Fertilisers: Facing the future

The world’s population is growing, getting richer and increasingly opting for meat-rich diets – factors which are pushing up demand for fertilisers. While this worn cliché, trotted out by many in the agriminerals industry, has its basis in truth, in reality, these variables are not new and have long been factored into the business plans of the industry’s majors.

Enthusiastic gesturing towards demographics and shifting preferences therefore mean relatively little for the sector’s bottom line.

Steve Hansen at investment firm Raymond James recently told the UK’s Financial Times that "global fertiliser fundamentals remain broadly anaemic, with few encouraging pricing signals".

Speaking about the crop nutrients, potash, phosphate and nitrogen, Canada-based Potash Corp. of Saskatchewan Inc. (PotashCorp) said in its full year 2015 results, released in late January, that it retains a "cautious outlook" for all three commodities. The company’s net profit fell by just over 51% year-on-year (y-o-y) in 2015, primarily owing to low market prices for the minerals it produces. Other producers look set to report annual earnings outlining similar trends.

Market analysis firm Integer Research was slightly less pessimistic than some in its most recent fertiliser market summaries, noting that in potash, demand actually remained firm y-o-y at 59m tonnes muriate of potash (MOP) last year, according to its estimates. Prices, however, continued at their lowest levels for around a decade.

Describing phosphate buying from key markets as "disappointing", particularly for India, Integer said that stocks were full in 2015 from earlier buying, totalling around 1m tonnes by October, pulling down demand.

Citrus fruit affected by greening disease.  US Department of Agriculture, via Flickr

Supply reform

Despite subdued demand, supply control measures that are expected to have a positive effect on the market balance are finally being put in place by the industry. The Investec "mining clock", which describes the various events that occur during a boom and bust cycle, notes that dividend cuts are key to realignment and deleveraging in the mining industry. 

PotashCorp’s latest earnings release informed investors that it would slash its dividend payments by 34% to Canadian dollar (C$) $0.25/share ($0.18/share*), an announcement made all the more significant because this is the first time PotashCorp has cut its dividend in 27 years as a publicly listed entity.

More recently, the company mothballed its Picadilly potash mine in New Brunswick after only around a year of active production, resulting in the loss of 420 jobs and suspending 1.8m tonnes of production capacity, saving PotashCorp around C$50m in 2016 capex costs and C$135m across 2017 and 2018.

Adult Asian citrus psyllid, Diaphorina citri, (2-3 millimeters long) on a young citrus leaf.    David Hall, US Department of Agriculture

"This announcement highlights the pain being felt in the potash sector globally," Investec said at the time, adding that it seems very unlikely that Anglo-Australian mining giant BHP Billiton will bring its large-scale Jansen project in Saskatchewan online any time in the foreseeable future.

Production cuts are also being pursued elsewhere. One year on from the flooding and consequent suspension of leading supplier Uralkali OAO’s Solikamsk II mine in Russia, a closure which knocked out a fifth of the company’s potash capacity but had no effect on global prices, Uralkali has made no attempt to salvage the operation.

In the last quarter of 2015, US-based Mosaic Co. axed 46 staff its Colonsay, Saskatchewan mine and extended planned maintenance work downtime, keeping supply offline. Its phosphate segment is also running at well below capacity.

Tel-Aviv-headquartered Israel Chemicals Ltd (ICL) said in its full year 2015 earnings statement in February that it anticipated a more balanced potash market in the second half of this year, based on production cuts from major companies. The Israeli company did not make any firm commitments to reduce its own output, but did say that it plans to transition from the production of potash to polysulphate at its Cleveland operation in the UK – a shift that will see the loss of 330 jobs.

EuroChem’s Kovdorskiy mine and processing facility in the Kola peninsula, Russia.   James Sean Dickson, via Flickr

Bitter lemons

While the bulk commodities market is suffering, there is no shortage of strategies for ensuring continued strong business performance among the world’s fertiliser mineral producers – most of which have been through punishing industry cycles in the past.

One approach is identifying smaller, higher growth markets and targeting them with new products. HJ Baker & Bro. Inc.’s subsidiary, Tiger-Sul, recently released its Tiger Greening Guard-branded fertiliser – a blend aimed solely at the citrus fruit industry.

According to the US Department of Agriculture, US orange production, traditionally associated with the state of Florida, is forecast to be 4.8m tonnes for the 2015/2016 season, down nearly half on the 8.1m tonnes produced in the 2010/2011 season, thanks to a combination of adverse growing conditions.

HJ Baker’s Greening Guard fertiliser, introduced in November 2015, is specifically targeted at farmers affected by citrus greening disease, a bacterial infection spread by several species of the psyllid insect and one of the chief causes of the drop in crop tonnages. As well as giving fruit a green hue, as the name suggests, citrus greening, which is also known as Yellow Dragon Disease, can result in defoliation, stunted growth, plant death and bitter flavoured, irregularly shaped fruits that drop off the tree early, according to the US’ Food and Fertilizer Technology Center.

Pesticides can be used to control psyllid populations, but according to Usman Khalid, marketing manager at HJ Baker, Greening Guard is one of the best performing and cost-effective options for counteracting the disease.

The sulphur-heavy (64% sulphur, 3% iron, 7% manganese and 7% zinc) blend "limits tree vulnerability by boosting and strengthening the tree’s immune system", Khalid told IM. "It also increases feeder root density for optimal nutrient uptake, which allows for healthier fruit and reduced fruit drop," he said. HJ Baker noted last year that citrus greening can reduce root functionality by as much as 50-80%.

Khalid added that the product reduces stress on the plant by lowering the surrounding soil pH and that Greening Guard’s controlled release property optimises uptake by delivering nutrients over time, rather than in a burst upon application. 

The company sees its key markets for Greening Guard as Florida (which is currently the biggest consumer) and California, which together account for the vast majority of the citrus crop acreage of the US, in addition to smaller opportunities in Texas and Arizona. "We are also targeting several global markets where citrus greening is a major problem," Khalid added.

As part of its effort to sharpen its strategy, Khalid said that Tiger-Sul is continuously investing in R&D and improving product formulation with modified ingredients to target the various issues facing the agriculture industry. 

Products for effectively delivering micronutrients to crops are seen as a significant opportunity for companies in the fertiliser industry. ArrMaz Custom Chemicals Inc., a supplier of processing solutions to a variety of mining and industrial minerals companies, told IM that the addition of micronutrients to bulk phosphate fertiliser as a value enhancer is a recent trend.

The company notes that this can make granulation more difficult, however, requiring process additives such blending agents, granulation aids, dust controllers and anti-caking coatings.

Particle segregation is also less easy following micronutrient loading, because the different particle sizes, densities and shapes affect the even application of a fertiliser mixture, owing to the tendency of non-uniform particles to differentiate during transit and storage. According to ArrMaz, its Microstickers-branded product can stabilise stored fertilisers for up to 90 days.

Optimisation

Another business strategy in the tough bulk fertiliser market is optimisation. This can stretch through from mining to beneficiation processes, to yield higher value products and reduce costs.

ArrMaz told IM that, in the case of phosphate, higher grades and recovery rates result in cost advantages across the processing chain, in addition to a number of tangible environmental benefits.

Obtaining higher grades and recovery result in smaller areas of mining, lowering permitting and land retention costs. Mine reserves last longer, taxes can become less punitive and shipping costs can be reduced, ArrMaz said. For phosphate, as with many other minerals, higher grade feedstock can open up more processing routes towards more valuable end products, such as phosphoric acid.

Zug, Switzerland-headquartered EuroChem AG told IM: "All coefficients and ratios – such as output, acid concentration (which is key to ensure final product quality), raw material consumption rates, energy consumption and other vital parts of the production process – to a large extent depend on phosphate rock quality."

This can be defined by the phosphate (P₂O₅)/calcium oxide (CaO) ratio and the impurity content of the rock, where impurities include: aluminium (Al₂O₃), iron (Fe₂O₃), magnesium (MgO), fluorine (F), silicon (Si), sodium (Na), potassium (K) and assorted organic compounds.

Excess silicon, for example, will result in abrasion and erosion in the processing plant, reducing its lifespan and filtering efficiency while increasing waste volumes. Carbonate, meanwhile, can result in higher required sulphuric acid and defoaming reagent volumes, according to ArrMaz.

EuroChem said that the normal approach is to qualify phosphate rock raw material according to its minor element ratio (MER) coefficient, where MER = ((Al₂O₃ + Fe₂O₃ + MgO)/P₂O₅). As a general rule, production processes can be worthwhile and economically viable if the MER indicator ratio remains lower than 0.12.

Kovdorskiy, EuroChem’s iron ore-apatite phosphate mine in the Kola peninsula, northwest Russia, produces phosphate feedstock with a MER of 0.05-0.08; while at the recently opened Kok-Jon phosphate mine in the Jambyl region of Kazakhstan, the MER ratio ranges from 0.09-0.1, EuroChem told IM.

Todd Parker, industrial marketing manager at ArrMaz, listed the 10 most important rules that must be followed in a beneficiation plant to result in higher quality end products at minimal expense, as:

1 Avoid ore dilution – keep the feed clean of overburden and other contamination

2 Liberate the feed as needed, creating as few fines as possible

3 Wash the ore and remove clays

4 Size the feed well for floatation sections or equipment

5 Float similarly sized feeds together

6 Use the cleanest water for conditioning and floatation

7 Condition feed at the right solids and at the right pH

8 Use the right amount of reagents, water and air

9 Employ smooth, non-turbulent floatation

10 Feed the plant at stable rates 

"These rules may seem rudimentary in nature but often getting back to the basics of mineral processing will help improve grade and recovery, which is generally a balancing act – improving one is usually achieved at the detriment of the other," Parker told IM.

ArrMaz process consultation – examining froth characteristics for maximum recovery and grade. (Source: ArrMaz)

Balancing act

At its Kovdorskiy mine, EuroChem explained that while reducing the Mg content of the feedstock is a requirement, as its presence lowers slurry velocities and thus reduces filtering ability, Mg also adds value to the end product as a key micronutrient.

He also noted the difficulty of shifting a plant’s feedstock from one source of phosphate rock to another – or, as is the case at EuroChem’s Belorechenskie Minudobrenia (BMU) plant in southern Russia, having two separate phosphate feedstocks. 

"To feed our fertiliser operations there, we use both apatite concentrate from Kovdorskiy and a fine rock phosphate flour imported from Kazakhstan. While changing phosphate rock sources can be challenging, due to equipment configuration and calibration, the results of exhaustive testing and the use of the first rock shipments as feedstock have generated positive results with a quality fertiliser product," EuroChem said.

Different sources of rock, divergent flowsheets and various reagents must also be balanced against each other to yield the best end products.

"While there is no universal reagent scheme and flowsheet design, each directly influences the other. Therefore operations designed with a marriage of flowsheet, equipment selection and reagent formulation creates the best value for the miner," ArrMaz’s Parker said.

ArrMaz told IM that it develops reagent schemes and flowsheet designs for customer-specific phosphate ores to recover greater volumes of higher grade phosphate, while consuming less energy and fewer resources.

"We provide a complete technical service package that includes laboratory evaluations of flowsheets and reagents as well as process consultations on existing operations and custom formulated reagents to improve recovery and grade for phosphate processing operations," the company said.

One key factor in processing is the recovery of fine fractions. According to ArrMaz, this can both significantly improve operational economies and reduce the need for clay and tailings facilities.

"However, handling and recovering finer phosphate fractions can create a balancing act between overall recovery and conditioning/flotation efficiency," ArrMaz said. "Often, clays interfere with the flotation process, driving costs up and challenging the recovery of other size fractions. In this case, reagent selection is key."

The company markets its CustoFloat and CustAmine reagents for this purpose, both of which were formulated to handle clays and multiple-sized feed fractions. 

"These reagents have recently found success for carbonate and silica rejection in clay-laden feeds, while maximising grade and recovery," ArrMaz said.

Phosphate fertiliser granules improved through anti-caking test runs and the addition of specific coatings and colourings. (Source: ArrMaz)

Granular approach

Phosphoric acid is itself still a feedstock, largely for diammonium phosphate (DAP) and monoammonium phosphate (MAP) production.

EuroChem told IM that product consistency is especially important for phosphate products over other fertilisers because their markets demand specific characteristics, including granule size and colour.

"All of our plants, whether at BMU, Kingisepp, or Lifosa, have undergone and benefit from investments targeting the stabilisation of product granulometry and the physical and mechanical properties of the product," EuroChem said. "Ongoing investments are being made to enhance granulation with various surface treatments such as conditioning additives, anti-caking material and so on."

At EuroChem’s Nevinnomysskiy Azot facility, the company has recently introduced several new nitrogen-phosphorus-potassium (NPK) formulae (19:4:19, 15:24:16 and 10:26:26). These were rolled out together with additional granulometry stabilisation measures to improve overall product quality, EuroChem said.

"More importantly, the equipment upgrades now ensure a maximum conversion rate for potassium chloride and ammonium nitrate, which makes for non-caking mechanically stable products, meaning a more consistent and reliable product for the farmers," the company added. 

Granulation is improved by having a purer phosphoric acid feedstock, according to ArrMaz, yielding not just higher grades, but also a greater hardness and more consistent size and solubility properties.

"The goal is to make the strongest and most uniform size granule, while meeting all analytical requirements without over formulation," ArrMaz said. "The lower the phosphoric acid impurities the easier it is to make consistent phosphoric acid and as the granulation plant is fed consistent, high grade acid, the better the granulator runs. The better the granulator runs, the higher the production without the need to recycle off-spec granules."

Higher quality granules are easier to store, handle and ship, the company added.

A large farm in northwest Minnesota, US, pictured in false colours (left) and natural colours using only a visible spectrum signal (right). Crop foliage, which strongly reflects near-infrared light, is seen as a bright red in the left image, with darker patches likely caused by healthy crops with dense leaf coverage, while yellow identifies infested crops and brown indicates unwanted pesticides landing on the farm’s organic crops.  (Source: NASA)

The sci-fi future of agriculture

Looking even further ahead, precision application of specific fertiliser blends directed by drone surveying could be one of the most important future developments in agriculture.

Drone technology has largely received attention for its potential as a tool for policing and spying, but opinion is growing in agricultural circles that unmanned aerial vehicles (UAVs) could play a role in the future of precision farming technology.

Khalid told IM that HJ Baker considers that UAVs could be used for scouting, video capturing and field surveys in agriculture, predicting that their use is set to "grow tremendously" in the coming years. EuroChem said that sensor drones "appear poised to play an increasingly crucial role in modern agriculture".

According to EuroChem, aerial support drones can help track and assess crop growth, reduce nutrient waste and increase yields – "representing another step towards sustainable farming".

Khalid agrees: "As production agriculture enters an era of uncertain commodity prices and profitability, precision agriculture will help the farmer apply products more efficiently."

While remote sensing by satellite has been used in agriculture for many years, both the spectral and spatial resolution of surveying can be increased by using near-surface drones, in addition to eliminating downtime caused by clouds.

"Remote sensing is already an established method of monitoring crop status. While satellite programmes, such as the European Earth observation programme, Copernicus (previously known as GMES), are in place, the drones provide for a far more flexible proposition," EuroChem said.

By using sensor data to identify where fertiliser has – and has not – been applied, in addition to assessing foliage density, farmers can adjust application rates to target areas showing deficiency in nutrient content and crop growth.

"Big data and aerial collection of data will be very critical," Khalid said. "Integration of UAVs and satellite imagery linked with yield monitors and field maps is where the industry will move."

Sensing the future 

The proliferation of drones in agriculture has grown as the technology has become more compact and manoeuvrable and less expensive.

The International Water Management Institute (IWMI) carried out UAV trials in Sri Lanka in September 2015. Using an eBee drone fixed with a near-infrared sensor, the IWMI recorded positive results that could ultimately see farmers fix nutrient supply problems before they affect crop growth.

"Using near-infrared, you can identify stress in a plant 10 days before it becomes visible to the eye," Salman Siddiqui, head of IWMI’s GIS remote sensing and data unit, told the UK’s Guardian newspaper. 

"When a plant goes into stress, it’s either due to a water or fertiliser shortage, or because it’s being attacked by a pest. Photosynthetic activity decreases and that affects the chlorophyll. That’s what the near-infrared sensor can detect, but our human eye can’t see it until it’s more advanced," he explained.

Siddiqui said that if a crop is being attacked by pests, UAVs can be used to spot this and prevent the pest spreading to affect a larger area – from farm to regional scale.

Meanwhile, in Uganda and Tanzania, the International Potato Center (CIP) has found that sweet potato crop acreages were being underestimated by around 50% in official statistics. On a small scale, this can impact local policy-making by reducing the availability of training, seeds and small-scale insurance agreements.

Charities, development agencies and the public sector – even local farming syndicates – could use drones in this context to advance agricultural development. "In developing countries, it’s still the case that farmers get together and share tractors, so this could be another area where they pool resources," Siddiqui said.

EuroChem suggested that, coupled with farmer feedback, drone-collected data could be harnessed to engineer new types of fertiliser products.

"While a few hurdles remain, including around privacy and data mining use – for example, who owns the data and what will it be used for – drones are increasingly likely to become part of the next global breakthrough in the quest to increase yields on ever decreasing arable land."

*Conversion made February 2016