IM Agriminerals News in Brief 21 – 27 November

By Myles McCormick
Published: Friday, 27 November 2015

Saudi-Bangladeshi deal to set up 750,000 tpa phosphate plant in Dhaka; ICL cautious on Sheshinski legislation; PhosAgro to reduce phosphate production following delayed raw material deliveries

A joint venture (JV) 750,000 tpa diammonium phosphate (DAP) plant is to be set up in Dhaka, the capital of Bangladesh, with the support of the governments of Bangladesh and Saudi Arabia, according to reports by Arab News.

The private sector-led venture has been agreed between the finance ministers of the two countries, Abul Maal A Muhith of Bangladesh and Ibrahim Al-Assaf of Saudi Arabia.

The announcement came during talks between the two countries, aimed at intensifying cooperation in the fields of trade and investment.

Israel Chemicals Ltd(ICL) noted that Israel’s Knesset had approved the Taxation of Profits from Natural Resources legislation, implementing the conclusions of the Sheshinski Committee II.

It said that the net impact of the legislation on its annual profits in the coming years would be "significantly dependent" on the prices of potash over the period.

"The legislation is expected to apply to all minerals other than potash as of 2016 and to apply to potash as well as of 2017," ICL stated.

Separately, ICL noted that its Spanish subsidiary, ICL Iberia, had signed a cooperation agreement with the Government of Catalonia to ensure the continuation of ICL Iberia’s potash mining activities in the Bages Region of Catalonia.

In the UK, ICL will cut a number of jobs at its Boulby plant in Cleveland.

Reports by the Northern Echo indicated that the workforce of the "manual" team could be reduced by 20% to 361, with 68 jobs to be cut from the technical workforce, a 25% cut in management numbers to 124 and 11 job office job losses.

An ICL spokesperson said that decisions regarding staffing levels were yet to be finalised. The Unite labour union has said it will fight to retain jobs at the company.

London-listed Russian fertiliser producer PhosAgro OAO said that it had been forced to partially suspend production at its Balakovo plant, due to undelivered raw materials from supplier, Gaxprom Sulphur.

The company said that the gradual suspension of sulphuric acid production at the plant, which mainly supplies the Russian market, may cause a decrease in December production volumes of phosphate-based fertilisers of 72,000 tonnes.

ASX-listed Rewards Minerals Ltd said that recent drilling at its LD project in Western Australia (WA) had increased the its mineral resource estimate to 564m tonnes sulphate of potash (SOP) contained in brine grading 13.7kg per square metre.

Michael Ruane, managing director of Rewards, said that the company is "in the process of defining the extractability parameters of the mineral resource brine and will provide results from on lake pumping trials shortly".

"Overall, this mineral reserve confirms the significance of the LD basin as a potentially viable source for a long life SOP operation," he added.

Fellow ASX-listed Minemakers Ltd, a phosphate producer, has changed its name to Avenira Ltd, following approval at its annual general meeting.

Cliff Lawrenson, the company’s managing director said that it had "undergone a significant transformation over the past 12 months", adding that it was "delighted to commence the development [its] flagship Baobab Project under the new Avenira banner". Its ASX ticker has now been changed to AEV.

Korab Resources Ltd, also listed on the ASX, has signed a heads of agreement for the offtake of 250,000 tonnes phosphate rock with DPA Oceania Pty Ltd from its Geolsec phosphate operations in Australia’s Northern Territory.

The deal is to consist of 50,000 tpa over a five year period, with the option to extend.

It also confirms Oceania’s interest in acquiring an equity stake in Geolsoc Phosphate Operations Pty Ltd, a subsidiary of Korab, for Australian dollar (A$) 4m ($2.89m*) and in assisting in the development of the quarry.

ASX-listed Elemental Minerals Ltd has received a non-binding proposal from SUMMIT Private Equity providing for SUMMIT to invest $40m in the company at A$0.20/share.

The deal is subject to a number of conditions including due diligence, documentation and internal approvals and is intended to ensure Elemental is sufficiently funded through to the commencement of the construction of its Kola Sylvinite1 potash project in the Republic of Congo.

Belarusian Potash Corp. and CNAMPGC Holding Co., a Chinese fertiliser producer, have signed a memorandum of association up to 2020, according to Belarus News.

The deal follows the site visit of a Chinese delegation to Belarus. Under the memorandum, the two companies will aim to "strengthen economic cooperation".

CNAMPGC is already one of the largest importers of Belarusian potash globally.

Potash Corp. of Saskatchewan Inc. (PotashCorp) will deal with struggling world markets by becoming more efficient, but will not cut jobs, its CEO Jochen Tilk has said.

Tilk told the Saskatoon Chamber of Commerce that crop prices have experienced double-digit percentage declines over the past year.

He added that, in order to remain competitive, the company will reduce costs and increase production.

Canadian potash trader Canpotex Ltd is to decide late next year where to expand its west coast terminal capacity, a move which it hopes will give it a faster route to Chinese buyers, its CEO, Ken Seitz told news site Canadian Cattleman.

The company’s options include building a Candian dollar (C$) 775m ($583m) terminal at Prince Rupert, British Columbia, which would allow it to bypass Port Metro Vancouver and cut shipping times to China by two days, Seitz said.

Canpotex, is owned jointly by miners PotashCorp, Mosaic Co. and Agrium.

Phosphate production in Senegal increased 16.4% in the first nine months of 2015, according to the Directorate of Forecast and Economic Studies, in a report by Star Africa.

Production increased from 729,700 tonnes in 2014 to 849,300 tonnes in 2015, an increase attributed mainly to the production of calcium phosphates which stands at 714,900 tonnes, 21.1% above 2014 figures.

Elsewhere, the Jordan Phosphate Mines Co. (JPMC) plans to build a fertiliser plant in Indonesia as part of its expansion and marketing strategy, the Jordan Times reported.

Along with the Indonesian government, JPMC has registered a JV company called Petro Kaltim Abadi to establish a factory in the Pantang.

The project is the company’s second investment in Indonesia following the Petro Jordan Abadi fertiliser factory in Gersik city, East Java province, which was brought into operation last year.

Finally, Maaden Phosphate Co. has received commitments from a number of local and international lenders to replace its existing debt.

A new loan of $3.07bn has been agreed on "more favourable terms" than previous debt. The company expects to sign definitive financing agreements by the end of the year.

Maaden Phosphate is owned 70% by Saudi Arabia’s Maaden and 30% by Saudi Basic Industries Corp. 

*Conversions made November 2015



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