Ma´aden awards $2.25 bln of work on phosphate project

Dec 23 (Reuters) - Saudi Arabian Mining Company (Ma'aden) has awarded three contracts worth a combined 8.46 billion riyals ($2.26 billion) to Canadian and Asian companies concerning its new phosphate mining and production project, it said on Monday. The project in Waad al-Shimal City in the north of the country is a joint venture between Ma'aden, Saudi Basic Industries Corp and Mosaic. Canada's SNC Lavalin and China's Sinopec Engineering Group have won a 2.86 billion-riyal deal to build a power plant and a sulphuric acid plant which has a production capacity of 4.9 million tonnes, Ma'aden said in a bourse filing. South Korea's Hanwha Engineering & Construction Co won a contract to build a phosphoric acid plant worth 3.5 billion riyals. The plant will have a production capacity of 1.5 million tonnes. China Huanqiu Contracting & Engineering Corp Co won a contract to build an ore beneficiation plant worth 2.08 billion riyals with a production capacity of 5.3 million tonnes. The projects are due to be completed in 2016, Ma'aden said. Ma'aden aims to close fundraising for its $7 billion phosphate project before the end of the year, a timetable reiterated in Monday's statement.

Doyle leaves legacy of discipline at PCS (from Argus Media)

Houston, 14 April (Argus) — The world’s largest potash producer by capacity has tapped a new chief executive with no fertilizer experience to replace a man whose name is synonymous with the word ‘potash’ and conservative supply-side strategy. Bill Doyle is stepping down as the head of PotashCorp (PCS), with Jochen Tilk named as his replacement effective 1 July. Doyle announced his resignation last week, having led the company for 15 years through prosperous and tumultuous times. Doyle leaves a legacy of strategic producer tactics, matching supply to demand to support potash prices. Doyle’s adherence to a price-over-volume marketing strategy brought needed orderliness to the market, according to industry sources. “Bill really ushered in a form of supply and demand discipline to the industry, something it had very little of,” American Plant Food vice president of sales Toby Hlavinka said. “He [dragged] the industry with him, some kicking and screaming. I think everybody in this industry is better off because Bill Doyle was in it.” Doyle, who has been at PCS for 27 years, oversaw significant price volatility for a crop nutrient that had historically seen relatively stable and low prices. “He was such a huge figure in this world,” Ameropa managing director Nick Adamchak said. “Bill was the consummate marketing guy.” From 1999 when Doyle was named chief executive through 2006, the average midpoint standard muriate of potash (MOP) price was $135/tonne (t) fob Vancouver, topping out at $183/t in February 2006. A major price run-up began in 2007, spurred by record demand from China (9.4mn tonnes) and the asset bubble ahead of the 2008 financial crisis. Standard MOP prices reached as high as $875/t fob Vancouver by the end of 2008. By September 2009, prices tumbled by nearly half to $473/t as a result of the financial crisis. PCS reacted by significantly cutting back potash production, producing 3.1mn tonnes of MOP in 2009, down from 7.5mn tonnes the previous year. Potash prices fell further to the $340s/t fob Vancouver by 2010, the same year that Australian mining giant BHP Billiton made a $40bn hostile takeover bid for PCS. Doyle, with support of the Canadian government, successfully fought off the bid, which BHP Billiton withdrew in November 2010. MOP prices recovered in 2011, with the average price holding at $483/t fob Vancouver from July 2011-April 2012. Since then, prices have steadily declined because of global oversupply and anemic demand. The unexpected breakup of the exporting arrangement between Russia’s Uralkali and Belarus’ Belaruskali in July 2013 added considerable market uncertainty. Uralkali, one of PCS’ chief competitors, switched to a volume-over-price marketing strategy, increasing supply and further depressing prices, which reached a low of $293/t fob Vancouver in February 2014. The move challenged Doyle’s long-held marketing philosophy. He publicly called the event “the single dumbest thing that I’ve ever seen.” With supply high and prices low, PCS again adjusted its operations in response. It cut its production rates to 58pc of capacity and laid off 18pc of its workforce—1,045 employees—in December 2013, citing price declines and weaker-than-expected demand. PCS produced 7.8mn tonnes of MOP in 2013, up 1mn tonnes from 2012 but down by 500,000 tonnes from 2011.