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Fertilizer International 497 Jul-Aug 2020

Fertilizer Industry News


Fertilizer Industry News

ISRAEL

New crop nutrient advice website

ICL Group has launched an interactive online advisory forum for farmers and agronomists.

The new website (AgroPro.com) was created in response to the difficulties in obtaining agronomic advice during the Covid-19 pandemic. It will offer a simple, accessible way for farmers and advisors to ask questions and get quick responses from ICL’s team of international agronomists and a global online agricultural community.

After signing up to the AgroPro community, farmers, whatever their crop or region, can search for content, post a crop nutrition question, share a resource, join a discussion thread or add a comment. Comprehensive up-to-date fertilizer information will be available on-demand and free of charge alongside nutrient management advice for field crops, orchards, plantations, ornamentals and turf.

Maya Grinfeld, head of ICL’s marketing department, said: “As the crisis caused by Covid-19 unfolds, we know that farmers worldwide are still eager for concrete information to improve their crops. In response to that we consulted ICL’s agronomists around the world about how we could help, and together we initiated AgroPro.com.”

ICL’s wants the website to become the go-to place to collaborate, network, seek advice and obtain practical crop nutrition information – whether for fertilizer, fertigation or foliar feeding.

Hillel Magen, ICL’s vice president for agronomy, said: “This is the first time the extensive professional knowledge and network of ICL agronomy experts, gathered from all across the world from multiple crops and climatic regions, has been made available – directly and indefinitely – to everyone. We believe, at times like this, that knowledge is a force for good that everyone should be able to access and benefit from.”

The ICL team supporting the website will be available 24/7 for interaction with farmers, advisors and agronomists. The new interactive online forum will also be available in multiple languages.

ICL agrees potash supply contracts with IPL and China

ICL Group has signed a contract to supply Indian Potash Limited (IPL) with 410,000 tonnes of potash during 2020. It follows an earlier agreement to supply 910,000 tonnes of potash to China this year.

The supply contract with IPL, India’s largest potash importer, was announced on the 18th May. It runs until the end of December 2020 and includes the option to supply an additional 30,000 tonnes of potash, if mutually agreed.

The contract is part of the five-year supply agreement established between ICL and IPL in 2018. The latest selling price is $50/t below the previous potash contract, according to ICL, but is reported to be in keeping with other recent contract prices in India.

Noam Goldstein, president of ICL’s potash division, said: “The contract that we have signed in India, one of ICL’s strategic markets, solidifies the leading position ICL has in this market. Favourable weather conditions and an increase in planted areas in several agriculture-intensive regions are contributing to a solid global demand for potash, as reflected by this supply contract, as well as by the contracts we recently signed in China.”

Mr Goldstein was referring to the signing of several contracts with ICL’s customers in China announced on 8th May. This commits ICL to supplying a total of 910,000 tonnes of potash to China by the end of 2020 – with the option to supply an additional 490,000 tonnes, if mutually agreed.

These contracts are part of three-year framework agreements established between ICL and its Chinese customers in 2018. The latest selling prices are $70/t below previous potash contracts, according to ICL, but are said to be in line with other recent contract prices in China.

INDIA

India takes first Turkish DAP delivery in a decade

India is to receive its first delivery of diammonium phosphate (DAP) from Turkey in ten years.

A Turkish fertilizer producer is scheduled to ship a 40,000 tonne DAP cargo to India in July, according to trade data. This is the first such delivery since 2010.

Argus Media is reporting that a freight enquiry has been issued to transport this shipment from the northern Turkish port of Samsun to the Indian port of Pipavav in the western state of Gujarat.

Unusual circumstances are behind the supply of DAP from Turkey. Fertilizer traders and buyers sourcing product for India have been forced to look westwards due to a lack of availability from China. Because of this, Indian importers have instead begun sourcing DAP from Morocco, Russia, Jordan, Egypt, Saudi Arabia and Turkey – as well as from China and Australia to the east.

Only four Chinese DAP cargoes to India are scheduled for July arrival, according to Argus Media, with these accounting for just 27 percent of the total scheduled arrivals of 776,000 tonnes that month. The lack of Chinese DAP available for export in June has supported prices. Chinese suppliers have held DAP offers in the $305-310/t f.o.b. range and above in recent weeks.

UNITED STATES

Mosaic seeks import duties on Moroccan and Russian phosphate

The Mosaic Company has asked US authorities to consider imposing import duties on phosphate fertilizers from Morocco and Russia.

The Florida-headquartered fertilizer producer has requested the launch of countervailing duty investigations into these imports, having filed petitions with the US Department of Commerce and the US International Trade Commission on 26th June.

In a statement, Mosaic, the largest phosphate fertilizer producer in North America, said it was taking this action because: “Large volumes of unfairly subsidized imports from Morocco and Russia are causing significant harm to Mosaic’s operations. Mosaic’s phosphate fertilizer business employs approximately 3,500 US workers and operates mines and production facilities in Florida and processing plants in Louisiana.”

Mosaic says it simply wants to restore fair competition in the North American market by asking US authorities to remedy the distortions caused by foreign subsidies for phosphate fertilizers.

“Mosaic believes in free trade and vigorous competition, and we believe we should compete on a level playing field,” said Joc O’Rourke, Mosaic’s president and CEO. “The duties we are seeking will help ensure that North American farmers can rely on the American phosphate industry to supply critical fertilizers for the long term.”

US authorities will firstly consider the petitions before potentially triggering extensive investigations. Mosaic says it will participate actively in any future proceedings.

Phosphate fertilizer import levels into the US have been a concern over the last 18 months due to their effect on prices and margins. Mosaic reported in February that high US import volumes in the first half of the 2019 were responsible for driving down prices throughout last year, due to a build-up of inventories for producers, distributors and retailers.

SAUDI ARABIA

MWSPC refinanced

The Saudi Arabian Mining Company (Ma’aden) completed the refinancing of the Wa’ad Al Shamal Phosphate Company (MWSPC) at the end of June.

MWSPC has signed new financing agreements for $2.3 billion with a number of leading local and regional banks. These were named as the Alinma Bank, the National Commercial Bank, Al-Rajhi Bank, Bank Albilad, Riyad Bank, Saudi British Bank, Bank AlJazira, Samba Bank and Saudi Fransi Bank.

The company will uses the proceeds from refinancing to pay down its existing loans. MWSPC has also rescheduled and transferred a $1.8 billion loan, previously held with Saudi Arabia’s Public Investment Fund, to the country’s Public Pension Agency.

According to Ma’aden, the refinancing replaces the original, more restrictive project financing terms for MWSPC with more attractive and flexible corporate loan terms.

The MWSPC is an $8 billion joint venture between three partners – Ma’aden (60%), SABIC (15 percent), and The Mosaic Company (25%). It owns and operates the integrated phosphate fertilizer production complex at the Wa’ad Al Shamal Minerals Industrial City in Saudi Arabia – one of the world’s most modern, largest and lowest cost phosphate production sites.

The refinancing arrangements, together with an extended debt repayment schedule, are “a step towards significantly strengthening the long term cash flow position for Ma’aden as part of its strategy to pursue new growth and development projects”, Ma’aden said in a statement.

“We are proud of the strong appetite from banks to lend to Ma’aden MWSPC during the current challenging market conditions. This is a reflection of our financial strength and growth prospects and the durability of our assets,” said Mosaed Al Ohali, Ma’aden’s CEO. “With abundant phosphate deposits in the north of Saudi Arabia, Ma’aden is well placed to build on its position as a leader in the global phosphates market and make Saudi Arabia a major contributor to global food security.”

He added: “The mining sector is the ‘Third Pillar’ of Saudi industry and is considered one of the most important sectors for achieving the goals of Vision 2030, alongside the petroleum and petrochemicals sectors, as it strongly supports economic growth and job creation in remote areas.”

EGYPT

Ammonia contract finalised

Maire Tecnimont subsidiary Tecnimont SpA has finalised a $350 million engineering, procurement and construction (EPC) contract with Egypt Hydrocarbon Corp (EHC) for a new ammonia plant at the Ain Sokhna complex near Suez.

The contract, provisionally announced last September, will see the construction of a new 1,320 t/d capacity ammonia plant at the site, and also covers the provision of extensive utilities and off-site facilities. Output from the new plant will feed EHC’s existing ammonium nitrate plant at Ain Sokhna.

The project is scheduled for completion 36 months after financial closure. Project finance is being arranged by the Italian export credit agency SACE and US EXIM Bank.

Basil El-Baz, EHC chairman, said: “This contract is another outstanding opportunity to work with Maire Tecnimont, a company we trust with best in class expertise and experience. The EHC expansion project is a vote of confidence in the Egyptian economy and the reforms that have been undertaken to date. The project will serve as a catalyst for the mining sector, attracting foreign investment and increasing employment opportunities and providing the raw materials needed for the sectors activities.”

Pierroberto Folgiero, Maire Tecnimont Group CEO, added: “With this achievement we are proving once again the great resilience of our core business in a particularly challenging period for the whole market. We are also really proud to play a strategic role in the development of the fertilizer industry in Egypt with an entrepreneurial client such as EHC.”

AFRICA

Fertilizers still reaching farmers

The Covid-19 pandemic continues to have little impact on fertilizer supply and distribution in Eastern and Southern Africa – with no shortages reported currently.

This was the conclusion of the latest edition of the Covid-19 Fertilizer Watch newsletter for the region published by the International Fertilizer Development Centre (IFDC). This monitors the status of fertilizer markets in Burundi, Ethiopia, Malawi, Mozambique, Rwanda, South Africa, Tanzania, Zambia and Zimbabwe.

All these countries are reporting normal movement of fertilizer products and as-usual trading conditions, according to IFDC. Yet concerns remain that renewed cross-border trade within the region could help spread the virus, says IFDC, as more countries relax their trading restrictions.

Key regional ports are still operating under modified conditions. The isolation and quarantining of returning crew are still standard, for example, as are reduced shift patterns. Road freight is also said to be moving normally, despite losses being incurred by logistics companies due to the decline in back-freight cargo. Covid-19 testing of truck drivers– with subsequent isolation, if necessary – is still mandatory at border crossings. In practice, however, this is being applied with varying degrees of rigour across the region.

Neither has Covid-19 seriously dented fertilizer imports into the region, Argus Media separately reported.

Kenya’s DAP imports, for example, totalled 140,000 tonnes in the first-quarter of this year, up from 132,000 tonnes during the same periods in 2018 and 2019. Total January-May arrivals for 2020 are estimated at 220,000 tonnes, up by 58,000 tonnes year-on-year (y-o-y). Kenya’s January-March urea imports of 33,000 tonnes in 2020, in contrast, were down 21,000 tonnes y-o-y, albeit up by 8,000 tonnes on the same periods in 2018 and 2017.

GERMANY

Gigawatt-scale ‘green hydrogen’ projects now possible

In a landmark moment, thyssenkrupp’s highly-automated European production line now allows ‘green hydrogen’ projects to be delivered at gigawatt scale.

thyssenkrupp electrolyser installation.
PHOTO: THYSSENKRUPP

The company – together with its strategic supplier and joint venture partner De Nora – announced a significant expansion in its manufacturing capacity for water electrolysis cells in June.

thyssenkrupp confirmed its annual production capability for the manufacture of electrolysis cells has now exceeded the one gigawatt power consumption threshold. This production capability will be extended continuously in the future, the company said.

The generation of green hydrogen via water electrolysis using renewable electricity is gaining in global importance – both as a zero carbon energy carrier and a CO2 -free feedstock for the chemical industry. Green hydrogen is the starting point for the sustainable manufacture of ammonia and fertilizers, for example, as well as methanol and synthetic natural gas

“Many countries around the world are currently planning to enter the hydrogen economy. Water electrolysis is increasingly emerging as a key technology for building a sustainable, flexible energy system and carbon-free industry. This opens up new markets for us,” says Sami Pelkonen, CEO of thyssenkrupp’s chemical & process technologies business unit.

thyssenkrupp, with its expertise in chemical plant engineering and construction, is well-placed to capitalise on large-scale green hydrogen production by coupling this frontend technology with the downstream manufacture of sustainable base chemicals such as ammonia and methanol.

“Only green hydrogen opens the way to climate neutrality – especially in energy-and resource-intensive industries, such as fuel, chemical or steel production. For this, we need water electrolysis on a gigawatt scale. We can deliver and, as the number and size of hydrogen projects increases, we will further expand our production capacities,” said Christoph Noeres, thyssenkrupp’s head of energy storage & hydrogen.

However, he also cautioned: “One thing is also clear: it won’t work without changes to regulatory conditions and fair market opportunities for green hydrogen. In addition to a further expansion in renewable energy, the focus needs to be on adjusting tax systems and crediting the CO2 -reducing effect of green hydrogen.”

thyssenkrupp’s patented water electrolysis cell design is up to 80 percent efficient and incorporates proprietary anodic and cathodic coatings developed by De Nora. To date, the company has delivered this technology to more than 600 projects and electrochemical plants worldwide, with a combined capacity rating of over 10 gigawatts.

TOGO

$3 million Covid-19 response loan approved

The African Development Bank (AfDB) has approved the reallocation of a $3 million loan to help Togo purchase agricultural inputs. The bank decided to redirect the funds to improve Togo’s food security in the wake of the Covid-19 pandemic.

The approval, granted on 18th June, enables a previously-approved African Development Fund (ADF) loan to be reallocated to the Togo Agro-Food Processing Project (PTA-Togo) instead. The funds will now be used to purchase fertilizers, organic pesticides and seeds for approximately 150,000 smallholder farmers.

This should help Togo’s farmers cope with the effects of Covid-19 during the upcoming cropping season. The AfDB estimates that the purchase of these inputs should boost Togo’s agricultural production by delivering an extra 12,700 tonnes of maize, 18,000 tonnes of rice, 1,700 tonnes of sesame seeds and 2,200 tonnes of market garden produce.

By disrupting food chains, the Covid-19 crisis has already affected food supply and demand, according to the AfDB. It has also caused a decline in the purchasing power of agricultural producers and reduced their access to inputs.

Togo is thought to be particularly vulnerable to a food crisis, as happened in 2008, if the pandemic persists. Its economy is highly dependent on the agricultural sector, which accounts for more than 40 percent of GDP and employs almost 65 percent of the workforce. The government of Togo wants to avert a potential crisis by purchasing highquality inputs for agricultural producers.

“In addition to reducing the effects of Covid-19 on food security, the planned input procurement operation will ultimately contribute to increasing production and thereby reduce food imports,” said AfDB director Martin Fregene.

The AfDB has set up a $10 billion Covid19 Response Facility (CRF) to help curb the effects of coronavirus in Africa. A budget support package to Togo from the bank worth $27.44 million is currently under consideration. This will be directed towards enhancing the nation’s economic and health resilience to Covid-19, if approved.

RUSSIA

Metafrax project makes progress

The Metafrax ammonia-urea-melamine (AUM) project continues to make progress, Casale confirmed in a recent statement.

Construction of the large AUM complex is making steady progress, Casale said, despite serious hurdles caused by the Covid-19 pandemic and the need to safeguard the health and safety of all staff involved in the project, particularly Casale’s own on-site team.

Casale said in a statement that it has complied fully with anti Covid-19 measures required by Russian authorities and that none of its own staff have tested positive for the virus. It remains confident that the ammonia unit will be delivered and come on-stream before the end of the year.

UralChem fertilizer production plant, Russia.
PHOTO: URALCHEM

“At the onset of the pandemic, appropriate measures and strategies were quickly put in place to soften – to the maximum extent possible – the negative impact of the situation, especially as far as the schedule is concerned. All the equipment for all of the units was already delivered on-site before the pandemic struck. Piping prefabrication and installation are [also] underway,” Casale said.

Casale also confirmed separately that the 1,500 t/d nitric acid plant at Navoyazot in Uzbekistan was on schedule to start-up at the end of May, following the successful completion of a ‘turboset’ surge test.

Uralchem doubles environmental investments

Uralchem more than doubled its investment in environmental projects in 2019 to RUB 861 million ($12 million). Projects included:

  • Upgrades to industrial waste purification systems at the company’s KCKK Branch in Kirovo-Chepetsk. This included the installation of a new gas purification system for the phosphoric acid and nitrates plants.
  • Effluent treatment to avoid water body contamination at the Perm Mineral Fertilizers (PMF) Branch in Perm. A waste separation and recycling scheme was also implemented.
  • Various environmental upgrades at Azot Branch in Berezniki, Perm, with a major focus on reducing water and natural gas consumption. Up-to-date purification systems were installed to recycle and neutralise industrial wastes.
  • Upgrades to sulphuric acid production at the Voskresensk Mineral Fertilizers (VMF) Branch in Moscow region, including the replacement of the absorption tower.

In a milestone moment for Uralchem, its PMF Branch successfully achieved ISO 14001:2015 certification in November 2019. The International Fertiliser Association (IFA) also awarded the PMF Branch its top global rating for responsible production management last year.

MOROCCO

Khemisset feasibility study published

Emmerson Plc published a feasibility study (FS) for its Khemisset potash project in northern Morocco in June.

The project is aiming for average steady-state production of 735,000 t/a and peak production of 810,000 t/a for its K60 MOP (muriate of potash) product. Khemisset will also produce one million t/a of de-icing salt.

Potash production at this scale will require pre-production capital investment of $387 million. A plant to produce deicing salt for the US market will require additional capital of $24 million.

The net present value (NPV, post-tax) of the venture – a measure of its profitability – is estimated at $1.4 billion. The project will also have an internal rate of return (IRR) of 38.5 percent over its initial 19-year mine life. Average annual earnings (EBITDA) of $307 million are expected, with a capital payback of less than 2.6 years.

The estimated delivered cost of potash to Emmerson’s target markets (Brazil, NW Europe, Morocco, South Africa) are said to be in the industry’s lowest quartile. While the project’s projected cash margins are in the top quartile, according to an analysis by Argus FMB.

Hayden Locke, Emmerson’s outgoing CEO, said: “The feasibility study shows that Khemisset has the potential to be a world class, low capital cost, high margin potash mine, which is a very rare asset in the global fertiliser industry. The strong agricultural investment thematic remains firmly in place driven by ever increasing global population and shrinking arable land, which necessitates the need for fertiliser and, in particular, potash.”

Locke added: “We are particularly pleased that the total pre-production capital cost has come down by approximately $19 million from the scoping study. The objectives for Emmerson for the rest of 2020 are to move the project through the various permitting requirements – including an Environmental and Social Impact Assessment – while concurrently moving forward our financing discussions for the next phase of Khemisset’s development.”

Latest in Africa

Sulphuric Acid News

OCP Group has launched what it calls the Mzinda-Meskala Strategic Programme, aimed at significantly expanding fertilizer production in the country. Initially announced in December 2022, the program is set to enhance production capacity in two key regions: the Mzinda-Safi Corridor and the Meskala-Essaouira Corridor. This initiative is part of OCP’s broader strategy to meet growing global demand for fertilizers while committing to long-term sustainability goals, including achieving carbon neutrality by 2040.

Sulphur Industry News

Shell Deutschland has taken a final investment decision (FID) to progress REFHYNE II, a 100 MW renewable proton-exchange membrane (PEM) hydrogen electrolyser at the Shell Energy and Chemicals Park Rheinland in Germany. Using renewable electricity, REFHYNE II is expected to produce up to 44 t/d of renewable hydrogen to partially decarbonise site operations. The electrolyser is scheduled to begin operating in 2027. Renewable hydrogen from REFHYNE II will be used at the Shell Energy and Chemicals Park to produce energy products such as transport fuels with a lower carbon intensity. Using renewable hydrogen at Shell Rheinland will help to further reduce Scope 1 and 2 emissions at the facility. In the longer term, renewable hydrogen from REFHYNE II could be directly supplied to help lower industrial emissions in the region as customer demand evolves.

Nitrogen Industry News

OCI Global says that it has reached an agreement for the sale of 100% of its equity interests in its Clean Ammonia project currently under construction in Beaumont, Texas for $2.35 billion on a cash and debt free basis. The buyer is Australian LNG and energy company Woodside Energy Group Ltd. Woodside will pay 80% of the purchase price to OCI at closing of the transaction, with the balance payable at project completion, according to agreed terms and conditions. OCI will continue to manage the construction, commissioning and startup of the facility and will continue to direct the contractors until the project is fully staffed and operational, at which point it will hand it over to Woodside. The transaction is expected to close in H2 2024, subject to shareholder approval.