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ICL Makes A Step Change In Its Global Phosphate Business By Forming A Strategic Alliance With China's Yunnan Yuntianhua

-- ICL to invest up to $500 million for 50% ownership of a joint venture that will operate a fully integrated, world-scale phosphate business in China and a 15% strategic holding in Yunnan Yuntianhua, Asia's leading producer of phosphate rock. The transaction will be cash EPS accretive for ICL from the first year, with an EV/EBITDA ratio of 7.4 based on second year projections ---- The joint venture will include a mine that produces ~2.5 million tonnes of phosphate rock annually for the next 30 years, a world scale downstream phosphate operation and a marketing and sales organization that primarily serves the Chinese and the Asian markets ---- The strategic alliance will leverage ICL's and Yunnan Yuntianhua's technical, marketing and production expertise and will include a joint phosphate R&D platform in the Yunnan province to develop process improvement and new products for both partners ---- ICL has identified significant expansion and synergy potential: the major thrust of the JV's strategy will be the transformation from a commodity fertilizer company to a specialty player in Agriculture, Food Ingredients and Engineered Materials ---- With this transaction, ICL continues to implement its "Next Step Forward" strategy: diversifying and upgrading its sources of raw materials in line with global end markets, especially in emerging markets (China, Brazil, India and Africa); expanding its end market reach to fulfill essential needs in agriculture, food and engineered materials; and improving company-wide efficiency and cost positions. ICL intends to continue exploring further opportunities in these directions --

ICL COMPLETES ACQUISITION OF 100% OF FOSBRASIL S.A.

 

 

- Purchase of ICL’s former joint venture partner, Vale’s, and Prayon’s shares of Fosbrasil strengthens ICL’s Performance Products’ position in the global market for purified phosphoric acid while expanding its footprint in South America –

- ICL’s customers to benefit from a broader line of phosphoric acids and phosphates as well as increased production and customer support -   - Transaction in line with ICL’s "Next Step Forward" strategy: growing its core businesses and expanding into large and growing markets worldwide -

Uses of Phosphoric Acid: from fertiliser to anti-nausea medication

Merry Christmas and Season´s Greetings

Phosphorous is vital for plant growth, so farmers use phosphoric acid-based fertilisers to supplement their crops

In simple terms, you can sayphosphoric acid is a weak inorganic acid with the formula H3PO4. However, it’s not as simple as it may seem … and phosphoric acid needs to be seen as a family and not an individual compound.

In this family, the simplest “member” is referred to as orthophosphoric acid and it represents a single phosphoric acid unit. When two or more of these orthophosphoric acid units “bump” into each other, they have a tendency to bind together, forming pyrophosphoric acid (2 units, H4P2O7), tripolyphosphoric acid (3 units, H5P3O10), tetrapolyphosphoric acid (4 units, H6P4O13) and so on. Collectively these are known as polyphosphoric acids. 

What is phosphoric acid?

At room temperature, pure phosphoric acid is a non-toxic, colourless, odourless, hygroscopic crystal. Commercial products are typically sold as a viscous solution in water, with varying concentrations according to use.

• Molecular formula: H3PO4 (orthophosphoric acid)
• Odour: odourless
• Colour: colourless
• Taste: Acid taste
• Boiling point: 407 degree Celsius
• Melting point: 42.4 degree Celsius
• Corrosivity: corrosive to ferrous metals, in particular highly concentrated solutions (85%)
• pH=1.5 in solution (0.1N)
• Solubility: soluble in water, alcohol and a 3:1 ether:alcohol mixture
• Forms 3 series of salts: primary, dibasic and tribasic phosphates
• Chelating agent
• Reacts readily with metals for form hydrogen gas
• Forms toxic oxides on combustion

Mode of preparation

In industrial settings, phosphoric acid can be produced via two separate routes, known as the wet process and the thermal process. Although the wet process is more predominant, the thermal process tends to be the preferred option for uses in the food industry.

• Wet process: This method involves treating fluoroapatite (known as phosphate rock, 3Ca3(PO4)2.CaF2) with concentrated sulphuric acid (H2SO4). The initial solution only contains about 30% phosphoric acid, but can be concentrated after water evaporation. In addition, by-product calcium sulphate (CaSO4) and other impurities can also be filtered and removed.
  Ca3(PO4)2 + 3H2SO4 -> 2H3PO4 + 3CaSO4
• Thermal process: This method generates a much purer phosphoric acid solution, as the starting point is pure elemental phosphorus, thus avoiding all impurities present in apatite. In this process, phosphorus is “burnt” to phosphorus pentoxide (P2O5) at high temperatures (1500-2500 degree Celsius) and then hydrated to phosphoric acid. Further purification steps may be needed for food or medical uses, to remove all traces of impurities.
  P4 + 5O2 -> 2P2O5
  P2O5 + 3H2O -> 2H3PO4

Phosphoric acid as fertiliser

For plants, phosphorus is an essential major nutrient. This means its functions cannot be performed by any other nutrient, and therefore an adequate supply is vital for development and growth. Farmers know this only too well, and commonly use phosphoric acid-based fertilisers to supplement their crops. In fact, the vast majority of the worldwide production of this compound is used in the manufacture of these agricultural products.

Typically the cheaper wet process is used, and several grades can be obtained, with varying concentrations of phosphoric acid. Products range from 0-20-0 (reflecting N-P-K content) to 0-79-0, with superphosphoric acid, depending on the “clean-up” steps following synthesis. Fertilisers are usually a mixture of ortho and polyphosphate, which are less corrosive than pure orthophosphate and easier to store at sub-freezing temperatures.

Phosphoric acid as a food additive

The second most common application is in the food industry, using phosphoric acid produced following the more expensive thermal process. Next time you go for a bottle of fizzy drink, check the ingredient list and most likely you’ll find E338. Typically, this additive is used to give various foods and drinks a sour and tangy taste. The list of examples is long, including from carbonated beverages and beer to chocolate and processed meat.

Niche applications

In addition to the two most common uses referred to above, phosphoric acid is used in a variety of niche applications, including:

• Rust removal: This compound can be simply applied directly on rusted iron or steel, where it can convert rust (iron(III) oxide, Fe2O3) to ferric phosphate (FePO4). Multiple applications may be needed.
  2 H3PO4 + Fe2O3 → 2 FePO4 + 3 H2O
• Protection against rust: Phosphoric acid can also provide some protection against the development of rust via a phosphate conversion coating. The anti-rust properties rely on a thin coating with a dilute solution of phosphoric acid. Reacting with the surface to protect, this coating forms a thin layer of insoluble crystals, impenetrable to rust attacks.
• Dentistry: Used by dentists as an etching solution. The phosphoric acid is used to “scratch” the smooth surface of the teeth, providing a grip for dental appliances or fillings. For the same reason, it can also be used as a plaque remover and teeth whitener.
• Anti-nausea medication: This compound is a common ingredient in several over the counter anti-nausea medications
• Cleaning products: Phosphoric acid can be a strong cleaning agent, typically used in construction to clean mineral deposits and cement stains. It’s also an ingredient in many household cleaning products, used as a dispersing agent.
• Other applications include:
  • buffer agent in chemistry and biology
  • electrolyte in phosphoric acid fuel cells
  • electrolyte in oxyhydrogen generators
  • electrolyte in copper electropolishing
  • oxidising agent
  • catalyst in the synthesis of ethanol
  • wet etching agent in compound semiconductor processing
  • pH regulator in cosmetic products
  • pH regulator in hydroponics

If you want to find out more, don’t forget to check out our resources list for detailed information about phosphoric acid.

RESOURCES

Pubchem.ncbi.nlm.nih.gov, (2014).Phosphoric acid – PubChem. [online] Available at:https://pubchem.ncbi.nlm.nih.gov/summary/summary.cgi?cid=1004&loc=ec_rcs[Accessed 20 Aug. 2014].

ChemSpider, (2014). Phosphoric acid. [online] Available at:http://www.chemspider.com/Chemical-Structure.979.html [Accessed 20 Aug. 2014].

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Alex Reis

Alex Reis is a freelance science writer, with a particular expertise in the field of biological sciences. She has several years experience in scientific writing and research, with various scientific manuscripts published in high impact factor journals, including Nature Cell Biology, as well as articles promoted in more mainstream publications.

Vale still searching for partner in fertilizer industry

Provider: Valor Econômico

December 11, 2014 (08:28)

A year after admitting it was looking for a strategic partner for the fertilizer division, in line with its strategy of concentrating the focus on iron ore, miner Vale keeps giving no signals on the status of its search. Meanwhile, the company’s investments to increase the domestic supply of raw materials for the production of fertilizers are uncertain and make room for a continuous increase in imports, which now account for about 70% of a demand that continues to grow.
Market sources claim that Vale could partner with a single group or seek less ambitious one-time projects. Nevertheless, the miner seeks companies with know-how in fertilizers and does not want to get rid of the control of a business that it was “convinced” to buy during the government of Luiz Inácio Lula da Silva. Depending on the model chosen, one or more joint ventures are expected to be created.
Without offering clues on which path it will follow, in recent days Vale has been reinforcing statements about its search for partner in the sector. On Tuesday, Vale CEO Murilo Ferreira said the company continues to work “intensively” to reach an agreement in this segment.
Companies with bigger chances to be partner of Vale include Norway’s Yara, several industry representatives told Valor. Yara said “it did not comment on market rumors.” According to these sources, Yara is interested in increasing its stake in phosphate fertilizers. A step has been taken in this direction with the acquisition of a 60% stake in the Brazilian group Galvani earlier this month.
Worldwide, Yara is best known for its leadership in the nitrogenous fertilizer industry. The company began to operate timidly in Brazil in the 1970s. From the 2000s, it started making acquisitions in the country and today is a leader in the domestic distribution of fertilizers, with a 25% share.
The leading position in the Brazilian market was made possible with the acquisition of the fertilizer operations of American multinational Bunge last year. In Brazil, Yara has 33 fertilizer mixing units and three producing phosphate fertilizers.
The market has also speculated that its future partner in this sector would be an Indian company. Indian cooperative IFFCO, one of the world’s largest manufacturers and distributors of fertilizers in the cooperative sector, said it would not comment on the matter. Last year, the IFFCO announced a long-term contract with Vale for the supply of phosphate ore from the Bayóvar mines in Peru.
Vale returned to the fertilizer market after acquiring shares of multinational and Brazilian companies in Fosfértil, a former state-run company which was privatized in the 1990s. In 2010, Vale completed the purchase of Bunge’s assets in the segment and the acquisition of Fosfertil’s controlling interest in a $4.7 billion deal.
More so because of the government’s pressure, Vale’s investment generated huge expectations in the Brazilian market, historically dependent on imported fertilizers. But the company didn’t embark on an investment wave in the segment, as expected, and despite strong growth in domestic demand, the country’s fertilizer production lost space and even declined in 2013, down 4.3% compared to 2012.
From January to October this year, the country produced 7.350 million tonnes of intermediate fertilizers, a 6.5% drop over the same period of 2013, according to the National Association for the Promotion of Fertilizers (Anda). In the same comparison, imports grew 11%, to 20, 421 million tonnes, and domestic sales increased 5.7%, to 27.448 million tonnes.
These figures show that Brazil is still far from reducing its historic dependence on imported fertilizers. And the scenario should not change much in the coming years. It may even worsen, given that local sources of ore are in fact scarce and new exploration projects demand billions in investments.
Also, industry officials say a major reason for not investing in the production of raw materials for fertilizers in the country is the lack of tax equality, since the imported product is not taxed, unlike the one produced in the country. The demand for a change is old, but there the government gives no sign if it will announce new rules son.
Investments in production of raw materials for fertilizers in the country totaled $13 billion in 2013, to be disbursed by 2018, according to Anda. Of this amount, Vale is one of the largest investors. If materialized, these $13 billion investment would represent an additional production of 9 million tonnes of intermediate fertilizers and could reduce by $4.5 billion the deficit in the industry’s balance by 2018, according to calculations of Anda. Vale represented most of that amount. The trade group’s calculations forecast additional production of 9 million tonnes of intermediary fertilizers and could cut up to $4.5 billion from the segment’s trade deficit until 2018.
If Vale Fertilizantes sell its assets to some company, there would not happen a big change in the fertilizer market, as production in this case would only change hands, sources say. Unlike acquisitions in the fertilizer distribution business, which ended up being more concentrated in recent years

China Emerged as a Major Supplier of Phosphates to India

China’s phosphate demand has grown significantly as its agriculture has intensified. DAP/MAP consumption has experienced an annual growth rate of 15 percent over the past decade as phosphate fertilizer consumption grows and farmers use more high analysis products. During the same time period, investment in DAP/MAP production capacity produced an average annual capacity growth rate of almost 29 percent. This has resulted in China becoming a net exporter, supplying DAP to key countries in Asia, including India, but also selling some product to Latin America.
See more at: http://www.potashcorp.com/overview/nutrients/phosphate/market-overview/china-phosphate-profile#sthash.8SaBex30.dpuf

Global Phosphoric Acid Capacity Additions from 2014 to 2018

Majority of Capacity Being Developed in Saudi Arabia and Morocco.
New downstream phosphate capacity is expected to be developed in regions able to expand phosphate rock production.
The Ma’aden project in Saudi Arabia, with a capacity of 2.9 million tonnes of DAP per year, continues to ramp up following a lengthy series of start-up delays. A joint venture between Mosaic, Ma’aden and SABIC was recently announced, with plans to build a phosphate complex capable of producing 3.5 million tonnes of finished product annually.
In Morocco, OCP has built granulation capability to enhance its production flexibility. OCP is reportedly working on developing four projects at their Jorf Lasfar site which will house fully integrated phosphate plants capable of producing a variety of solid phosphate fertilizers.
Phosphoric acid capacity additions in China are expected to slow as Chinese producers near the end of the expansion boom that commenced in late 2009. 
See more at: http://www.potashcorp.com/overview/nutrients/phosphate/market-overview/global-phosphoric-acid-capacity-additions#sthash.PwD0UV7z.dpuf