Fertilizer International 517 Nov-Dec 2023
30 November 2023
Fertilizer Industry News
Fertilizer Industry News
CANADA
BHP commits $4.9 billion to Jansen Stage 2
BHP has approved an investment of $4.9 billion (CAD 6.4 billion) in stage two of its Jansen potash project (Jansen Stage 2) in Saskatchewan, Canada.
The investment, announced at the end of October, will transform Jansen into one of the world’s largest potash mines, doubling production capacity to approximately 8.5 million t/a.
This latest tranche of investment follows BHP’s final investment decision in Jansen in August 2021 and the approval of $5.7 billion (CAD 7.5 billion) for the project’s first stage (Jansen Stage 1) (Fertilizer International 504, p8). Prior to this, the company had invested a preliminary $4.5 billion (CAD 4.9 billion) in developing the project.
“This is an important milestone that underscores our confidence in potash and marks the next phase of the company’s growth in Canada,” said Mike Henry, BHP’s CEO. “We believe Jansen will deliver long-term value for shareholders and the local community, and will position BHP as one of the leaders in the global potash industry.”
The Stage 2 investment in Jansen is part of BHP’s strategy to focus on commodities that will grow strongly in future in response to global megatrends, such as population growth, urbanisation, rising living standards and decarbonisation.
“Potash, used in fertilisers, will be essential for food security and more sustainable farming,” commented Henry. “We are advancing our sustainability and economic development priorities for Jansen and we are pleased with the progress of our ongoing work with the Governments of Canada and Saskatchewan, as well as local and Indigenous communities.”
Jansen Stage 1 is progressing on schedule and is now 32 percent complete, with first production from this stage expected in late 2026. Construction of Jansen Stage 2, meanwhile, is due to take around six years and is expected to deliver its first production tonnages in 2029. This will be followed by a three-year ramp-up to full output.
Jansen Stage 2 is expected to deliver approximately 4.36 million t/a of potash at a capital intensity of approximately US$1,050/t. This is lower than Stage 1 costs due to the advantages of existing and planned infrastructure.
BHP approved an initial funding commitment of $188 million for Stage 2 in October 2022. This was to procure long lead equipment and finance the start of the process plant foundation works.
The extra $4.9 billion of Stage 2 investment will be used to:
- Develop additional mining districts
- Complete the second shaft hoist infrastructure to handle higher mining volumes
- Expand processing facilities
- Add more rail cars.
Stage 2 investment also includes funding to increase storage at Westshore Terminals in Delta, British Columbia. This remains BHP’s main port for shipping potash from the Jansen mine to its overseas customers.
Jansen has been designed with sustainability in mind and is expected to have approximately 50 percent less operational (Scope 1 and 2) greenhouse gas (GHG) emissions per tonne of product, and use up to 60 percent less fresh water, in comparison to the average Saskatchewan potash mine
Jansen Stage 2 is expected to have an internal rate of return of 15-18 percent and a payback period of approximately six years from first production, according to a BHP evaluation. The company is also forecasting underlying earnings (EBITDA) margins for Jansen Stage 1 and Stage 2 of approximately 65-70 percent due to the mine’s low cost position ($105-120/t).
The overlap of Stage 2 of the project with continuing Stage 1 construction is expected to offer operational benefits. These include fully capturing the experience of the integrated project team, the continued use of existing contractors, reduced overheads, and savings on mobilisation and demobilisation costs. These should help deliver potential cost saving of $300 million.
The Jansen mine has the potential for two additional expansion stages over the longer term – subject to further studies and company approvals – enabling the mega project to reach an ultimate production capacity of 16-17 million t/a (Fertilizer International 515, p54).
MOROCCO
OCP commits to green ammonia ramp-up
Phosphates giant OCP secured a e100 million ($106 million) loan in October for two large-scale solar power plants from the International Finance Corporation (IFC), the World Bank’s investment arm. These will be used to help generate green ammonia as a raw material for low-carbon fertilizer production.
The two solar photovoltaic (PV) plants will have a combined capacity of 400 megawatts (MW) and a storage capacity of up to 100 megawatt-hours. They will be located in the mining areas of Khouribga and Benguerir. The large scale solar photovoltaic project will be the first in Morocco to include integrated storage infrastructure – as well as being the largest project of its kind in North Africa.
This is the second green loan secured by OCP from IFC. It follows a similar e100 million IFC loan granted in April 2022. This was earmarked for the construction of four solar plants with a combined capacity of 202 MW in the same two mining areas.
In June, OCP announced plans to invest $7 billion in a green ammonia production plant in Tarfaya in southern Morocco, using hydrogen generated from renewable electricity sources such as solar. This plant could produce 200,000 t/a of green ammonia by 2026, increasing to one million t/a by 2027, and ultimately three million t/a by 2032, Reuters have reported.
The investment in green ammonia is part of an overall $13 billion strategy by OCP to shift to renewable energy and construct a domestic supply chain for ammonia. The aim is to increase OCP’s green fertiliser production and fully convert its production operations to renewable power. The strategy’s other goals are to achieve full carbon neutrality within the business by 2040 and reach a water desalination capacity of 560 million m3 in 2026.
“Today’s agreement is a major milestone towards our target of using 100 percent renewable energy in our fertilizer production by 2027,” said Mostafa Terrab, OCP Group’s chairman and CEO. “Our deepening collaboration with IFC reflects our alignment on the urgency of addressing the global challenges of food security and climate change simultaneously”.
“IFC is proud to support OCP in its journey to reduce its carbon footprint, a strategy that will have long-term positive effects not only in Morocco, but also on the global food supply,” said Makhtar Diop, IFC’s managing director. “The fertilizer industry needs leading companies like OCP to embrace a sustainable path forward, and IFC is committed to supporting this important shift.”
OCP is one of the world’s biggest ammonia importers, spending $2 billion on imports of this basic chemical last year. The company consumes ammonia on a large scale as a raw material in diammonium phosphate (DAP) and mono-ammonium phosphate (MAP) production. The company is the largest phosphate fertilizer producer globally. It also operates the world’s largest phosphate fertilizer complex at Jorf Lasfar in Morocco.
Prior to the war in Ukraine, OCP’s ammonia demand was partly sourced from Russia via a pipeline through Ukraine and then by shipments through the Black Sea. However, this ammonia supply route has been closed since February 2022 and, to offset the resulting deficit, OCP struck an ammonia supply deal with North America during 2023, according to Reuters.
WORLD
Fertilizer affordability hits six-month low
Fertilizer product affordability dropped to a six-month low at the end of September, according to Argus Media, with fertilizers becoming more expensive as a result of high demand, while crop prices also retreated following grain and oilseed harvests in the northern hemisphere.
The Argus fertilizer affordability index is a global assessment calculated from the ratio between fertilizer and crop price indices. It fell to 1.09 points in September, down from 1.24 points in August. An affordability index above one indicates that fertilizers are more affordable compared to the base year (2004), while values below one indicate lower affordability.
The fertilizer index – which includes international prices for urea, DAP and potash adjusted by global usage – rose sharply in September to its highest level since April 2023, supported by increases in diammonium phosphate (DAP) and urea prices. At the same time, wheat, soybeans and corn prices all fell on the month due to high stocks following the start of northern hemisphere harvests.
High DAP prices, in particular, have pressured affordability. Phosphate prices in September were pushed upwards by firm demand in south Asia, as buyers from the subcontinent competed for the available supply. Strong phosphate demand, for example, caused Chinese DAP prices to rise by $113/t between the beginning of August and 25th September.
Firm urea prices also weighed on fertilizer affordability, with the Middle East benchmark rising by 11 percent monthon-month in September to $388/t f.o.b. Global MOP prices, meanwhile, entered a period of stability following strong demand from Brazil earlier in the third quarter. Consequently, the Brazilian granular MOP cfr price dipped slightly to $358/t in late September, equivalent to a three percent fall on the 24th August price.
CHINA
Stamicarbon wins another low energy urea plant contract
Stamicarbon has signed contracts for a new Ultra-Low Energy urea plant in Shouguang, Shandong province, China. This will be the eighth urea plant worldwide to use Stamicarbon’s Ultra-Low Energy design.
The contracts, awarded by Shandong Lianmeng Chemical Company, cover licensing and equipment supply for a 2,334 t/d capacity urea melt and prilling plant. They cover technology licensing, proprietary equipment – including high-pressure super duplex stainless steel equipment – and associated services.
Stamicarbon’s Ultra-Low Energy design allows heat supplied as high-pressure steam to be used three times instead of the usual two. This reduces steam consumption by about 35 percent and cooling water consumption by about 16 percent, versus traditional processes.
Stamicarbon was awarded a contract for a 3,850 t/d capacity Ultra-Low Energy urea plant – its largest to date – in Jiangxi province, China, earlier this year (Fertilizer International 514, p10).
“We’re excited to launch a project using our Ultra-Low Energy design, which has shown itself to be the top choice for energy efficiency and sustainability in urea production. With this project, we are further expanding our footprint in China, aiming to address the region’s growing demand for urea,” said Pejman Djavdan, Stamicarbon’s CEO.
UNITED ARAB EMIRATES
Fertiglobe strengthens collaboration with AD Ports
Fertiglobe has signed a memorandum of understanding (MoU) with AD Ports Group. This sets out the scope for logistics and supply chain collaboration on storing and shipping urea and ammonia at ports in Egypt and the UAE.
The two companies plan to explore the opportunities for using AD Ports Group’s state-of-the-art cargo handling and storage infrastructure more fully. This will assist Fertiglobe as it moves to strengthen its urea and ammonia storage and shipping capabilities, reduce its greenhouse gas (GHG) footprint, enhance operational efficiency and further automate its logistical activities.
Fertiglobe – a strategic partnership between ADNOC and OCI Global – is the world’s largest seaborne exporter of urea and ammonia, the largest nitrogen fertilizer producer in the Middle East and North Africa (MENA) region, and an early mover in low-carbon ammonia.
Ahmed El-Hoshy, CEO of Fertiglobe, commented:
“We are pleased to partner with AD Ports Group, a UAE national champion and a global leader in maritime trade and logistics. Through this MoU we will identify compelling opportunities across our logistics and supply chain management requirements, enabling us to bolster our ability to store and ship urea and ammonia from Egypt and further optimize our logistics’ cost structure.
“Today, our strategically located production facilities benefit from direct access to international ports and distribution hubs, allowing us to easily access major end-markets and regions with high demand. This MoU will enable us to expand our partnership beyond Egypt and the UAE, as well as to the shipping and storage of green ammonia, in line with our commitment to deliver more sustainable products to the world.”
The two companies say that they will also explore opportunities for collaboration in other regions. The development of supply chain solutions for green ammonia is also an area of mutual interest, given that Fertiglobe’s existing operations are strategically located near key shipping routes.
Fertiglobe has also announced that it will install a 10 t/d carbon capture unit, manufactured by UK-based company Carbon Clean, at its ammonia plant at Ruwais. The unit will be installed at Ruwais by Fertiglobe’s partner ADNOC.
EUROPE
Yara and John Deere launch digital farming partnership
John Deere and Yara have formed a new partnership to increase fertilization efficiency. The collaboration will integrate Yara’s agronomic expertise with John Deere’s use of precision technology and advanced machinery.
The aim is to help farmers increase their yields and optimise fertilizer use. These objectives will also help achieve the agricultural policy goals of the EU’s Farm to Fork Strategy.
The digital partnership will connect two powerful apps: John Deere Operations Center™ and Yara’s Atfarm digital platform. Better connectivity will ensure crops receive the right amount of nutrients, where and when these are needed, by providing farmers with tailored crop nutrition recommendations and then delivering these precisely.
“To be able to produce more efficiently and sustainably, farmers need high-quality, actionable data and the technology to put these insights into practice. This is where digital farming will play a big role in helping farmers optimize the productivity of their fields,” the two companies said in a statement.
Yara’s Atfarm app enables farmers to monitor the biomass development and nitrogen uptake of their crops throughout the season and access field-specific variable rate application maps for fertilizers. These data can now be seamlessly shared as a WorkPlan with John Deere Operations Center™ . This will enable farmers to wirelessly synchronise fertilizer prescriptions to any John Deere farm machine featuring a Gen4 or G5 Display.
Delivering crop nutrients though variable rate application maps is sometimes viewed as complex and laborious. The John Deere-Yara partnership should, however, make the task of achieving higher yields with less fertilizer inputs much easier. Trials have shown that farmers, if they can implement Yara’s agronomic advice, should achieve yield increases of up to seven percent with a 14 percent saving in nitrogen fertilizer use.
The seamless connectivity between Yara’s Atfarm and John Deere Operations Center™ will be piloted from spring 2024 with a group of farmers in Germany, France and the UK. Yara and John Deere will also collaborate on other opportunities for improving nutrient use efficiency.
“Achieving the ambitious goal of the Farm to Fork Strategy to reduce nutrient losses by 50 percent in 2030 requires the industry to work together. Through partnering with John Deere, farmers will be able to use our recommendations in an easy, practical way. This contributes to more sustainable food production without adding complexity for farmers,” said James Craske, VP Digital Solutions Europe at Yara International.
Katharina Nies, Marketing Manager Precision Ag at John Deere, said: “For small grain producers, crop nutrition is one of the largest opportunities for optimisation. We are excited to partner with Yara, as this is a unique combination of science-based fertilization recommendations together with John Deere’s connected, highly precise & intelligent machines. With that farmers can achieve highest levels of nutrient use efficiency.”
Yara created Atfarm in 2018 to help farmers use nitrogen fertilizers more efficiently with the help of advanced satellite technology and vegetation indices. Although precision techniques have been used in agriculture for decades, Atfarm is designed to be easy to use and as simple to understand as possible.
The web and mobile versions of Atfarm reduce complexity by combining variable rate applications, nutrient planning and satellite monitoring into one app. This helps farmers to make informed decisions about crop nutrition from seeding to harvest, says Yara.
INDONESIA
Pusri to build new urea plant
Pupuk Sriwidjaja Palembang (Pusri), a subsidiary of state-owned Pupuk Indonesia, has approved the construction of the new Pusri-IIIB ammonia and urea plant at its existing production complex at Palembang, south Sumatra.
The company has secured the funding and agreed an engineering procurement and construction (EPC) contract to build the 1,350 t/d (445,000 t/a) capacity ammonia and 2,750 t/d (907,500 t/a) capacity urea units – using technology licensed from KBR and Toyo, respectively. Wuhuan Engineering and Adhi Karya will construct the plant, while a syndicate of eight state-owned and private-sector companies will provide the necessary funding.
Once complete, Pusri-IIIB will replace the existing Pusri 3 and Pusri 4 plants at Palembang. By incorporating the latest low-energy production technology, the new units will consume natural gas feedstock much more efficiently and also increase the reliability of fertilizer production at the site.
Pusri has yet to announce the start-up date for the new plant.
UNITED STATES
Atlas Agro receives $325 million investment
Macquarie Asset Management (MAM) has invested $325 million in Atlas Agro Holding AG (Atlas Agro).
This investment will help finance Atlas Agro’s project portfolio of industrial-scale green nitrogen fertilizer plants in the US and Latin America. These will use green hydrogen as a substitute for the fossil fuels conventionally used in nitrogen fertilizer production.
The company’s business model is based on locally supplying competitive carbon-free nitrate fertilizers in agricultural regions, thereby displacing standard imported products and eliminating the carbon footprint associated with their production and transport.
“MAM, with their experience in projects and infrastructure, ability to initiate support investments with a wide range of expertise and their commitment to accelerate decarbonization of hard-to-abateindustries, is an ideal partner for us as we approach construction of our first plants in the United States,” said Petter Østbø, CEO of Atlas Agro.
Atlas Agro says the investment is a significant step forward in delivering its expansion across the Americas – and realising its vision of providing a sustainable alternative to conventional fossil-fuel based fertilizers and moving away from the large volumes of greenhouse gas (GHG) emissions these produce.
In October, Atlas Agro announced it had been selected by the US Department of Energy’s Office of Clean Energy Demonstrations (OCED) to begin negotiating an award to develop the Pacific Northwest Hydrogen Hub. This hub is expected to receive up to $1 billion in Bipartisan Infrastructure Law funding.
The selection and subsequent negotiations should enable Atlas Agro to work in partnership with OCED to establish the Pacific Northwest Hydrogen Hub. OCED funding will support Atlas Agro’s participation in the hub by helping expedite planning, detailed design, environmental permitting and the procurement of long-lead equipment.
BRAZIL
Brazil to export green ammonia to Croatia
Project developer Green Energy Park (GEP) has announced a large-scale green ammonia project in Brazil. This will supply GEP’s other planned project, a 10 million t/a capacity import terminal on the Croatian island of Krk.
The one million t/a capacity green ammonia project includes around 5GW of dedicated renewable power generation capacity. The project is located in the special economic zone of Luis Correia in Piaui state in the northeast of Brazil. The state’s first major port is scheduled to open in Luis Correia in December and will target exports to European markets.
GEP plans to export green ammonia generated by its project via this port and then ship this to the recently-announced Krk ammonia import terminal.
