Brazil: EBX group plans nitrogen joint venture with Orascom

Brazil’s EBX group, controlled by billionaire industrial magnate Eike Batista, is planning to build a US$3 billion fertilizer plant in Brazil together with Egypt’s Orascom Construction Industries (OCI).

The facility would have capacity to produce up to 3 million tonnes per year of nitrogen fertilizers. The complex completion is expected in 2016.

The project will be sited near the Port of Acu that is being developed by logistics group LLX, which is also a part of the EBX conglomerate. The investment is estimated in US$ 40 billion. At its completion, Acu Superport is expected to be connected to major railway and road infrastructure allowing access to regions across the country that are responsible for north of 75% of gross domestic product. The Superport also allows seamless access to the three major agricultural producing regions comprising 87% of total Brazilian agricultural output.

Rio de Janeiro-based EBX said the project would help Brazil, an increasingly important producer and exporter of agricultural commodities, to decrease its reliance on imported fertilizer.

The group said natural gas to be used for the fertilizer production could be supplied by OGX, an oil and gas firm also controlled by Batista, who is Brazil’s richest man.

OCI is one of Egypt’s largest corporations with projects and investments across Europe, North America, the Middle East and North Africa. The company directly employs more than 84,000 people and generated US$ 4.9 billion in revenues and US$ 1.1 billion in EBITDA in 2010.

Brazil is an agricultural superpower, with abundant land, water and labor, and it accounts for approximately 7 percent of world fertilizer consumption.

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India: FACT project to set up an ammonia-urea complex

In the fiscal year 2011, India produced 21.88 million tonnes of urea, but they have to import millions of tonnes each year to meet the domestic demand, and they expect demand-supply gap of at least 8 million tonnes by 2020. This is the background for a project of Fertilisers and Chemicals Travancore Ltd (FACT), a fertilizer maker located in the West Coast, to to set up an ammonia-urea complex, which will consist of an ammonia plant of 2,000 tpd capacity and urea plant of 3,500 tpd capacity. The estimated investment cost towards this will be Rs 4,500 crore. FACT is a government runned company involved in the production and marketing of fertilizers and caprolactam, but who has also interests in petrochemicals, hydrometallurgy, and pharmaceuticals.

Uruguay: The country could have the sixth largest natural gas reserve of the region

The U.S. Geological Survey (USGS) assessed potential technically recoverable shale gas and shale oil resources in the Norte Basin of Uruguay, resulting in total estimated mean resources of 13,361 billion cubic feet of gas (BCFG), 508 million barrels of oil (MMBO), and 499 million barrels of natural gas liquids (MMBNGL). The Norte Basin of Uruguay is the southern extension of the Paraná Basin of Brazil, and is largely covered by volcanic rocks. The Basin includes the departments of Tacuarembó, Salto, Paysandú, Artigas and Rivera and the US company Schuepbach is working there under a 2-year exploration contract which was signed with ANCAP (the Uruguayan national fuel association) in October 2009. The latter will begin perforations next December in the Departments of Salto and Tacuarembó.

Brazil: Study on Phosphate Reserves in the NE region of Para State

Toronto-based Rio Verde Minerals Development Corp. has announced an estimation of the mineral resources of their 100% owned Fosfatar phosphate project, located in the northeastern region of Para State, which consists of two locations: the Sapucaia Phosphate Target and the Boa Vista Phosphate Target. Their estimation speaks of approximately 1.93 million tonnes, with an average grade of approximately 19% P2O5 (using a 3% P2O5 cut-off). The Resource Estimate was prepared by Coffey Consultoria e Servicos Ltda. (“Coffey”), a branch of Coffey International Ltd., in accordance with NI 43-101 standards.

The Fosfatar Project is aiming the phosphate markets of the Para, Mato Grosso and Maranhao States, which are 3 of the most productive agricultural regions in Brazil. Para State is the largest palm oil producer in the country, producing approximately 160,000 tonnes of palm oil per year, with 118,000 hectares of cultivated area, and is also one of the largest beef producers. Mato Grosso State is the largest soybean, beef and cotton producer in Brazil, and Maranhao State is one of the country’s largest producers of soybean and rice. They import most of the fertilizers they consume. On the whole, Brazil imports about 90% of its potash and 50% of its phosphate needs; it accounts for 8% of the global phosphate demand and 7% of the global NPK demand.

The Sapucaia Target is an aluminous phosphate body measuring 690m N-S by 390m E-W, with ore layer true thickness ranging from 0.60m to 10.15m, averaging 5.42m, and P2O5 grades ranging from 8.22% to 25.48%. These results indicate the potential for Sapucaia to become one of the highest-grade phosphate mines in Brazil. The Sapucaia Resource Estimate is based on 1,263m of diamond drilling, distributed over 102 holes (46 historical holes) with an average depth of 12m, spaced over a 50m by 50m grid. Historical drill holes were validated by twinning a number of these holes, followed by re-logging, re-sampling and re-assaying.

The Boa Vista Target, located 2.1km away from the Sapucaia Target and with a similar mineralization, represents an additional feedstock for Sapucaia, thus adding to its mine life. Boa Vista’s phosphate body measures about 200m N-S by 150m E-W, with a mineralized layer ranging from 1.0m to 10.5m, and with P2O5 grades ranging from 2.23% to 25.10%. The Boa Vista Resource Estimate is based on 424m of diamond drilling, distributed over 26 diamond holes, with an average depth of 16m, in a 50m by 100m spaced grid.

Their study concludes that the aluminum phosphate will be easy to extract, with less than 500,000m3 of non-mineralized overburden and a low strip-ratio of no more than 0.6.

They expect to begin production next year, with a potential of 100,000 tpa and a targeted 10 year mine life.

Brazil is the main global producer of coffee, meat, orange juice, and sugar.

Argentina: Plans for Potash Production as By-Product of Lithium Operations

Canada-based Lithium Americas Corp. principal property consists of a portion of two adjacent Argentinean salt lakes, Cauchari and Olaroz (Jujuy province), covering 82,500 hectares in the Lithium Triangle region of South America. They are developing one of the world’s largest and lowest cost lithium operations. They plan to include potash production at their Cauchari-Olaroz Lithium Brine Project, potash output has been estimated to be two tonnes of potash per tonne of lithium carbonate. A Preliminary Economic Assessment filed by the Company in May 2011, completed by the independent engineering firm ARA WorleyParsons, identified annual lithium carbonate production of 40,000 tonnes – built in two equal phases of 20,000 tonnes per annum. As such, Lithium Americas is anticipating approximately 80,000 tonnes per year of potash production once both phases are complete. Potash salts have been sent to the Saskatchewan Research Council for metallurgical testing.

It has been indicated that Lithium Americas’ operating cost per tonne of lithium carbonate is US$1,434 (prior to expected potash by-product credit); this would make Lithium Americas the world’s lowest cost lithium producer.

India: Coromandel to Boost Production Capacity

Hyderabad-based Coromandel International Limited, India’s second largest phosphatic fertilizer player, is planning to invest over Rs 500 crore in the next couple of years to ramp up its production capacity to 4 million tonnes from the present 3.25 million tonnes. This includes a Rs 116 crore ertilizer 800-tonne per day SSP plant to be set up in Punjab.

Coromandel, which has some 17 per cent share in the Indian phosphate market, manufactures DAP and different NPK formulations, has joint ventures and long-term agreements for supply of raw material in several countries including South Africa, Israel, Tunisia, Togo, Japan and Canada. With some 17% of the world population, India is the second largest fertilizer consuming country with around 13 percent of world use.

The Murugappa group company was incorporated in 1961 and launched its operations in 1964 by starting its first fertilizer plant in Visakhapatnam. The group brought all its other subsidiaries in agriculture inputs business under the umbrella of Coromandel International subsequently. They finished last year with about US$ 3b turnover. In the 2010 Coromandel Fertilisers Ltd. was renamed to Coromandel International Ltd. and it operates in four segments: fertilizers, specialty nutrients, crop protection and retail. During the fiscal year ended March 31, 2011, Coromandel acquired Pasura Bio-Tech Private Limited.

Belgium: ICL completes ownership of Nutrisi

Israel Chemicals Ltd. (ICL), one of the world’s leading fertilizer and specialty chemical companies, bought out its partner in the Belgian fertilizer components maker Nutrisi Holdings, Santiago-based Sociedad Química y Minera de Chile SA (SQM). The two companies owned Nutrisi in equal shares. SQM, also known as Soquimich, Chile’s biggest fertilizer producer and exporter.

Nutrisi and Norway’s Yara International ASA own in equal shares NU3, the world’s largest manufacturer of soluble NPK. NU3 owns two large manufacturing plants in Belgium and southern Holland, and sells its products throughout Europe and other global markets.

ICL said that the acquisition is part of its strategy to become one of the world’s major global specialty fertilizer producers. The global specialty fertilizer market is growing by 5-8% a year, double the growth rate of conventional fertilizer markets. The deal follows earlier acquisitions this year by Israel Chemicals Everris (previously Scotts Global Pro) a multinational manufacturer and distributor of high-quality specialty fertilizers, including controlled-release, slow-release and soluble fertilizers; and Fuentes Fertilizantes, Spain’s largest manufacturer and distributor of soluble and liquid fertilizers, NPK components and conventional fertilizers. Israel Chemicals is also expanding soluble fertilizer production by its 50:50 Indian joint venture Zuari Rotem Specialty Fertilizers Ltd. Their partner, Zuari Industries, belongs to the Saroj Poddar-led Adventz group. Since March 2010, Zuari has been operating a soluble fertilizer plant with a production capacity of 32,000 tonnes a year. At present its total capacity to produce water soluble NPK speciality fertilizers is of 50,000 tpa. As a consequence of the growing adoption of advanced fertigation techniques (such as through drip irrigation systems) and foliar fertilization, India’s consumption of water-soluble speciality fertilizers is growing at 18-20 percent annually.

The global total specialty phosphates market was estimated at US$6 billion for 2009 sales with an estimated 2-3% annual growth rate.

China: Fertilizer Overuse Damages Agriculture and Environment

Chemical fertilizer use in China has increased by 225 percent since 1980, according to a survey by the Soil and Fertilizer Institute of the Chinese Academy of Agricultural Sciences (CAAS). The yield increased 40 percent during this period. With a population of 1.3 billion, China uses more fertilizer than any other country accounting for about 30 percent of the world consumption. The current annual consumption of fertilizer in China is more than 54 million tonnes-including nitrogenous, phosphate, and potash fertilizers, of which 33 million tonnes are nitrogenous fertilizer. Nitrogen fertilizer usage is 191 kg per hectare, 151% of the French consumption, 159% of the German one, and 329% of the USA consumption. But in spite of this vast consumption, the Chinese grain yield is some 10-30 percent lower than in those countries.

In China’s largest grain production province, Jilin, some farmers use the fertilizer for the entire season, in the planting season itself. The yearly grain yield of the Jilin province has increased from 10 billion kg to 25 billion kg in the past 30 years, but the use of fertilizer increased much more, from some 0.5 million tonnes in 1984, to approximately 5 million tonnes in 2010.

Excess fertilizer usage is causing pollution as it gets into the air and water of China, it is fostering eutrophication in the water bodies resulting in an excessive growth of algae, increasing pests, lowering the quality of fruits and vegetables, and deteriorating the soil quality. Ammonia discharges cause air pollution; the nitrous oxide released is a major greenhouse gas, with nearly 300 times more global warming potential than carbon dioxide.

China, has as much arable land as India, but the arable lands rendered unusable are more than 40 percent of the total arable landmass, as a result of soil erosion, depletion, alkalinity, and acidification. The polluted cultivated lands are 10 million hectares and arable lands of poor quality with low yield are 67% of the cultivated lands. A recent survey on 10 provinces showed that the soil organic matter has been reduced in 35 percent, compared to that in the early 1990s.

USA: Innophos Holdings Announced the Acquisition of Kelatron

New Jersey-based Innophos Holdings, Inc., the leading North American producer of specialty phosphate products for the food, beverage, pharmaceutical, oral care and industrial end markets, announced that it had acquired the Kelatron Corporation. Specialty phosphates acts as flavor enhancers in beverages, electrolytes in sports drinks, texture additives in cheeses, leavening agents in baked goods, calcium and phosphorus sources for nutritional supplements, pharmaceutical excipients and cleaning agents in toothpaste.

Kelatron Corporation, based in Ogden, Utah, is a leading manufacturer of bioactive mineral nutrients. For over 30 years, the company has been a key supplier of specialty minerals and custom blends to manufacturers of nutritional and dietary supplements. Recent investments by Kelatron in upgrading manufacturing facilities and introducing a new line of premium minerals have positioned the company well for future growth. The combination of Kelatron’s micronutrient range of products with the macronutrients of calcium, magnesium, potassium and phosphorus currently manufactured by Innophos is expected to significantly strengthen Innophos’ offering to its food, beverage and dietary supplement customers.

Kelatron has a strong position in an attractive, growing, nutraceutical market and has significant manufacturing and technical capability. The combination of Innophos’ strong worldwide customer relationships within the food, beverage and pharmaceutical industries and Kelatron’s expertise in the high value, high growth rate, mineral fortification market is expected to bring significant benefits to both companies.

Innophos was previously part of Rhodia and since 2004 is controlled by Bain Capital and it employs some 1,000 people worldwide. Last year their assets were of US$627 million and their revenues US$714 million. Speciality ingredients accounted for 64% of their revenues, food and technical grade phosphoric acid 15%, STPP and detergent grade phosphoric acid 11%, and granulated TSP and other fertilizers 10%. Due to the environment concerns, the STPP market is now much smaller and a further decline is expected. In the last years they doubled their food grade phosacid capacity at Coatzacoalcos, Mexico.

Algeria: Dissolution of Kimial

Kimial, the partnership between Asmidal (45%) and the Tunisian group Alkimia, has lost far more than three quarters of its capital. Therefore, the extraordinary general meeting hold last September decided the early dissolution of the company by appointing a liquidator for the purpose of Algeria to support the liquidation. In its initial configuration, the project involved a “revamping” of the old unit, but the new regulations on the Algerian earthquake standards was established to evaluate the project to build a new plant composed of two sections with their auxiliaries. In this regard, the start of the plant could not be made ​​until July 2009. Because of this delay of 18 months, the company has gone through an acute financial crisis exacerbated by an unfavorable market conditions as well as the non-use of STPP by Henkel, the largest producer of detergents in Algeria. Another factor was the increase of phosphoric acid prices. According to  Mhiri Ali, CEO of Alkimia, the losses from their investments in Algeria are estimated in nine million dinars.

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