All Posts from June 29, 2018

Brazil Freight Issues May Persist until Late August

Brazil, News Briefs

Issues with higher freight rates in Brazil may persist until an Aug. 27 hearing, according a Bloomberg report, citing Supreme Court Justice Luiz Fux. The Court is set to recess on June 30 before dealing with the issue. Earlier Fux had held out hope that the parties would iron out a settlement by the end of June (GM June 22, p. 25).

The government imposed minimum freight rates May 30 in response to a nation-wide truckers strike.

In the meantime, Supreme Court Chief Justice Carmen Lucia does have the option to issue an injunction to suspend the rule during the recess. However, it was not clear this would happen.

Fertilizer trade group ANDA has filed a petition in the federal court system to suspend the minimum freight costs. ANDA said 27 million mt of fertilizer still needs to be delivered between July and November, or 80 percent of the year’s total.

Other major groups are also onboard, including the Manufacturing Confederation CNI and the Agriculture and Livestock Confederation CNA, arguing that the rules are “binding and compulsory” and are unconstitutional, as they go against a free market. Even the CNTA, a group representing truckers, presented a proposal to discount the freight table by 20 percent.

And as previously reported, Yara International ASA, Oslo, told Bloomberg that the new regulation has raised freight rates 70-150 percent. The new rates are not only crimping margins, they are slowing grain-truck traffic to the ports by an estimated 50-60 percent, creating a shortfall of vehicles for fertilizer companies to use to ship fertilizer back to customers.

Another major player in Brazil, The Mosaic Co., Plymouth, Minn., sent a letter to customers asking them to switch to taking product on an FOB basis instead of CIF, or alternatively to pay higher prices.

While the new freight table is before the court system, Brazil President Michel Temer is dealing with longer-term freight issues. On July 2, he is planning to launch the National Logistics Plan (NLP), which defines priority investments to reduce freight transportation bottlenecks and will allow cutting 54.7 billion reais in transportation costs by 2025, according to the Folha de S. Paulo newspaper.

Saudi Arabian Mining Co. (Ma’aden) – Management Brief

Management Briefs, Saudi Arabia

Saudi Arabian Mining Co. (Ma’aden) on June 25 announced that Darren Davis has been appointed acting CEO, effective July 1. He is currently senior vice president, finance, and CFO. The company’s board of directors thanked Khalid bin Salem Al Rowais for having temporarily assumed the role as acting CEO, and for his many years at Ma’aden. Al Rowais, who is unable to continue in an executive capacity for health reasons, will continue serving the company as a senior executive advisor.

Davis joined Ma’aden in 2012 after a 20-year banking career. He was appointed CFO in 2016. The company said he has held several critical roles at Ma’aden, including leading the company fund raising program and playing an integral role in establishing some of its key joint ventures.

Anuvia™ Plant Nutrients – Management Brief

Management Briefs, Specialty

Anuvia™ Plant Nutrients, Zellwood, Fla., said on June 26 that Bryan Corkal has joined the company as CFO. In this new position, he will oversee and manage the company’s finances, including strategic and capital planning, risk management, and analysis of data. He will also ensure accurate reporting of financial information, identify areas of opportunity, and support due diligence for fundraising.

Anuvia said Corkal’s entry comes at a pivotal point for Anuvia as the company looks to expand capacity.

“Bryan brings a wealth of financial, logistics, and manufacturing expertise to Anuvia,” said CEO Amy Yoder. “His broad experience in manufacturing finance and understanding of agriculture, both domestically and internationally, will be an asset to the executive team in helping us reach our growth goals. He understands technology and brings an appreciation for sustainable technologies that have enormous potential to positively help farmers be better stewards of the land.”

Corkal comes to Anuvia from Calyxt Inc., a Minnesota-based consumer-centric food and agriculture company offering gene-editing technology that creates healthier specialty food ingredients. He was CFO. The company successfully completed an initial public offering in 2017.

Prior to Calyxt, he worked for Monsanto for over 17 years. He served as North American supply chain finance lead, and also held leadership positions in Latin America and Brazil. In addition, he participated in several key acquisitions, analyzed new product platforms, and helped develop strategic market opportunities. Prior to Monsanto, he was a senior consultant for Ernst and Young, Winnipeg, Canada.

Corkal holds a MBA from York University, Schulich School of Business, and a Civil Engineering degree from the University of Manitoba. He is a CFA® Charterholder and Certified Public Accountant (Missouri).

SQM Reverses Course on Ponce Appointment, Cites Public Differences of Opinion

Chile, Featured, News, Specialty

SQM, Santiago, has reversed an earlier decision to name former controller Julio Ponce, 72, as an adviser to the company (GM June 8, p. 1). The decision was announced in a statement from Chairman Alberto Salas on June 22 citing “public differences of opinion.” It was unclear whether Ponce’s brother, Eugenio, would also lose his post as an adviser.

SQM shares jumped as much as 3.7 percent in Santiago trading, according to Bloomberg, recovering some of the ground lost since June 5, when the appointment was reported.

Julio Ponce controlled SQM through holding companies and a pact with Japan’s Kowa. However, he gave up control earlier this year following an agreement with Chilean authorities to put an end to a four-year dispute over mining rights. As part of the deal, the company agreed to governance changes, including that no Ponce family member occupied a seat on the board. But the accord said nothing about an advising role.

The SQM decision to appoint Julio and Eugenio Ponce prompted inquiries by government agencies and regulators, as well as calls for a parliamentary investigation, according to Bloomberg, which reported that Communist Party youth staged a protest in front of the company’s headquarters in Santiago holding signs featuring Julio Ponce behind bars. Lawmakers from the left-leaning PPD party sent a request to President Sebastian Pinera, asking him to expropriate SQM and nationalize lithium.

Julio Ponce, the former son-in-law of Chilean dictator Augusto Pinochet, was fined about $70 million in 2014 by Chile’s securities regulator for illegal trading of shares in his holding companies. A court later reduced the fine to a maximum of $3.3 million. A year later, CEO Patricio Contesse left SQM following revelations of his involvement in illegal financing of political parties, in a case that is still under investigation. Contesse’s son is now a board member.

AN Dumping Alleged in Australia

Ammonium Nitrate, Australia, Featured, News

The Australian Anti-Dumping Commission on June 25 announced that it has initiated an investigation following an application lodged by ammonium nitrate producers Orica Australia Pty Ltd., CSBP Ltd., and Queensland Nitrates Pty Ltd. It seeks a dumping duty notice with respect to AN exported to Australia from China, Sweden, and Thailand.

The Commission said the investigation period is April 1, 2017, through March 31, 2018. However, it will examine details of the Australian market from April 1, 2014, for injury analysis purposes. The goods are for ammonium nitrate – prilled, granular, or in other solid form – with or without additives or coatings, in packages exceeding 10kg.

Orica welcomed the investigation. “Recent oversupply in global markets has led to offshore manufacturers dumping excess product in Australia at prices well below the prices they charge in their own markets, and in some cases, below the cost of manufacture,” said CEO Alberto Calderon. “We are for free trade, but also for fair trade.

“We recognize the important role imports play in providing customers with diversity of supply and competition. We just want to see the rules of the World Trade Organization and Australian legislation enforced,” continued Calderon.

“The Federal Government has previously taken measures to ensure Russian imports of ammonium nitrate are fairly priced, and Russian imports have continued to be an important source of domestic supply,” he added. “We are now seeing imports from China, Sweden, and Thailand being sold at prices well below the measures established for the Russian imports.”

Orica said dumped imports from China, Sweden, and Thailand have increased since 2015, displacing imports from other source countries, to comprise almost 50 percent of total import volumes in 2017.

Orica said it has provided the Commission with evidence of product sold into Australia at prices estimated to be between 17-44 percent below what the price would have been had the World Trade Organization rules been observed.

“We need to address this now,” said Calderon. “The proportion of dumped product is increasing, and if it’s not addressed now, it’s going to have a real impact on the medium- to long-term viability of this industry and put Australian jobs at risk.”

In other news on June 25, the Commission reported that Nitro Sibir Australia, an importer, has applied for an exemption for current anti-dumping measure against Russian AN, either shipped directly or via Estonia. High-density AN is subject to that measure, which was put in place in 2001 and renewed in 2016 for a five-year period. The Commission said it will continue with an inquiry on this exemption and make a recommendation.

Centurion Reports Agri-Gypsum Order

News, News Briefs, Specialty, Vancouver

Centurion Minerals Ltd., Vancouver, said on June 25 that its operating partner, Demetra Fertilizantes SA, has received new purchase orders for 2,000 mt of agri-gypsum material to be delivered from the Ana Sofia, Argentina, project to an Argentine distributor. The orders consist of both a premium granular and powder material.

The company said it has sold and shipped approximately 500 mt of agri-gypsum material during first-half June. It said this material has been primarily a blended powder consisting mostly of inventory that was abandoned by a previous operator of one of the Ana Sofia concessions.

“Our operating team has been very successful in generating sales from this blended material that cost us very little to prepare, is generating a good margin, and has led to additional purchase orders of premium grade materials,” said David Tafel, Centurion CEO. “Our near-term objective is to continue to scale-up operations to reach the processing plant’s design capacity.”

Centurion said its Ana Sofia agri-gypsum mine and processing facility have a current design capacity of 4,000 mt/m. Gypsum is extracted from near-surface, flat-lying beds within the sedimentary formation that extends throughout the property, located in Santiago del Estero Province, Argentina. The gypsum rock is fed into primary and secondary crushers, then screened and sorted into two agri-gypsum fertilizer products. The plant is designed to produce a pellet-sized granular product and a fine powder product (comprised of a minimum 85 percent gypsum content) that are each packaged into one mt tote bags.

Centurion said the project comprises two mining concessions totaling 50 hectares in size within a larger (approximately 600 ha) exploration permit area. The company reports that an initial inferred gypsum resource for the project was estimated as of 2016 to comprise 1.47 million mt averaging 94.1 percent gypsum, using an 85 percent cut-off grade that is the minimum required gypsum content for commercial-quality agricultural gypsum products in Argentina.

CommoditAg Adds Six Warehouses

Featured, News

CommoditAg, the Effingham, Ill.-based e-commerce platform, said on June 26 that it has added six Liqui-Grow warehouse locations in Northern Illinois and Iowa.

“Liqui-Grow, a division of Twin State Inc., is a powerful, innovative ag retailer who understands change and meeting customers’ expectations,” said Tim Bence, CommoditAg chief operations officer. “We know Liqui-Grow will be a great complement to CommoditAg’s existing powerhouse group of ag retailers. CommoditAg continues to expand across the Midwest, giving growers greater access, convenience, and more choice.

“Adding Liqui-Grow/Twin State Inc. to CommoditAg’s network is another large step toward our mission for convenience powered by trust,” continued Bence. The six warehouses include two in Illinois – Roseville and Prophetstown – and four in Iowa – Hampton, Traer, Mt. Pleasant, and DeWitt.”

“At Liqui-Grow, servicing growers has always been our top priority,” said Scott Tinsman Jr., Twin States co-owner. “Offering farmers additional purchasing options makes sense, because each operation is unique and evolving. Our company has grown significantly through agriculture’s changing environment for more than 60 years, and we are not about to stop now. CommoditAg gives growers of Iowa and northern Illinois another purchasing option that directly complements our full-service offerings.”

Liqui-Grow and Twin State are based in Davenport, Iowa. The family-owned Twin State was founded in 1958 and is focused on serving Iowa, Illinois, and Wisconsin. They join a growing CommoditAg network that includes Landmark Services Cooperative in Wisconsin, Sunrise Cooperative in Ohio, MKC in Kansas, and The Equity in Illinois.

CommoditAg said its website lets growers order chemicals and plant nutrition products shipped directly to their door or for pick-up at one of the many cooperating facilities. It also does not charge a membership fee.

“CommoditAg continues to expand across the Midwest, giving growers greater access, convenience, and more choice,” said Bence. “Adding Liqui-Grow/Twin State Inc. to CommoditAg’s network is another large step toward our mission for convenience powered by trust.”

IPL Lines Up Near-Term Gas

Australia, News, News Briefs, Nitrogen

Incitec Pivot Ltd. (IPL), Southbank, Victoria, said on June 25 that consistent with news announced in March (GM March 2, p. 29), it has signed agreements for the interim gas supply to its Gibson Island nitrogen plant in Queensland from the commencement of the commercial operations on the Northern Gas Pipeline (currently anticipated to be December 2018) until Dec. 31, 2019. Without a new gas supply, IPL had warned that the future of the Gibson Island plant was in jeopardy.

“While the finalization of the interim gas agreements is a significant step, it is just one of several in our ongoing efforts to secure future operations at Gibson Island,” said Jeanne Johns, managing director and CEO.

IPL said the new agreements will increase manufacturing costs by approximately A$50 million in fiscal year 2019. IPL is continuing to assess options for sourcing gas for Gibson Island for calendar year 2020 and 2021.

The various agreements for supply and delivery have been entered into with Central Petroleum Ltd. and certain of its subsidiaries, Macquarie Mereenie Pty Ltd., subsidiaries of APA Group, and Jemena Northern Gas Pipeline Pty Ltd.

As previously announced, IPL has entered a joint venture with Central Petroleum to develop a gas tenement acreage in Queensland. The project is being fast-tracked, with IPL committing $20 million for drilling and appraisal works, which are expected to be completed during calendar year 2019. If sufficient reserves are proven, it is anticipated that development of the acreage will start to yield gas in 2022 and supply Gibson Island’s gas needs.

Philphos Plant Rehabilitation in Works

News, News Briefs, Philippines, Phosphate

The Philippine Phosphate Fertilizer Corp. (Philphos) will begin a rehabilitation project on July 1 at its plant in Isabel, Leyte, according to the Philippine News Service (PNA). The plant was idled by Typhoon Yolanda in 2013.

The company has received some US$150 million in insurance proceeds, with a like amount still expected. In the meantime, according to PNA, Philphos Chairman Salvador Zamora has disclosed that Dubai’s G.S. Gupta, Chairman of Agrifields, has also agreed to contribute another $150 million to help restart the facility, which can produce up to 1 million mt/y of phosphate products. In the past, much of the production was used domestically, with the remainder exported.

Zamora is optimistic about the rehab completion, expecting it in early 2019, according to PNA, which reports that the facility would again employ 400.

Sulfuric acid for the plant is expected to come from Leyte-based Philippine Aluminum Smelting & Refining Co. (PASAR). Zamora said PASAR is currently paying $15-$25 per ton to dispose of the acid.

Alltech Fertilizers Attain Organic Certification

News, News Briefs, Specialty

Alltech Crop Science, Lexington, Ky., the agronomic division of Alltech, reported that it has attained organic certification in North America for two of its naturally based products, Grain-Set® and Agro-Mos®. The two micronutrient fertilizers, which are based on amino acid and fermentation technology, join the company’s other Organic Materials Review Institute (OMRI)-certified products, including Soil-Set®, Crop-Set®, and Galvanize® Contact. The company noted that it now offers a certified organic product for every stage of a plant’s growth cycle.

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