.S. District Court decision to vacate EPA’s streams standard and the downstream protective value, which TFI said are tools that could be used to set NNC elsewhere. TFI noted that environmental groups are pushing EPA to utilize similar means to address nutrients in the Mississippi River Basin. “Nutrients occur naturally and in balanced concentrations contribute to healthy ecosystems,” said TFI Vice President of Scientific Programs Bill Herz. “We are extremely pleased with this agreement and the overall efforts of a unified industry and agriculture community. We have long argued that nutrients cannot be treated like traditional pollutants and have consistently held that strict federal NNC are not the best way to regulate them in waterways.” The agreement is contingent on Florida’s Legislature acting to direct FDEP to move forward.

Two killed when fert truck crashes into icy river

News, News Briefs

Eau Claire, Wisc. — Below normal temperatures are proving helpful in a challenging clean-up job on the Red Cedar River near Menomonie, along Interstate 94. On March 5 a truck from Michigan-based Dashman’s Transport carrying 28,000 pounds of Scott’s Turf Builder with Halts Crabgrass Preventer in 40-pound bags crossed the median during a snowstorm and crashed through river ice into 25 feet of water, killing the driver and a passenger. Authorities believe that Batrodin A. Siyad, 25, and Mohammed O. Malin, 26, both of Minneapolis, drowned shortly after plunging into the icy river. The men were reportedly heading from Ohio to Minnesota. Water Resources Engineer Pat Oldenburg, with the Wisconsin Department of Natural Resources, told Green Markets that the colder temperatures were “mitigating some of the toxic effects of the spill, slowing the release of product and reducing the toxicity potential.” He said that divers have recovered more than 200 bags and set up absorbent pads and containment booms, adding that work is going “as well as can be expected.” The clean-up is expected to continue for some time. In addition to inclement weather, the crash site itself makes work difficult as the site is between two spans of the I-94 bridge at the base of steep stream banks. The site can only be accessed by water or by placing heavy equipment on the bridge, which necessitates lane closures on a busy stretch of I-94. So far, no dead fish have been reported, and fish have been seen on video swimming above the debris field.

Idaho Power seeks to extend Simplot agreement

News, News Briefs

Pocatello — Idaho Power Co. is seeking permission from the Idaho Public Utilities Commission (IPUC) to extend a power sales agreement for a cogeneration unit at J.R. Simplot Co.’s phosphate fertilizer plant near Pocatello, Idaho. The unit generates 10 megawatts of energy on average for the utility as a byproduct of Simplot’s manufacturing process. The previous sales agreement expired March 1. Idaho Power’s application would grant interim approval of a sales agreement for two years while a permanent application is reviewed. The interim contract would be at the IPUC’s published avoided cost rates for projects averaging 10 megawatts or less. The proposed contract is “non-levelized,” which means the price Idaho Power pays Simplot escalates annually to more accurately reflect the actual value of the energy generated. The avoided cost rate is $52.28 per megawatt hour in 2013, $52.49 per mwh in 2014, and $55.91 per mwh in 2015. The rate to be paid small cogenerators is to equal the cost the utility avoids if it were to generate the power itself or buy it from another source. Simplot must provide data to Idaho Power that confirms its cogeneration unit will not exceed 10 megawatts on a monthly basis under normal and/or average conditions. Idaho Power will accept excess energy, but will not buy or pay for the “inadvertent energy.”

Growmark – Management Brief

Management Briefs

Jim Spradlin, Growmark Agronomy Division vice president, has announced organizational changes, effective March 16.

Ron Milby is named executive director, agronomy marketing, responsible for developing and executing comprehensive agronomy marketing strategies. He has served as Seed Division manager since 2000. He joined the Growmark in 1987 in systems and programming, led precision farming efforts, and served as lead in agronomy marketing and agronomy services.

Lance Ruppert is named agronomy marketing and implementation manager, reporting to Milby. Ruppert has served as seed district sales manager, crop protection marketing manager, and, most recently, seed sales and marketing manager.

Mark Thornsbrough will replace Milby as Seed Division manager. He has 26 years of service with Growmark, with experience as Crop Protection Division manager, Northern region marketing director, and forage and turf department manager, and as a crop specialist at a local FS company.

Matt Hynes is named seed sales and marketing manager. He joined Growmark in 1979 as a crop specialist at Marshall-Putnam Oil Co., now AgView FS. His professional experience also includes positions as agronomy/energy marketing manager in Storm Lake, Iowa; Northern region seed sales agronomist; general manager of Vermilion, now Illini FS; FS Seed DSM, seed marketing manager; and most recently, director, agronomy marketing.

Dr. Jeff Bunting will take over as Crop Protection Division Manager. He joined Growmark in 2004, serving in various positions, including regional seed agronomist, weed science technical manager, FS corn product manager, and crop protection marketing manager.

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