Fertilizer Industry News

Fertilizer Industry News

BELARUS

Belarus unrest triggers share price rises

Recent protests in Belarus have triggered a wave of share price volatility, London’s Financial Times reported on 18th August.

Shares in several major listed fertilizer companies have risen sharply on the news that workers at Belaruskali had joined a national strike called in response to the country’s disputed presidential election. The state-owned company is one of the world’s major potash producers. Belarus is also the second largest potash exporter globally, after Canada.

The strike is said to have forced the Belarusian Potash Company (BPC), the country’s international potash trading arm, to adjust its sales plans. BPC told Financial Times that it was “quite hard to say as for now how quickly the situation will get back to normal”.

On the back of this news, shares in The Mosaic Company, the US-headquartered phosphates and potash producer, have jumped more than one-third since the start of August, according to Financial Times, while shares in Israel’s ICL and K+S of Germany – two other major potash producers – have also risen by 18 percent and 14 percent, respectively. Share prices in all three companies remained elevated on the 26th August, at the time of writing.

Analysts believe that any drop in shipments from BPC could provide other international potash producers with an opportunity to gain market share. The company controls more than 20 percent of the global potash market and is a key supplier to large buyers in China and India. BPC secured a major new potash supply contract with China in May (Fertilizer International 496, p8).

“If you have a short outage or a [production] slowdown, it can have a substantial impact on supplies in the major markets,” commented CRU’s senior analyst Humphrey Knight. “Other producers will be looking to fill that gap.”

Disruption to Belaruskali’s operations could also prove domestically damaging – given that potash exports are a key foreign revenue earner for Belarus. “The closure of the mines will be a major blow to the economy and government,” commented David Riley of Argus Media.

No major or immediate impact on potash prices is currently expected, however, due to the prevalence of long-term contracts in the potash market. Overall demand for potash has also been flat this year. This has been linked to low crop prices, the Covid19 pandemic, and reduced demand for biodiesel made from crops such as corn and palm oil.

Unusually large inventories held by major potash buyers are also dampening the market, according to CRU’s Humphrey Knight. “Potash [inventories] in some key downstream markets remain high and these continue to weigh on global demand and prices,” he said.

The news of possible strike disruption follows a record breaking summer production period for Belaruskali. The company set new records for both potash ore mining and potassium chloride fertilizer (MOP) production in June and July.

Belarus state news agency BelTA reported MOP production above 1,120,00 tonnes and 1,140,000 tonnes in June and July, respectively. Daily MOP shipments by the company also reached a record high of 46,000 tonnes on 3rd August. n

MOROCCO

OCP to double EMAPHOS production capacity

OCP Group and its partners, Germany’s Budenheim and Prayon of Belgium, are to begin constructing a new purified phosphoric acid (PPA) plant at Jorf Lasfar, through their jointly-owned Euro Maroc Phosphore (EMAPHOS) subsidiary.

This new plant will effectively double EMAPHOS’ annual production capacity to 280,000 tonnes P 2 O 5 when it enters production during the fourth-quarter of 2022.

Basic engineering was completed in March with the project currently at the detailed engineering stage. Construction is scheduled to start in the first-quarter of 2021. Equipment with long lead-in times will be ordered later this year in advance of construction commencing.

The major expansion project is part of an ambitious strategy by the three EMAPHOS partners to establish a world lead in PPA production. The development will also strengthen OCP’s presence in the speciality phosphate market.

Budenheim, part of massive food conglomerate Oetker, specialises in high-value, phosphate-based food, pharmaceutical and technical products. Prayon, which is jointly owned by OCP Group and the Société Régionale d’Investissement de Wallonie (SRIW), is a world-leading phosphoric acid technology company and speciality phosphate producer.

SPAIN

Fertiberia to make green ammonia

Fertilizer producer Fertiberia and energy firm Iberdrola have teamed up to build Europe’s largest green hydrogen plant.

Hydrogen generated by the new $174 million plant will be used to manufacture ammonia for industrial purposes.

The plant’s 20MW water electrolysis unit will produce 720 t/a of green hydrogen. Electricity will be supplied by a 100MW solar plant linked to a 20 MWh lithium-ion battery storage system. The green hydrogen plant is scheduled to start-up in 2021.

The green hydrogen generated will supply Fertiberia’s ammonia plant at Puertollano, 250 kilometres south of Madrid, reducing the plant’s natural gas consumption by 10 percent. The substitution of green hydrogen will avoid an estimated 39,000 tonnes in annual CO 2 emissions.

Fertiberia will also source electrolysis-generated oxygen from the new hydrogen plant and use this to manufacture nitric acid, an intermediate used in ammonium nitrate production at Puertollano.

“We are launching the first major green hydrogen project in Europe, demonstrating that – thanks to renewables and technological innovation – it is possible to continue to meet the needs of the electrification and decarbonisation of our industry,” said Ignacio Galán, the chairman of Iberdrola. “The initiative shows the opportunities offered by the energy transition to develop innovative projects as the focus for industrialisation and employment in our country.”

Fertiberia president Javier Goñi added: “The partnership with Iberdrola allows Fertiberia to take a further step in its ambition to become a European reference for sustainable solutions for agriculture, and to lead the paradigm shift required for the energy transition in the chemical sector, thanks to the manufacture of green ammonia from domestic renewable energy sources.”

Spain produces an estimated 500,000 tonnes of hydrogen each year, mainly for use in the refining, chemical and fertilizer industries. Most of this is produced from natural gas and, as a consequence, generates five million tonnes of CO2 emissions annually.

At a global scale, the annual production of hydrogen – 70 million tonnes – is associated with 830 million tonnes of CO2 , a volume that is equivalent to two percent of total global emissions. Decarbonising global hydrogen production – through the use of 100 percent renewable energy – would however increase global electricity demand by around 10 percent, some estimates suggest.

RUSSIA

Dorogobuzh completes ammonia plant upgrade

PJSC Dorogobuzh, part of Acron Group, has officially completed a five billion rouble upgrade of an ammonia plant at its nitrogen fertilizer complex in Russia’s Smolensk region.

The upgrade has increased the plant’s ammonia production capacity by one-fifth to 2,100 t/d. The revamp is being hailed as a landmark achievement. This is the first time in the whole of the post-Soviet era, according to Acron, that a Russian ammonia plant based on KBR technology has achieved this output level.

The Dorogobuzh ammonia plant, which dates from 1979, had an original design capacity of 450,000 t/a. Its annual ammonia output is now expected to increase by an extra 130,000 tonnes. More than 440,000 tonnes of ammonia has already been produced since the upgrade was carried out, says Acron.

Dorogobuzh is the first ammonia plant in Russian to use KBR’s KRES heat exchange reformer technology. The resulting energy efficiency improvements have reduced the plant’s natural gas consumption by seven percent (per tonne of ammonia).

LLC Novgorodsky GIAP designed the ammonia plant upgrade. The project itself was carried out by 60 Russian contractors who brought in over 1,100 specialists and 50 pieces of equipment. Dorogobuzh and Acron employees also participated.

“The upgrades to the Dorogobuzh ammonia unit are an essential part of our technology development programme,” commented Vladimir Kunitsky, Acron’s CEO. “The increase in the unit’s capacity will give us additional ammonia to use for new projects.”

Uralchem resumes production at Berezniki

Uralchem’s Berezniki nitrogen fertilizer complex resumed full-scale production on 30th July, after an unplanned shutdown earlier in the month.

The Perm Krai site, the location of Ural-chem’s Azot Branch, ceased all operations on 7th July, following a dramatic increase in chloride content in the nearby Kama river, the source of Berezniki’s process feed water. The shutdown decision was taken after Uralchem judged that the contaminated river water threatened the operational safety and integrity of its process equipment. After 10 days, the Kama River’s chloride content dropped to acceptable levels at the intake point, allowing management to begin to restart production.

The resumption in output proceeded in stages. Ammonia production at Unit 1 began initially, followed by the restart of its downstream process units for granular ammonium nitrate and non-concentrated nitric acid production. Unit 2 operations resumed last, allowing the production of ammonia, concentrated nitric acid, nitrite and nitrate salts to begin once again.

The unplanned shutdown has cost Uralchem about $8 million in lost production. As a consequence, the company has asked local Russian authorities and environmental regulators to investigate and deal with the dumping of the chemicals that caused the river pollution.

In a statement, Uralchem requested “urgent measures to normalize the situation, carry out appropriate inspections to establish the violation of current legislation, and to bring the perpetrators to justice.” The city of Berezniki has already launched an official criminal investigation into the pollution incident.

SAUDI ARABIA

Topsoe selected for green ammonia project

Saudi Arabia has selected technology from Denmark’s Haldor Topsoe for a $5 billion green hydrogen project.

The project forms part of the country’s $500 billion Neom smart city development, a personal initiative of Saudi crown prince Mohammed bin Salman. This city will be built in the Tabuk region on the Red Sea near Saudi Arabia’s border with Jordan.

The project involves generating 650 t/d of green hydrogen from four gigawatts of renewable electricity. This will then be converted into 3,500 t/d (1.2 million t/a) of ammonia using Topsoe technology.

Topsoe’s partner Air Products will exclusively off-take all of the green ammonia produced. The company will then transport energy globally, in the form of green ammonia, before eventually converting it back into carbon-free hydrogen at local hydrogen refuelling stations.

Air Products plans to use the project to supply carbon-free hydrogen to fuel cell powered buses and trucks by 2025. Distribution to these end customers will require an additional two billion dollar investment by Air Products. Once implemented, the project will avoid the emissions generated by 700,000 cars – the equivalent of more than three million tonnes of CO2 annually.

“We are honoured to be part of this innovative world-scale project to reduce carbon emissions. Topsoe is focused on improving energy efficiency in today’s technologies while developing the solutions of the future. This is a great step ahead,” said Amy Hebert, Deputy CEO and EVP, Chemicals, Haldor Topsoe.

The Neom smart city is described as “a living laboratory and a hub for innovation”. It will be based on 5G technology and focus on high-technology and digital industries such as robotics and artificial intelligence (AI).

Contractor Bechtel is in charge of designing and building Neom’s transport, power and water infrastructure. This include a completely renewable energy supply system based on the generation and storage of solar and wind power. Futuristic features such as an artificial moon, phosphorescent beaches and flying taxis are also planned.

CANADA

BHP delays Jansen decision

BHP is delaying the final go-ahead decision for its massive Jansen potash project until the middle of next year.

BHP – the world’s largest mining company – had planned to make a final investment decision for Jansen by February 2021. But delays in shaft completion at the multi-billion dollar Canadian project have now pushed back that date by months, the company has confirmed

BHP said Jansen’s progress was delayed during the second-quarter by the slower-than-expected installation of shaft linings and the implementation of a Covid19 response plan.

The Jansen project is 86 percent complete currently. BHP still expects to invest $2.7 billion – out of the $4 billion already set aside – to finish the excavation and lining of the project’s production and service shafts. The remaining investment also covers the installation of surface infrastructure and utilities.

The Australian-based mining major has been weighing up Jansen’s ultimate future for the last seven years, while continuing to invest billions of dollars in shaft sinking at the Saskatchewan project site, 140 kilometres east of Saskatoon.

Executing stage 1 of the Jansen project will require an estimated $5.3-5.7 billion. This is the capital cost of bringing the project into production and the sum BHP’s board will now have to authorise – or not – in mid-2021.

If and when it enters production, the Jansen mine will produce eight million tonnes of potash annually – an estimated 15 percent of world supply – during its 70-year mine life. Jansen has the potential to be expanded in three further phases – each costing $4 billion – to reach an annual production capacity of more than 16 million tonnes. The eventual price tag of the multiphase project could be as high as $17 billion, according to some estimates.

BHP is still bullish over Jansen’s prospects. “Jansen is a tier 1 deposit, with potential to be one of the lowest cost operations in the world,” commented BHP’s CEO Mike Henry on 18th August.

Making an entry into the fertilizer market by becoming a major potash player has been a long-held ambition for BHP. In 2010, The Canadian government blocked BHP’s $40 billion hostile takeover of Potash Corp (now Nutrien).

Other large global mining companies are making similar strategic investments. Earlier this year, for example, BHP’s rival Anglo American successfully bought Sirius Minerals, the developer of the UK-based Woodsmith polyhalite mining project that is currently under-construction in Yorkshire, near England’s North Sea coast (Fertilizer International 495, p10).

TRINIDAD

Yara to cut ammonia output

Norwegian fertilizer producer Yara took one of its two ammonia plants in Trinidad offline in August. The move is in response to weak market conditions caused by the Covid-19 pandemic.

The 1.5 million tonne capacity Tringen 1 ammonia plant will now undergo maintenance work. It will stay offline until market conditions recover, Yara said.

in recent months, Tringen 1 has been running at a lower production rate than its sister plant on the island, the 495,000 tonne capacity Tringen 2 plant. While Tringen 1 produced 156,500 tonnes in January-April this year, for example, Tringen 2 produced 175,000 tonnes over the same four-month period.

Three of Trinidad’s ammonia plants are now offline due to the global slowdown in industrial ammonia demand. Yara’s shutdown follows a similar decision by Nutrien to take two of its four ammonia units on the island offline until the market recovers. Yara’s announcement will remove a further 40,000 tonnes of ammonia from the export market each month, according to analysts Argus.

Trinidad’s ammonia industry has, in any case, been struggling to compete, being squeezed by cheaper gas in rival regions such as the US and Europe. Last year, Yara closed Yara Trinidad, its oldest and smallest plant on the island, due to its high production costs.

Caribbean/US Gulf spot prices for ammonia have fallen by over $50/t in the past three months, reports Argus, to around $150-170/t f.o.b. Several plants are said to be running at below cost at this price level. First-half ammonia exports from Point Lisas are also down 18 percent yearon-year, according to Argus.

UNITED KINGDOM

Million tonne polyhalite orders

ICL has secured international contracts totalling one million tonnes for Polysulphate, the polyhalite fertilizer produced at its Boulby mine in the UK.

The latest contracts include:

• A five-year agreement with a leading Ukrainian fertilizer company for a total of 350,000 tonnes
• A 12-year agreement for over 500,000 tonnes for a major customer in Poland
• An agreement with 16 regional distributors in China to sell 100,000 tonnes of Polysulphate and Polysulphate-based fertilizers in 2020.
• A three-year agreement, with an optional one-year extension, for the use of Polysulphate for added-value fertilizer production by a leading producer and distributor in Spain.

“As the world’s first and only producer of polyhalite, we are proud to have been able to make our contribution to maintaining food production during this very challenging time,” said Andrew Fulton, ICL vice president and general manager of the Boulby mine. “Recognised by the UK Government as an essential industry during the Covid19 pandemic, everyone involved with the company has worked hard to maintain production and the news of these latest contracts show that we are well placed to continue moving forwards.”

Fulton added: “It also demonstrates the increasing acceptance of Polysulphate as a unique high-quality multi nutrient fertilizer, demonstrated by over 600 field trials showing increases in growth, yield and quality in a wide variety of crops and conditions.”

ICL is currently the world’s only producer of polyhalite for the fertilizer market. The company has seen its Polysulphate sales volumes increase by 50 percent in each of the past three years.

PAKISTAN

Agritech urea plant restarts

Pakistan’s Agritech Ltd has restarted urea production at its Tara plant, 100 kilometres southwest of Islamabad, after an eight month interruption.

The former Pak-American Fertilizers plant has been shuttered since December 19th last year due to a lack of natural gas availability. Production did, however, resume in early August after the government allocated re-gasified imported LNG to Agritech at a subsidised tariff.

The 1,300 t/d urea plant is being supplied with 28.5 million scf/d of gas at a rate of $4.48/MMBtu for three months, according to local reports. Similarly, the 300 t/d capacity urea plant operated by Fatima Fertilizers is also being supplied with gas at this concessionary rate.

The government intervention is designed to boost Pakistan’s domestically-supplied urea stocks. The country’s urea inventories will fall below 200,000 tonnes by the end of this year, according to production ministry estimates. The government is expecting high urea demand for several months from December 2020 onwards – due to a rise in agricultural subsidies for fertilizers, seeds, pesticides and tractors. These latest subsidy increases are designed to boost Pakistan’s domestic crop production.