Fertilizer International 494 Jan-Feb 2020
31 January 2020
Fertilizer Industry News
Fertilizer Industry News
UNITED KINGDOM
Anglo in possible £386m Sirius rescue bid
Sirius Minerals is in talks with Anglo American about a £386 million cash offer for its UK-based polyhalite mine project.
Anglo is potentially offering to buy-out Sirius Minerals at a price of 5.50 pence per share. This would provide shareholders with a 34 percent premium on the company’s 7th January share price, the level shares were trading at before the takeover talks were announced.
Sirius shares were valued as high as 37 pence, going back to August 2018, but were trading at just over four pence a share before Anglo’s approach was revealed. The proposed buy-out price “could provide certainty to Sirius’ shareholders”, Anglo said in a statement.
Sirius Minerals confirmed on 8th January that its board was in “advanced discussions” with Anglo American. Under UK takeover rules, Anglo now has until 5th February to make a formal offer for the business. Sirius has told Anglo that it expects to recommend the takeover to its shareholders, if a firm offer is made at the currently proposed share price.
Sirius has successfully raised $1.2 billion (£920 million) of ‘stage 1’ finance for its under-construction Woodsmith mine in North Yorkshire, near Whitby, close to England’s North Sea coast. But the junior mining company was seeking $3.8 billion to fully develop the project and become the world’s biggest polyhalite producer.
However, Sirius was forced to abandon its ‘stage 2’ financing plan in September last year, citing adverse bond market conditions (Fertilizer International 493, p12). Instead, it announced a slowdown of construction at the Woodsmith mine and launched a comprehensive six-month project review. This root-and-branch review is examining financing options, project optimisation and cost reductions, as well as possible strategic partnerships.
Sirius subsequently issued a revised two-stage development plan in November 2019 in an update on the progress of its strategic review.
Anglo American’s current offer is provisional and the company is not obliged to proceed to a firm offer. The massive multinational mining company has also reserved the right to reduce or vary its offer. Specifically, Anglo could make an offer on less favourable terms:
- With the agreement of Sirius’ board
- Or if another party makes a lower offer for Sirius
- Or if Sirius announces a ‘whitewash transaction’.
In a statement, Anglo confirmed it had been potentially interested in the Woodsmith mine project for some time. This was due to “the quality of the underlying asset in terms of scale, resource life, operating cost profile and the nature and quality of its product”.
The polyhalite resource beneath the Wood-smith mine “has the scale, thickness and quality to be mined efficiently using bulk mining methods through a relatively simple, low-energy, non-chemical production process”, commented Anglo. The long-term profitability of the project, specifically its potential to operate at an earnings (EBITDA) margin well above 50 percent, was another attractive feature.
Anglo said the potential Sirius takeover was in keeping with its strategy of focusing on world-class assets and shifting its portfolio to “products that support a fast-growing global population and a cleaner, greener, more sustainable world”.
If the current discussions proceed to a formal offer, Anglo says it will commit to providing the necessary financial, technical and marketing resources needed to successfully deliver the project – adding that this was in the interests of both Sirius’ employees and its customers.
Anglo has signalled that it would broadly keep to the latest development plan for the Woodsmith mine published in November, if the takeover proceeds. However, it will “update the timeline, optimise mine design and ensure appropriate integration with its own operating standards and practices”.
The takeover, if confirmed, would mark Anglo American’s re-entry into the fertilizer market, having previously divested its Brazilian phosphate assets to China Molybdenum for $1.5 billion four years ago. This divestment was part of a major restructuring and debt reduction exercise carried out in 2016.
Sulphur in agriculture conference
ICL UK held its first conference dedicated to sulphur as a crop nutrient in December. The one-day UK-based event was attended by over 75 delegates
According to the company, the conference had two clear aims: firstly, to raise awareness of the role of sulphur in crop nutrition and rising soil sulphur deficiency; and, secondly, to demonstrate the benefits of a precise and balanced crop nutrition strategy.
Soils requiring fertilizer application to replenish their sulphur content are increasingly widespread, explained professor Steve McGrath of Rothamsted Research. While at one time adequate supplies came from atmospheric deposition, today’s cleaner air means sulphur needs to be applied to maximise crop yields and quality. In 1970, it was estimated that eight million t/a of sulphate were deposited onto UK soils from industrial emissions. Today, the figure is less than 500,000 t/a. Yet fertiliser application on UK farms only adds an additional 220,000 t/a of sulphate, leading to substantial and widespread sulphur deficits. Sulphur also has a vital role to play in nitrogen uptake by crops. “Where sulphur is deficient, expensive nitrogen is wasted,” said professor McGrath.
It is important to check for essential soil macro- and micronutrients, said Jonathan Telfer of Lancrop Laboratories. There are three key stages where sulphur measurements need to be taken in his view: firstly, a pre-season soil check for the crop nutrition plan; secondly, in-season leaf and tissue analysis to check whether nutrients are deficient; and, finally, post-season grain analysis to evaluate the efficiency of nutrient use and content. Sulphur deficiency in all UK soils has increased from 60 percent in 1995 to 97 percent in 2017, according to Lancrop’s data.
Sulphur can play an important part in wheat and potato quality. Dr Tanya Curtis of Curtis Analytics outlined how food processing and retail industries are increasingly concerned about the acrylamide content of crops, something that sulphur can help control. An inadequate sulphur supply can lead to the accumulation of the amino acid asparagine and sugars in crops. These are precursors of acrylamide, a neurotoxin that can form at high temperatures in baking, roasting and frying.
ICL’s Boulby mine in northern England produces a range of polyhalite-based fertilizer products. These are marketed and sold under the Polysulphate brand name. Conference delegates were presented with ICL’s latest research findings and independent UK trial results. These demonstrated the agronomic benefits of Polysulphate products – particularly as a source of sulphur.
Peter Scott, UK and Ireland technical director for Origin Fertilisers, unveiled positive findings for Polysulphate use on maize, grassland and alfalfa. Tom Land, Agrii UK’s fertiliser manager, also described the consistently good results obtained when using Polysulphate on wheat, oilseed rape and pulses.
Andrew Stillwell, technical sales manager for Bartholomews Agri Food, presented the results of spring barley fertilization trials carried out in collaboration with the International Potash Institute (IPI). These compared fertilization with ICL’s FertilizerpluS and PotashpluS products to a conventional fertilization programme using potassium chloride (MOP). The use of PotashpluS was found to improve barley yield at all nitrogen application rates and splits. For malting barley, it also helped to improve final grain nitrogen content, and other quality parameters, providing better returns to the grower.
TURKEY
Veolia supplies technology to Alkim
Veolia Water Technologies is to supply Istanbul-based Alkim Alkali Kimya with production technology for a new sulphate of potash (SOP) plant.
Alkim, one of the world’s largest sodium sulphate producers, is investing in a 50,000 t/a capacity water-soluble SOP unit at its Koralkim production complex in Turkey. This will enable the company to produce, market and sell premium potash fertilizer for the first time.
Veolia will equip the plant with the processing technologies required for high-quality SOP production. The company’s proprietary HPD® crystallisation systems will be an integral part of the new production unit. The technology package offered to Alkim will also include multiple-effect crystallisers. These will be used to synthesise around 35,000 tonnes of food-grade sodium chloride annually, a by-product of the process.
The project’s capital costs will be kept low by using surplus cogeneration capacity at the Koralkim site to help power the new SOP unit. Opex (operational expenditure) will also be controlled by recovering the clean condensate and residual heat used for dissolving and heating incoming potassium chloride solution.
Veolia recently announced it was supplying crystallisation technology for Alkimia Group’s new 25,000 t/a capacity water-soluble monoammonium phosphate (MAP) plant in Gabes, Tunisia (Fertilizer International 493, p11)
UNITED STATES
Mosaic cuts production further
The Mosaic Company announced fresh phosphate production cuts in December in response to market conditions.
Phosphate production at its Central Florida operations will be reduced by 150,000 tonnes per month, the company confirmed in a statement.
The latest phosphate production cutback comes on top of the already announced 500,000 tonne reduction in Mosaic’s 2019 second-half output, primarily in Louisiana. The company is also operating its Canadian potash mines at lower rates currently (Fertilizer International 493, p8).
Although temporary, the production cuts are extended and indefinite. “Production in both phosphates and potash will return to full rates when required to meet customer needs,” Mosaic said in a statement.
The potash and phosphates producer linked the latest production cut to a number of market factors. “A third consecutive disappointing application season in North America has led to continuing high inventories and price weakness. Mosaic will not produce at high rates when we are unable to realize reasonable prices,” said Joc O’Rourke, Mosaic’s president and CEO.
He added: “We believe our extended production curtailments will contribute to balancing the global supply-and-demand picture as we move into 2020. With fertilizer-depleted soils and rising agricultural commodity prices, we continue to expect robust demand and strong business conditions in the year ahead.”
Mosaic now expects its fourth-quarter potash and phosphates shipments to be “modestly below” its previous guidance. It also expects its profitability for phosphates production (gross margin per ton) to fall “significantly below” previous guidance – as a direct consequence of the low sales volumes and low prices now being realised for phosphates.
Wilbur-Ellis buys Nachurs Alpine Solutions
Wilbur-Ellis has announced its purchase of Nachurs Alpine Solutions (NAS), the pioneering North American precision agriculture firm and leading speciality chemicals manufacturer.
The purchase of NAS will add to Wilbur-Ellis’ existing assets portfolio. The company is already a leading international distributor of agricultural products, animal nutrients and speciality chemicals.
NAS has pioneered the precision-placed liquid fertilizer market in the US and Canada over many decades, since its formation in 1946. The company currently employs 200 highly-skilled staff and owns seven strategically-located and highly-automated manufacturing plants, together with 85-plus distribution terminals across North America.
NAS formulates its liquid fertilizer products to meet a wide range of crop nutrition needs and different growing conditions. Notably, it was one of the first fertilizer producers in North America to adopt 4Rs Nutrient Stewardship. The company has also diversified in the past 20 years. It now provides de-icing and freeze prevention solutions for the transportation and mining industries, as well as fluids for the energy sector.
Following the buy-out, NAS will become a new business division of Wilbur-Ellis, operating alongside the company’s other core businesses – namely Agribusiness, Nutrition and Connell. NAS products will continue to be sold in the US and Canada under the signature NACHURS® and ALPINE® liquid fertilizers brands.
The new division will be led by current NAS president and CEO Jeff Barnes. He will report directly to John Buckley, the president and CEO of Wilbur-Ellis.
“NAS is a great strategic fit for Wilbur-Ellis,” said John Buckley. “It has also demonstrated an extraordinary ability to innovate. Over the past five years, the company has launched over 50 new products, which has provided greater stability in changing markets and contributed significantly to their product portfolio.”
“At NAS, our business is built on quality, integrity and innovation,” said Jeff Barnes. “So, we’re proud to be joining Wilbur-Ellis, a company that supports those values, has an unwavering commitment to safety, and is dedicated to serving customers.”
Van Iperen expands in the US
Van Iperen International is fully up and running in the US market.
The leading Dutch speciality fertilizer producer is now operating in the United States through subsidiary company Van Iperen America, based in Miami, Florida. This provides Van Iperen with the ability to directly supply US distributors and growers, and provide better support to its customers in Central and South America.
Van Iperen offers a wide range of speciality fertilizers and biostimulant products for fertigation and foliar application. The company already operates in more than 100 countries world-wide.
“Our roots go deep in the fertilizer business and we are thrilled to provide our world-wide crop experience and top-quality specialty fertilizers to the US and Latin American markets,” said Erik van den Bergh, managing director, Van Iperen International.
Van Iperen also has a strong partnership with Milliken, exclusively offering Milliken’s non-staining Liquitint Agro colourants in its high-quality NPK formulations.
“We… offer a broad range of Liquitint Agro coloured formulations that provide distributors with a great opportunity to differentiate themselves in a competitive marketplace, with tailor-made colours for tailor-made NPK formulas.”
Van Iperen says there is a growing recognition from both manufacturers and farmers that colour can play a significant and highly beneficial role in fertilizer formulations, seed treatment and crop protection.
“Liquitint Agro colourants make it possible to blend thousands of colours from across the spectrum on demand from only three liquid primary colourants held in inventory,” said Steven Span-hove, senior sales director, Milliken Europe. “We are seeing a trend that deeper and brighter colours represent quality, as well as a preference towards natural and earthy reds, blues and greens.”
NETHERLANDS
Tecnimont and Stamicarbon celebrate 10th anniversary
Maire Tecnimont Group and its urea licensing subsidiary Stamicarbon celebrated a decade in business together in December.
Italian-headquartered Maire Tecnimont purchased Dutch company Stamicarbon from DSM in 2009. The 10th anniversary of the buy-out was jointly celebrated on 11th December with an event at Limbricht Castle in the Netherlands. This was attended by Stamicarbon staff and the management of both companies.
The anniversary provided both companies with an opportunity to reflect on the joint achievements of the last ten years, and look ahead to future shared opportunities.
From Maire Tecnimont’s point of view, the purchase of Stamicarbon has enabled it to become a leading technology provider for urea production. More than 250 urea plants worldwide use Stamicarbon’s technology currently. The purchase has also strengthened Tecnimont’s profile in the fertilizer industry, as both a technology licensor and EPC contractor. Stamicarbon, in turn, has been able to broaden its commercial offering to customers, and expand its international footprint by taking full advantage of Maire Tecnimont’s global network.
Speaking at the 10th anniversary event, Fabrizio Di Amato, the chairman and founder of Maire Tecnimont Group, praised “the technological attitude and innovation DNA of Stamicarbon”. He added: “The group currently owns more than 1,400 patents and has more than four R & D centres. The next step to further foster innovation was the establishment of NextChem.”
Pierroberto Folgiero, Maire Tecnimont’s CEO, said: “Innovation is the result of vision and investment. But to take off it needs know-how and human capital, two qualifications that Stamicarbon has always had.”
Folgiero added: “The future driver for innovation and transformation of the group will be digitalisation, where we were able to make a step forward by acquiring the company Protomation. The acquisition also brought growth to Stamicarbon, as we were able to expand our portfolio of products.”
Pejman Djavdan, Stamicarbon’s CEO, said. “In order to keep feeding a growing population we will focus, together with the group, on sustainable intensification of agriculture with fertilizers. This means that production of fertilizers needs to be optimised to have less impact on the environment and to be based on renewable energy sources. But also new technologies have to be developed to make fertilizers more efficient and effective. A challenge that we and Maire Tecnimont will work on.”
Koolen Industries invests g4m in Proton Ventures
Clean energy conglomerate Koolen Industries has invested four million euros in the ammonia production and storage company Proton Ventures.
Proton Ventures is at the forefront of ‘green’ ammonia production technology. The Dutch company designs and builds pressurised and cooled ammonia storage plants, as well as small-scale ammonia production plants known as NFUEL units.
“Proton Ventures’ unique and patented technologies enable the production of ammonia using clean energy sources. Ammonia is an ideal storage solution for solar power plants and wind farms as it is particularly well suited to store and transport large amounts of energy in efficient ways. This makes it a perfect fit for Koolen Industries as we continue to push the global transition to clean energy,” said Kees Koolen, the CEO of Netherlands-based Koolen Industries.
Proton Ventures is currently involved in a number of renewable energy ventures, including large-scale ammonia storage projects in Estonia and Bulgaria, The investment by Koolen will help Proton speed-up the global roll-out of its NFUEL ammonia production units.
“This creates great opportunities for ongoing cooperation and opens doors for us to bigger projects,” said Hans Vrijenhoef, the CEO of Proton Ventures.
“Alongside our lithium and flow battery capabilities, ammonia adds value to our portfolio, especially with regards to clean energy storage at large scale. This form of energy is relatively cheap, and it is easy to transport and import into the Netherlands or indeed into other markets,” said Gerben Hilboldt, Koolen’s chief technology officer.
ERITREA
AFC invests $50m in Danakali
The Africa Finance Corporation (AFC) is to make a $50 million strategic investment in Australian potash project developer Danakali.
This will be delivered through a subscription agreement for the placement of ordinary shares. The investment will provide AFC with a 32 percent equity stake in Danakali.
The latest agreement with AFC, announced in early December, forms part of a wider funding package to develop and construct the Colluli sulphate of potash (SOP) project in the Danakil region of Eritrea, East Africa.
The newly-announced $50 million equity stake takes AFC’s total participation in the project to $150 million. It adds to AFC’s $100 million credit approval for the Colluli Mining Share Company (CMSC) previously announced last August (Fertilizer International 492, p10).
AFC will be granted the right to nominate up to two directors to Danakali’s board as part of its new equity investment.
Colluli is a well-advanced, fully-permitted and construction-ready potash project. Danakali says it is now ready to begin project execution, putting Colluli on-track for production as early as 2022.
CMSC finally issued a notice to proceed to DRA Global, the Colluli project’s preferred EPCM contractor, at the end of December. This allows DRA to begin the EPCM process, according to Danakali. DRA’s contract with CMSC covers:
- All aspects of Colluli project design, project management, procurement, construction management and supervision
- Commissioning of the complete process plant and associated infrastructure
- Awarding and overseeing major contracts for early works, earthworks, structural, mechanical, piping, electrical and instrumentation works, and the laboratory and permanent camp.
Initial EPCM activities include: a review and update of front end engineering design (FEED) by DRA, geotechnical test work, and the purchase of critical items including reverse osmosis equipment.
Tony Harrington, Colluli project director, said: “I am very pleased we will be formalising our partnership with DRA. With the majority of project funding committed, the CMSC team is ready and eager to collaborate with DRA and commence work immediately. This is the moment our personnel and other stakeholders in Eritrea have been waiting for.”
INDIA
KBR to supply technology to Talcher project
KBR is to supply ammonia synthesis technology for the Talcher ammonia-urea project in India.
It secured the Talcher contract from Wuhuan Engineering, the project’s EPC contractor. KBR will provide the technology license, basic engineering design, catalyst, and proprietary process equipment for the project.
Talcher is a flagship coal-to-urea project for India. It is a central part of government efforts to reduce the country’s import reliance by increasing domestic urea capacity. The project is owned by Talcher Fertilizer Limited (TFL), a joint venture between a number of Indian public sector companies.
The Talcher project is a particularly pioneering venture as no other operational urea plants in India are based on coal gasification technology at present.
“We are proud to be part of this significant project in India,” said Doug Kelly, KBR president, technology solutions. “KBR’s ammonia synthesis process will deliver flexibility, reliability, and cost competitiveness to Talcher for years to come.”
Ramagundam aims for March start-up
The Ramagundam urea plant is expected to complete commissioning and begin commercial urea production by the end of March, according to its owners Ramagundam Fertilizers and Chemicals Ltd (RFCL).
The plant’s gas supply pipeline from Kakinada is now operational and its flare stack was also recently commissioned.
The plant will be the first of the previously closed state-owned fertilizer plants In India to be brought back on-line. A number of plants are being revamped and upgraded as part of Indian government ambitions for self-sufficiency in urea production.
RFCL was formed as a joint venture between six partners in 2015. National Fertilizers Ltd (NFL) and Engineers India Ltd both have a 26 percent stake. Other partners include the Gas Association of India Ltd (14.3%), HTAS Consortium (11.7%), the Fertilizer Corporation of India Ltd (11%) and the government of Telangana (11%).
The new plant’s foundation stone was laid by India’s prime minister Narendra Modi in August 2016.
TOGO
Dangote backs phosphate fertilizer project
Dangote Industries Limited has signed a project agreement with the government of Togo to develop the country’s phosphate resources.
The $2 billion project to build a one million tonne capacity phosphate fertilizer production plant forms part of Togo’s National Development Plan. This proposed plant will consume locally-supplied phosphate rock, with initial mine development work due to start before the end of 2019.
Togo, with over two billion tonnes of phosphate reserves, is one of the Africa’s leading phosphate producers.
Under the terms of the agreement, Dangote will supply ammonia as a raw material for phosphate fertilizer production, while the Togolese government will provide access to the country’s phosphate rock resources. Dangote, said to be Africa’s biggest industrial group, is expected to become Africa’s largest ammonia producer on the completion of its large-scale petrochemicals and fertilizer complex near Lagos, Nigeria.
Dangote also unveiled plans to construct a 1.5 million t/a capacity cement manufacturing plant in Lomé, Togo’s capital. This plant will satisfy domestic and regional cement demand and use clinker from both Togo and Nigeria.
Aliko Dangote, Dangote Group’s president and CEO, said: “This partnership is in line with our agenda in creating prosperity and enhancing economic development not only in Togo but also in Africa. In addition, Dangote Group is determined to support the Government of Togo in its industrialisation strategy… making Togo an attractive investment destination.”
Faure Gnassingbé, Togolese President, said: “By processing our phosphate… we will be able to provide our farmers with good quality fertilizers at an affordable cost. Having an industrial investor like Dangote shows that our efforts to improve the business climate are paying off.”
SAUDI ARABIA
Aramco sell-off raises almost $26bn
The Saudi Arabian government’s sell-off of 1.5 percent of its shares in Saudi Aramco in early December has become the world’s biggest ever initial public offering (IPO).
The share sale raised $25.6 billion for the Saudi state. This still fell some way short of the valuation hoped for by Saudi crown prince Mohammed bin Salman, however. Although the sell-off notionally values Aramco at $1.7 trillion, bin Salman had reportedly been looking to raise $100 billion from the sale.
Although the original aim of the flotation was to attract international institutional investors to the Saudi market, in the end it was only offered to local and regional investors.
The proceeds of the IPO will be used to diversify the oil-dependent Saudi economy. They will be invested into strategic projects via the country’s Public Investment Fund.
