Dam burst at Vale, BHP mine devastates Brazilian town

Nov 5 (Reuters) - A dam holding back waste water from an iron ore mine in Brazil that is owned by Vale and BHP Billiton burst on Thursday, devastating a nearby town with mudslides and leaving officials in the remote region scrambling to assess casualties.

The mining company Samarco, a joint venture between top iron ore miners Brazil's Vale and Australia's BHP, said in a statement it had not yet determined why the dam burst or the extent of the disaster at its Germano mine near the town of Mariana in Minas Gerais, south eastern Brazil.

Civil defense authorities in Mariana said they were evacuating about 600 people to higher ground from the village of Bento Rodrigues, where television footage showed dozens of homes destroyed by the mudslide. A car rested on top of a wall where the roof of a building had been ripped off.

They said the flood had also reached another village further down the hill, called Paracatú de Baixo, and that inhabitants there were being evacuated.

The dam was holding tailings, a mining waste product of metal filings, water and occasionally chemicals. It was located near the Gualaxo do Norte river, adding to fears of potential water contamination.

The G1 news service of the Globo Media group reported that between 15 and 16 people died and 45 others were missing, citing the local union.

Civil defense authorities could not confirm casualties and said numbers reported in Brazilian media were speculative. A city hall official confirmed one death and 16 injuries, adding that dozens more were missing.

At a news conference in Melbourne, Australia, BHP Billiton's chief executive, Andrew Mackenzie, said a full assessment of casualties and damage was being hampered by darkness.

"Most of what happened there has been under the cloak of darkness," he told reporters. "At daybreak, clearly we will do an awful lot more and give you further updates."

Rescue crews continued to search the muddy waters after nightfall.

Brazilian army units nearby stood ready to help the search and rescue effort and the minister of national integration, Gilberto Occhi, planned to visit the state on Friday to provide assistance, according to a note from the presidency.

Miners are struggling amid a collapse in prices of iron ore and other commodities due to concerns about demand from China, the world's top consumer of industrial raw materials.

Samarco produces about 30 million tonnes per year of iron ore, just under 10 percent of Brazil's output. Iron ore is transported down a slurry pipe from Germano to Espirito Santo, where it is turned into pellets.

Vale has directed media questions to Samarco.

(Reporting by Anthony Boadle; Additional reporting by Raquel Stenzel and Natália Scalzaretto in Sao Paulo, Sonali Paul in Melbourne and James Regan in Sydney; Editing by Chris Reese, Tom Brown, Ken Wills and Ed Davies)

Indian 1H 2015 phosphoric acid price increase will do nothing to improve the bearish sentiment in the global fertiliser market.

Slow fertiliser demand from cautious farmers who are not seeing improvements in agricultural commodity prices is met with more than enough supply.

The 40 USD/tonne increase in the phosphoric acid price in India—from 765 USD/tonne to 805 USD/tonne P2O5—was larger than most analysts expected. The other two benchmark price increases of the past two weeks, the 1H 2015 Chinese potash price and the US Tampa April ammonia price had brought no great surprises.

Indian phosphate producers, who use ammonia and phosphoric acid to produce DAP, are believed to have accepted the higher than expected price increase following a bearish outlook for ammonia in the Eastern Hemisphere. Ammonia prices decreased with 6 percent in India last week and severe oversupply of ammonia in the Eastern Hemisphere will keep a strong lid on prices.

The arbitrage decisions of the Indian phosphate industry will help shape the short-term global market. Higher DAP prices resulting from greater DAP import volumes can strengthen the position of suppliers in the Americas. However, demand needs to increase significantly in these regions for any material impact on prices to become feasible.

The market is also hoping for India to take up substantial volumes of the urea that is entering the market. A purchase tender has not yet been announced. Delaying the tender for as long as possible will help India achieve a lower price as long as the floor in the urea market is not reached. A urea floor price is estimated to be another USD 10 to USD 20/tonne lower than current FOB export prices in China and Ukraine—the marginal cost producers. Evidence of Chinese aspirations for the urea export market surfaced last week when Chinese export statistics showed all-time high export volumes of almost 1.3 million tonnes in February.

Analysis by Viktor Ikeda, a new member of our Global Farm Inputs team, shows that Brazilian farmers joining their colleagues in Europe and the US in cautious fertiliser application looks likely. This caution is due to the margin pressure resulting from lower agricultural commodity prices and currency headwinds. And with the main driver of global fertiliser demand shifting into a lower gear, global fertiliser markets remain strong buyer markets.

Source: https://far.rabobank.com/en/sectors/farm-inputs/Weekly-Fertiliser-Update-Week-14.html

Purified Phosphoric Acid - Production Capacity - 2015

Approximate capacities (k tons.of P2O5 per year)

Group                     Locations                                                                 Capacity

PCS                        Aurora - NC - USA                                                     300
Innophos                Geismar - LA - USA and Coatzacoalcos - Mexico     260
Prayon                    Puurs and Engis - Belgium                                         230
ICL                         Arad - Israel and Cajati - Brazil                                  220
Emaphos                 El Jadida - Morocco                                                   150
Wengfu                   Dazhou - Sichuan - China                                          100
Petrocentral             Gresik - Indonesia                                                       50
Dongbu                   Dongbu - South Korea                                                 50
Haifa                       Haifa - Israel                                                                30
GACL                     Vadodara - Gujarat - India                                           30
Crystalis                  Siilinjarvi - Finland                                                      30
AB Foods                Bandirma - Turkey                                                       20

Sources: "Phosphoric Acid - Rodney Gilmour" (foto) and personal research

The Colossus of Piaçaguera

Once upon a time it was a big country.
Full of farms.
Not well developed.
Its name was Brazil.
It was in need of fertilizers.
It still needs.
In the sixties Peri Igel of Ultra Group bring capital and technology.
To build the place where now I am working.
It was called ULTRAFÉRTIL!
At Cubatão, Plínio de Queiroz, at Raiz da Serra, going to the rail to Paranapiacaba.
The old Santos Jundiahy of the Britons.
Now an old lady.
Going to do half a century.
First of its class in South America!
Integrated: NH3, HNO3, Na NH4, H2SO4, H3PO4 and MAP!
It its still there.
Working, making profit.
Being innovative.
Using Bayóvar Rock for Phosphoric and SSP (at former IAP).
Now "small" before a giant as Uberaba´s former Fosfértil´s.
A complex is like a living being.
In our case an old behemot, now "smaller", but as respectable as ever!
I would like to congratule each one that has did that job done!

Against crisis Vale focuses R&D in productivity

Contra a crise, Vale foca pesquisa em produtividade

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Em tempos de orçamento enxuto e preço dos metais em baixa, a Vale aciona os cérebros a serviço de sua área de pesquisas para trabalhar em busca de maior produtividade. Em linguagem popular, o foco é fazer do limão uma limonada, isto é, ajudar a mineradora a extrair o maior valor das operações já existentes com o menor investimento possível. Em 2015, a mineradora destinará US$ 900 milhões do orçamento anual (US$ 9 bilhões) para pesquisa e desenvolvimento (P&D). Alguns projetos já estão sendo encaminhados às áreas de negócios, que batem o martelo para sua execução.

Nessa lista estão pesquisas nas minas de Onça Puma e Sossego, no Estado do Pará. O diretor de Exploração e Projetos Minerais da Vale, Marcio Godoy, conta que as sondagens ao redor de Onça Puma detectaram depósitos satélites de níquel com teores superiores aos já processados. A expectativa é que a Vale consiga elevar de 1,8% para 2% o teor do metal extraído, elevando seu valor de mercado.

No caso da operação de cobre de Sossego, em Carajás, a meta é estender a vida útil da mina. As atividades foram iniciadas em 2004 e, pelo projeto original, terminariam em 2015. Os estudos já estenderam a vida útil da unidade até 2024. A ideia é esticá-la por pelo menos mais uma década, estima Godoy. As pesquisas geológicas e estudos de processos que permitirão o aproveitamento de novos corpos de minério estão em conclusão e serão submetidos ao conselho da Vale.

"O segredo da mineração é conhecer bem a sua jazida para extrair o máximo de produto aplicando o mínimo de capital", diz Godoy. Nesse novo ciclo de baixa do minério de ferro e dos preços dos metais, a mineradora deslocou os esforços da pesquisa de projetos greenfield (iniciados do zero) para exploração brownfield (já existentes).

Nos dois casos acima as pesquisas foram realizadas pelo Centro de Desenvolvimento Mineral (CDM), em Santa Luzia, na Grande Belo Horizonte, primeiro centro de pesquisas da Vale, que completa agora 50 anos. Foi lá que a empresa desenvolveu a tecnologia para explorar os minérios de itabiritos quando suas reservas de hematita no Quadrilátero Ferrífero - minério mais puro, de alto teor de ferro - entraram em declínio nos anos 60. A criação do CDM ajudou a Vale a dar o primeiro salto tecnológico na mineração de ferro.

Bactérias

Além de aprimorar processos de produção já existentes, os pesquisadores da companhia também desenvolvem novas tecnologias. Desde sua criação, em 1965, o CDM obteve o registro de 450 patentes. Uma das novas apostas em inovação tecnológica é o uso industrial da biolixiviação, técnica que utiliza bactérias para estimular a extração de cobre contido em minérios que hoje não são processados por falta de uma rota economicamente viável.

A pesquisa da biolixiviação está em curso desde 2011 e já consumiu US$ 1,5 milhão. Inicialmente ela será aplicada a minérios oxidados encontrados na superfície do depósito de cobre de Sossego, mas pode ser base para a extração de níquel e fosfato, diz o engenheiro Felipe Hilário, coordenador do projeto.

Um dos objetivos é reduzir custos, já que o uso industrial das bactérias dispensa a construção de uma planta de ácido sulfúrico, estimada em 30% do capital investido na produção do cobre. O ácido libera o cobre de minerais associados. A ideia é misturar o enxofre ao minério e deixar as bactérias agirem como um catalisador do processo químico de produção do ácido sulfúrico. Os testes que darão dimensão da viabilidade industrial estão começando no CDM e devem levar quase um ano. "O que estamos fazendo é repetir um fenômeno que acontece na natureza em escala industrial", explica Hilário.

Os pesquisadores do CDM também reproduziram uma pequena planta para processar o minério de transição da mina de cobre de Salobo (PA). Lá são feitos testes para capturar o cobre de menor teor, por meio da alteração de reagentes. Com a flotação (separação de impurezas) a expectativa é levar esse mineral, que hoje não pode ser processado, de um teor de 1% para 39% de cobre. O processo também reduz a necessidade de lavrar mais minério. "É um apoio bem prático para melhorar a produtividade de uma operação", cita Godoy.

O diretor de Exploração e Projetos Minerais destaca que pesquisas na mesma linha estão sendo realizadas na área de fertilizantes, para viabilizar o aproveitamento de fosfato sem grandes investimentos em reforma de unidades como Araxá (MG) e Catalão (GO). Na mina de Bayovar, no Peru, há análises para a eliminação de matéria orgânica para permitir o uso do fosfato em plantas de ácido fosfórico no Brasil.

O CDM também pesquisa formas de viabilizar o aproveitamento das terras raras, um conjunto de 17 elementos usados na indústria de alta tecnologia e encontradas dentro das operações de fertilizantes. Embora sejam abundantes, ao contrário do que diz o nome, as terras raras são de difícil extração.

Potash Offer For K+S A Sign Of Weakness

By Tim Maverick
On June 26, the Potash Corporation of Saskatchewan (NYSE:POT) revealed an $8-billion offer for Germany's K+S AG (OTCQX:KPLUY, OTCPK:KPLUF).
The deal, if it happens, would be the first major deal in the potash sector since 2011.
The market for potash, a key fertilizer ingredient, has been in the doldrums since 2013. That's when one of the two global potash cartels - the Belarusian Potash Company - broke up. Uralkali left, leaving only its partner Belaruskali.
That breakup led to falling potash prices, as competition between the global producers began to heat up. Although prices have since stabilized, they still hover near five-year lows.
The freer market and resulting prices didn't please the North American Canpotex potash cartel, forcing it to operate well below capacity. This cartel is headed by Potash Corp., and also includes Mosaic (NYSE:MOS) and Agrium, Inc. (NYSE:AGU).
This brings us to the proposed takeover of K+S by Potash Corp.

No Deal Logic

Many analysts have questioned the logic of Potash Corp.'s offer for K+S. After all, why would a low-cost producer want to buy one of the highest producers of potash?
On the surface, this deal makes no sense.
K+S's production costs are around $230 per metric ton, thanks to its aging mines. Meanwhile, Potash Corp.'s costs are at only $95 per metric ton this year.
But dig a little deeper, and the reason is obvious.
Potash Corp. is after the Legacy mine, owned by K+S, right next door to some of its mines in Saskatchewan.

Legacy Project

You see, K+S has sunk about $2.2 billion into Legacy, which is scheduled to come on-line in 2016. Legacy is similar in size to Potash Corp.'s current mines, with a capacity to eventually produce roughly three million metric tons of potash annually.
An important fact to note is that K+S has already said it would not join the Canpotex cartel. It would, like most producers globally, sell its output on the open market.
Analysts at the investment bank Liberum told the Financial Times that Legacy "poses a disruptive risk to industry pricing discipline." One can almost see the panic in the Potash Corp. executive suite's faces, as more potash production is set to hit an already weak market next year.
Despite denials from Potash Corp., if successful in its bid, the company would likely shutter Legacy to keep prices higher than they otherwise would be.

Piles of Po

Even if Potash manages to grab hold of the Legacy mine, it doesn't mean its troubles are over. You see, mining giant BHP Billiton (NYSE:BHP) has an even bigger potash project in the works.
The Jansen project, also in Saskatchewan, will be a mega mine if BHP decides to go ahead with it. It would be the world's largest potash mine, with a capacity of eight million metric tons annually.
And BHP has no interest whatsoever in joining the Canpotex cartel.
The only hope Potash Corp. has is that in this age of retrenchment by the big miners, BHP decides to put the project on hold.
The bottom line here is that Potash Corp., with whatever maneuvers it tries to make, is working from a position of weakness, not strength. The market looks to be oversupplied for years to come.

MbAC in legal hot water

TORONTO (miningweekly.com) – Brazil-focused project developer MBAC Fertilizer on Monday reported that subsidiary Itafós Mineracão was facing two lawsuits that could derail progress made with the company’s strategic review process. The TSX-listed company said that it was defending itself against claims laid by the Brazilian Labour Public Ministry and the Arraias City Hall against certain of the company’s assets in the country. MBAC was challenging certain rulings rendered thus far and said that protocols for the rehiring of employees would be followed once the strategic review process was complete. The company and its lenders were currently evaluating proposals and defining next steps after it placed its flagship Itafós Arraias operation on care and maintenance earlier this year and offered employees severance packages. The chosen proposal was expected to address MBAC's liquidity shortcomings and the lawsuits, and result in operations at its Itafós Arraias project restarting. MBAC was undertaking a strategic process in collaboration with its senior lenders. Options under consideration included securing a strategic partner, the sale of the company or its assets as well as other potential value-maximising transactions. The first lawsuit related to a combination of a class action and individual claims from former employees for severance payments stemming from the company's cost-cutting restructuring initiative. The total value claimed amounted to about $13.1-million, which included the original outstanding severance amount of about $1.6-million and damages of about $11.5-million. MBAC said that it had already settled 120 individual claims heard to date using a working capital facility of $400 000 obtained from one of its senior lenders for this purpose. Once all individual claims had been settled, MBAC expected to be able to significantly reduce the total amount of penalties and damages that were being claimed. A labour judge of the State of Tocantins had placed certain of the company's fixed and non-fixed assets valued at $2.7-million in escrow to cover payments related to the claims and had ruled that the assets be sold in an auction at the end of the month. These assets, however, were pledged to Itafós' lenders as part of the security package under the company's project loan financing. As a result, the lenders were working to stop the auction, MBAC said. The second lawsuit related to a notification received on June 10 of a tax claim from the Arraias City Hall relating to municipal services taxes (ISS). The claim stated that the ISS associated with all services rendered to Itafós should be remitted to the City of Arraias regardless of whether the services were rendered locally or remotely. The total ISS amount being claimed was about $1.9-million, as well as penalties and interest of $1.6-million for a total of $3.5-million. The company believed that it had remitted ISS correctly in