Morocco launches $1.8 bln West Sahara investment plan

RABAT Feb 5 (Reuters) - Morocco's King Mohammed on Friday launched a 18 billion Moroccan dirham ($1.85 billion) investment plan in Western Sahara driven by the country's state-run phosphate company OCP, the state news agency MAP reported.
Morocco has controlled most of Western Sahara since 1975 and claims the sparsely populated stretch of desert, which has offshore fishing, phosphate reserves and oilfield potential, as its own territory.
Morocco's annexation of Western Sahara prompted a rebellion by the opposition Polisario Front, which has been backed by Morocco's neighbour Algeria. The United Nations brokered a ceasefire in 1991, but talks have since failed to find a settlement in Africa's longest-running territorial dispute.Rabat invests heavily there, hoping to calm social unrest and independence claims.The plan includes investments of 8.3 billion dirhams in a new fertilizer plant, 4.2 billion dirhams in a new port near the city of Laayoune and 3.1 billion dirhams in other phosphate industrial facilities, MAP said.The plants and the port will be based in the industrial hub of OCP's subsidiary Phosboucraa in al-Marsa near Laayoune, 100 kilometers (62.14 miles) from Phosboucraa's mines.The announcement came few days after OCP, the world's leading phosphate exporter, started production at a new fertilizer plant dedicated to the African market in the Jorf Lasfar area on the Atlantic coast where it invested 5.3 billion dirhams.


The company is building three other units in the same hub with a capacity to produce 1 million tonnes of fertilizer each, it said.

        
OCP, a major earner of foreign currency for Morocco, posted a 66 percent jump in net profit for the first half of 2015 to 3.99 billion dirhams, helped by a strong U.S. dollar.It has invested heavily and made a series of acquisitions to improve its infrastructure and boost output. It aims to raise output to 47 million tonnes of crude phosphate rock in 2017, from around 34 million tonnes in 2013.The company says it wants to become the world's top fertilizer producer by increasing fertilizer production to 12 million tonnes by 2017, up from 4.5 million tonnes in 2010. ($1 = 9.7505 Moroccan dirham) (Reporting By Aziz El Yaakoubi, editing by David Evans)

Global fertiliser market needs price fall to rebalance - PhosAgro

INTERVIEW- Thursday, 4 Feb 2016 | 2:00 AM ET Reuters

LONDON, Feb 4 (Reuters) - Flagging fertiliser prices are set for a further fall which will likely drive some high-cost Chinese producers out of business to help ease a stocks overhang and lift prices later in 2016, one of the world's largest producers, Russia's PhosAgro, said.

Chief Executive Andrei Guryev said he expected prices for phosphate, potash and nitrogen fertilisers to weaken by at least another 10 percent after dropping 30 percent in the past months, a steeper than usual fall during slack winter demand, which sent stocks ballooning, including those in key consumer India.
"The market must bottom out. Prices could fall by another 10 percent in the next few weeks," Guryev said. "We need to reach the bottom first to reduce stockpiles and begin to grow again".
Guryev declined to say whether the price drop would be driven by PhosAgro itself but said the company, which has increased output by about one million tonnes over the last two years to 6.8 million tonnes, would continue growing production.
"Sometimes, it is quite positive for the market to drop one level down because that is the only way to find a lift which will take you up," he said in an interview.
PhosAgro is the world's third-largest producer of phosphate rock, an essential agricultural nutrient. It also sells compound fertiliser, a blend of processed phosphates, nitrogen, potash and often sulphur.
Guryev said he expected prices for key fertiliser diammonium phosphate (DAP) to drop around 10 percent to $320 per tonne on a free-on-board basis, before recovering to $400 later in 2016.
He said the price drop would mostly hurt higher cost Chinese producers. Guryev said he based his calculations on similar developments in 2013, 2010 and 2008, when low prices drove some high cost production out of the market and ultimately led to a rebound in prices.
PhosAgro is one of the lowest cost producers in the world with cash costs amounting to $145 per tonne of DAP compared to an industry average of $370 and Guryev said the company was prepared for any price scenario.
He said his outlook for the global fertiliser market was positive as Indian consumption was racing ahead thanks to low oil prices, which allow farmers to spend more on fertilisers.
Key Latin American consumers such as Brazil have however reduced demand because of steep currency devaluations. "But overall, this is a healthy trend and their business would soon grow again."
He said Russia and the United States would also be strong markets in 2016, giving hope to clear the stocks' overhang, which Guryev said arose partially because China increased fertiliser production by 92 percent in the past 2 years.
"There are no fundamental reasons for weaker prices but people are delaying purchases and stocks are rising. I think it is driven by market fears - declines in stock markets, weaker currencies and declines in commodity prices," he said.
PhosAgro competes directly and indirectly with companies such as Canada's Potash Corp or U.S. Mosaic.
PhosAgro increased production by 10 percent in 2015 as it benefited from a steep rouble devaluation at home while selling in U.S. dollars.
(Reporting by Dmitry Zhdannikov, editing by David Evans)

BHP Spinoff South32 Said Interested in $1 Billion Anglo Sale

South32 Ltd., the aluminum, coal and manganese producer spun out of BHP Billiton Ltd. last year, is considering bidding for Anglo American Plc’s $1 billion niobium and phosphate business in Brazil, according to three people familiar with the situation.
South32 sent out requests to investment banks as it seeks to hire an adviser to assist in the bidding process, the people said, asking not to be identified because the information is confidential. Goldman Sachs Group Inc. and Morgan Stanley are managing the sale for Anglo, the people said.
First-round bids are due by the middle of next month, and Anglo is seeking to complete the sale in one transaction, rather than split the niobium and phosphate assets, they said. Large North American fertilizer companies are also likely to participate in the auction, two of the people said. Anglo confirmed last month that it would work to sell the business this year.

Source: http://www.bloomberg.com/news/articles/2016-01-13/bhp-spinoff-south32-said-interested-in-1-billion-anglo-sale

Global Availability of Phosphorus and Its Implications for Global Food Supply: An Economic Overview

6 Conclusion
As far as this can be said today, agriculture will always be dependent on phosphorus inputs. And at least in foreseeable future it is very likely that the prime source of phos-phorus for agriculture will be mineral phosphate fertilisers and therefore, ultimately, phosphate rock. Although phosphate rock is a finite natural resource and contrary to recently published articles predicting a "peak phosphorus" event within this century, the currently available information shows no clear indications that phosphate rock deposits are facing depletion any soon. At the same time, the inherent uncertainty of such pre-dictions needs to be emphasised.

Furthermore, a close inspection of price trends and their determinants reveals that none of the past price peaks were triggered by physical phosphate rock scarcity but in-stead by a combination of demand increasing factors, long capacity expansion lead times and, possibly, by an oligopolistic market structure.

But even though mineral phosphate deposits might not run out in the near future, there can be no doubt about the finiteness of this resource. Given that phosphorus as a nutrient is not substitutable in agriculture the only alternative to the use of phosphate rock-based mineral fertilisers is using phosphate recyclates. In other words, unless the phosphorus cycle is closed, essentially through complete recycling, the supply of min-eral phosphate fertilisers is going to be finite. This is unlikely to be a problem within this 19

century, yet it remains a permanent threat in the long run. A fundamental question therefore is whether the market price mechanism will provide appropriate economic in-centives for phosphorus recycling early enough to prevent a peak phosphorus event and eventually a limited availability of this non-substitutable nutrient. A precautionary approach would surely include a strategy towards a more efficient use of phosphorus fertilisers and investment in recycling options.

Meanwhile, physical abundance of phosphate rock alone may not be enough to en-sure a safe and stable economic supply. On the one hand, this relates to the highly skewed distribution of global phosphate rock production and reserves which may lead to a further increasing dependency of phosphate importing regions and nations on only a handful of producing countries, such as China, Morocco and Russia. On the other hand, increasingly volatile phosphate rock and fertiliser prices can pose a risk, espe-cially to farmers in developing and emerging nations. In contrast to developed coun-tries, the soils in developing regions are often phosphorus-deficient and therefore quite responsive to fertiliser application. Consequently, a price shock that renders phosphate fertiliser unaffordable can be assumed to have more severe effects on agricultural yields in tropical countries than in the industrialised countries of the North with phos-phorus saturated soils.

In that sense, and although the "peak phosphorus" debate cannot be expected to provide a reliable depletion or peak estimate, it surely helped raise public, political and scientific awareness of a formerly barely noticed topic. As a result, inter- and transdis-ciplinary research networks and initiatives such as Global TraPs, the European Phos-phate Platform and GPRI have been founded and the European Commission aims at publishing a Green Paper on the topic (ENEP 2013; EPP 2013; GPRI 2011; Scholz et al. 2013a).

　

by Markus Heckenmüller, Daiju Narita, Gernot Klepper

The World’s Biggest Phosphate Rock Producers, 2012 (Share in World Production)

OCP (Morocco)   13.3%

The Mosaic Company (USA)   6.5%

Yuntianhua Group (China)  3.9%

OJSC PhosAgro (Russia)   3.7%

PCS (PotashCorp) (Canada)   3.5%

Jordan Phosphate Mines (Jordan)  3.1%

CPG (Tunisia)   2.9%

Vale S.A. (Brazil)   2.2%

ICL (Israel)   1.7%
 
 
 Source: Based on Dennis (2013) and ICL (2013). 










 

Anglo Said to Weigh $1 Billion Niobium, Phosphate-Unit Sale

Anglo American Plc is considering selling its niobium and phosphate business in Brazil in a deal that may fetch about $1 billion for the London-listed miner, said people familiar with the matter.
Anglo is working with advisers on a possible sale of the business, said the people, who asked not to be identified because the information is private. A formal sale process hasn’t started and the company may still keep the operations, according to the people. Anglo has received expressions of interest but no formal offer, one person said.
The mining company is seeking to raise $3 billion by selling assets and is cutting jobs to trim costs and cut debt amid a collapse in commodity prices. It has already raised about $2 billion this year by offloading its tarmac business, two copper mines in Chile and platinum assets in South Africa. Anglo said in July that it had net debt of $11.9 billion, with a long-term borrowing target of $10 billion to $12 billion.

Anglo closed 2.2 percent higher at 609.9 pence in London. The stock is down 49 percent this year. A spokesman for the producer declined to comment.
China’s slowdown and cooling demand for metals and minerals has undermined Chief Executive Officer Mark Cutifani’s efforts to turn around the fortunes of a business that mines platinum and diamonds in Africa and iron ore in Brazil.
Anglo says it’s among the world’s three biggest producers of niobium. Its business for that material, used to make steel, produced 2,934 metric tons in the first half and contributed $35 million to earnings before interest, taxes, depreciation and amortization. Its phosphates unit had output of 513,000 tons with Ebitda of $52 million.
In late 2013, Anglo combined the management of its nickel, niobium and phosphates operations under a sole division, naming Ruben Fernandes as CEO of the business and relocating its offices to Belo Horizonte, in the Brazilian southeastern state of Minas Gerais, from Sao Paulo.

The London-based mining company is set to become the world’s second-largest producer of niobium, used in high-temperature alloys for jet engines and in lightweight steel for cars, when it completes the ramp up of its $325 million Boa Vista Fresh Rock plant in Brazil’s Goias state by mid-2016.
Cia. Brasileira de Metalurgia & Mineracao, controlled by the billionaire Moreira Salles family, dominates the supply of niobium after starting operations in 1961. CBMM, as the Araxa, Brazil-based company is known, sold a 30 percent stake to a group of Asian steelmakers in two transactions worth $3.9 billion in 2011.

ICL Signs MOU to Establish Phosphate Operation in Namibia

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         ICL TEL AVIV, Israel, December 7, 2015 /PRNewswire/ --

Joint venture with Leviev Group would build a large-scale maritime mining and phosphate downstream manufacturing business  

ICL aims to secure competitively-priced phosphate deposits for future decades to strengthen its global specialty phosphates business 

JV is another step in ICL's strategy to diversify its sources of phosphate raw materials in order to build its specialty phosphate business in the Americas and Africa 

Follows ICL's recent strategic steps, including the formation of a phosphate JV with China's leading phosphate company Yunnan Yuntianhua (YTH) 

 

This could be the first commercial maritime exploration of phosphate in the world.

This phosphate should be high in chlorides and organics, eventually "similar" the peruvian Bayóvar phosphate nowadays being used to produce phosphoric acid in Brazil (Cubatão), México (Coatzacoalcos) and US (Uncle Sam).