October 21, 2011 TOP STORIES MORE NEWS

Intrepid sees potash output and sales fall in Q3 Heringer starts up blending plant Brazils Unigel inaugurates unit to compact ammonium sulphate

Yara buys environmental technology firm Petro Miljo Brazilian deliveries due to reach 27 million mt in 2011 Acron: Commercial output up 7% in first nine months K+S completes sale of COMPO to Triton

Kinder Morgan to purchase El Paso in $38 billion deal Uralkali produces 5.96 million mt of KCl in first nine months of 2011 Florida petition on EPA water rule

PROJECTS/PEOPLE/FREIGHT
Chatham Rock Phosphate signs contract with Boskalis Shchekinoazot seeks jv partners FACT to construct new sulacid plant Aguia starts potash project drilling

MBAC secures financing facility Namibian phosphate sample complete GrowMax advances Peru MOP project Boliden appoints new smelter head Panamax earnings hit 7-month high

Ferrostaal & Cameroons SNH sign MoU for N plant studies

M&A

EuroChem eyes Russian gas producer Severneft-Urengoy

HOT ON the heels of Russian fertilizer group EuroChems agreement with BASF to acquire the German groups nitrogen fertilizer assets located in Antwerp, Belgium and BASFs 50% stake in the PEC-Rhin joint venture in Ottmarsheim, France a deal valued by the two companies at an estimated 700 million ($962 million), a spokesperson for EuroChem confirmed late this week that the Russian group has applied on October 4 to the Federal Antimonopoly Service of the Russian Federation (FAS) for regulatory clearance to acquire 100% of the gas producer, Severneft-Urengoy, based in the Tyumen region, in the south of the country. The acquisition of Severneft-Urengoy, if it proceeds, would mark EuroChems first major investment in gas assets. The Russian group already owns a licence to explore and prospect the Perelybsko-Rubezhinsky gas and oil deposit in Russias Saratov region. It acquired the licence in October 2010. EuroChem had said last week it is planning to proceed with acquisitions of natural gas producers and gas fields over the next 12 months. The objective of these [gas] acquisitions is to secure long-term gas supply for EuroChems nitrogen plants at a competitive price, i.e. below the export netback parity level which should be reached in Russia for the industrial gas consumers in 2015-2016, the EuroChem spokesperson said.

October 21, 2011 / Volume 25 / Number 28

The Russian fertilizer group currently consumes annually about 4.5 billion cubic metres of gas per year. EuroChem recently announced plans to build a new nitrogen complex at Nevinnomysskiy Azot. According to the companys spokesperson, this plan entails the gradual replacement over the next 10 years of the existing nitrogen capacity at Nevinnomysskiy Azot. However, he added that the project will go ahead only if EuroChem secures adequate supply of gas at a price which would allow it to remain competitive on the global market in the long term. .signs RUB 20bn loan

Yara buys environmental technology firm Petro Miljo

YARA INTERNATIONAL and Swedens Petrokraft AB, a leading engineering company, have announced jointly that Yara Sverige AB will acquire Petrokraft's fully owned subsidiary, Petro Miljo AB, for an undisclosed amount. Petro Miljo is a leader in Selective Non Catalytic Reduction (SNCR), a technology that can reduce nitrogen oxide (NOx) emissions, from industrial plants by up to 90%. A Yara spokesperson confirmed that Petro Miljo will be absorbed as a wholly-owned subsidiary of Yara International. Further, all of Petro Miljo's employees and assets will be transferred to Yara International by the end of this year. The acquisition will allow Yara to bolster the NOx abatement reagent, handling and storage solutions it provides, improving the synergy between the SNCR systems it installs and the reagents it produces, the Norwegian company said. Yara and Petro Miljo first began collaborating in 2007, combining Yara's knowledge of nitrogen chemicals with Petro Miljo's expertise of combustion processes. As a result of the deal, Yara said it will be able to offer one of the most comprehensive and effective NOx emission reduction solutions to utilities, refineries, manufacturing centres, and other industrial facilities as the company's NoxCare capabilities will now include everything from building SNCR systems and storage facilities to supplying the right reagent to advising on chemical storage and handling. "By integrating Petro Miljo's technical expertise with Yara's know-how, we will be better positioned to serve an increasing number of industrial facilities that are exploring how to reduce their nitrogen oxide emissions in an optimal way," said Yves Bonte, senior vice president and head of Industrial for Yara International. To date, Petro Miljo has equipped more than 180 combustion lines around the world with its SNCR technology.

to fund investment

programme and M&A

EuroChem this week announced it had signed a longterm RUB 20 billion ($642.5 million) loan agreement with the countrys leading financial institution, Sberbank. The fertilizer group said it will use the loan for general corporate purposes, including its investment programme and for financing potential mergers and acquisitions. EuroChem is pleased to welcome Russias largest financial institution in its credit portfolio, particularly at a time of heightened volatility in the financial markets. Proceeds from this loan will allow EuroChem to continue strengthening its competitiveness in the global agrochemical markets in line with the companys strategy, said EuroChems director for Finance and Economy, Andrey Ilyin, Financing mineral fertilizer manufacturers is a key lending priority for Sberbank. Despite market volatility, we continue to develop relationships with our customers, said Alexander Bazarov, vice president and director of of Sberbanks Major Accounts Department.

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.....Reports sharp rise in Q3 net

Yara International on October 21 reported a 85% rise in net income after non-controlling interests to NOK 3.57 billion ($634 million) for the third quarter ended September 30, 2011, compared with NOK 1.93 billion in the same year earlier period. The Norwegian fertilizer major attributed the strong result primarily to a significant margin improvement compared with the 2010 third quarter. Excluding net foreign exchange gain/loss and special items, the result was NOK 9.13 per share compared with NOK 5.00 per share in third quarter 2010. Third-quarter EBITDA excluding special items was NOK 4.21 billion compared with NOK 2.54 billion last year. "Yara reports strong third-quarter results as margins improved significantly for all main product groups, with strong demand in Latin America and Asia in particular," said the companys president and CEO, Jrgen Ole Haslestad. "Despite macroeconomic concerns and challenging harvest conditions, on a comparable basis European sales were only 10% below last year. Farm margins remain healthy at today's grain prices, and with limited stocks in the fertilizer value chain this indicates a catch-up in deliveries is likely during the remainder of the season," he said. Adjusted for the shortfall of Libyan urea (production at Yaras Lifeco joint venture with Libyan partners in Marsa El Brega has been suspended since February 20 due to the civil unrest in that country) and structural changes, Yara fertilizer deliveries were down 8% compared with third quarter 2010 when demand was strong in Europe. Margins improved for all main product groups, with the strongest increase for nitrates. Industrial volumes increased 8%, primarily reflecting growth in environmental products. Yara reported its production system ran slightly below normal levels in the third quarter, in line with the companys second-quarter guidance. Going forward, Yara noted a tightening grain supplydemand balance pointing to continued strength in crop prices and a strong need to increase agricultural productivity. The company also noted that in early October, significant buying from India has sustained international nitrogen prices at third-quarter levels. According to official information, Yara said, the Chinese export tax will return to

110% on November 1, up from approximately 40% today based on recent export prices. Yara noted that the Qafco-5 expansion will start up at the end of the fourth quarter, with a total annual capacity of 1.5 million mt of ammonia and 1.35 million mt urea, adding that Qafco-6 is planned to start production in the fourth quarter of 2012, adding a further 1.35 million mt of annual urea capacity. The Qafco-5 unit will have a temporary merchant ammonia capacity of 750,000 mt until Qafco-6 starts up. Yara holds a 25% stake in Qafco (Qatar Fertiliser Company) and is partnered by Qatar Industries.

Brazil

Fertilizer deliveries expected to reach 27 million mt in 2011

OFFICIAL STATISTICS from the Brazilian Fertilizer Industry Association, ANDA, for September 2011 indicate that the countrys fertilizer deliveries in the month were 3.43 million mt, 11% more than in the same month of last year, when they were 3.10 million mt. Deliveries in the nine months to September 30, 2011 increased 22.9% to 20.5 million mt of fertilizers. Domestic production of fertilizers in the same nine-month period grew just 5.0% to 7.2 million mt. The latest estimates by Brazilian fertilizer producers indicate that fertilizer deliveries in the country in 2011 may grow 10% to reach 27 million mt.
BRAZIL: MARKET PERFORMANCE (000 MT) JanuaryDeliveries Production1 September 2010 16,669 6,904 2011
1

Imports2 10,700 14,916 +39.4%

20,487

7,247

% change +22.9% +5.0% Production includes SSP/TSP granulation 2 Imports do not include imports for non-fertilizer usage Source: ANDA & Siacesp

Fertilizer import movement into Brazil in September 2011 reached 2.01 million mt, 10% higher than in the same month of the previous year when imports were 1.82 million mt. Imports in the nine months to September 30, 2011 grew 39.4% to 14.9 million mt, year-on-year, representing 72.8% of the countrys total fertilizer requirement.

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BRAZIL: FERTILIZER IMPORTS 1 (000 MT) January2010 2011 September AS 1,144 1,317 AN Urea MAP DAP SSP TSP KCl Others 632 1,590 819 327 188 697 4,454 849 911 1,933 1,605 365 552 921 5,872 1,440

Operational performance
% change +15.1 +44.1 +21.6 +96.0 +11.6 +193.6 +32.1 +31.8 +69.6 +39.4

Acron: Commercial output up 7% in first nine months

THE ACRON group achieved a 7% increase in commercial output (which excludes output for its own use) to 4.366 million mt in the nine months to September 30, 2011, compared with 4.069 million mt for the same period a year earlier, the Russian fertilizer and chemicals group announced on October 18. The Acron group includes Acron (Veliky Novgorod), Dorogobuzh, and China-based Hongri Acron. Acron said the groups operational results for nitrogen fertilizers were impacted in the reporting period due to a number of maintenance turnarounds in the third quarter, including one at the nitrogen unit. However, it added, that this was compensated for by the high performance in the first two quarters of the year. In the first nine months of 2011, Acron noted that the Dorogobuzh subsidiary had shown a steady growth in its operational results, due to the fact that the business operation did not have any long-lasting overhauls of the nitrogen unit as it had in 2010. The groups Chinese subsidiary, Hongri Acron, also increased its output due to a favourable situation in the Chinese fertilizer market, Acron said. The Group continues its dynamic expansion in the markets of highly populated countries of South-East Asia and Latin America. And due to the Groups own logistics and distribution resources, the efficiency of sales on those remote markets is as high as on the traditional markets, Acron said in its October 18 statement. Acron noted that in general, there is an upswing trend in the global fertilizer market. The actual world demand on behalf of agricultural companies provides for both sustainable fertilizer sales and satisfactory prices for producers the group said.

Total 10,700 14,916 1 Does not include imports for non-fertilizer usage Source: Siacesp

Most relevant volume increases were seen in KCl (up 1.418 million mt or 32% year-on-year), in MAP (up 786,000 mt or 96%), in SSP (364,000 mt or 194%) and in urea (up 343,000 mt or 22%).

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ACRON GROUP: CONSOLIDATED OUTPUT 1 (000 MT) JanuaryJanuaryProduct September September 2011 2010 Ammonia 1,306.3 1,279.7 Including own use 1,163.4 1,070.3 Nitrogen fertilizers 1,799.9 1,630.5 Including own use 251.3 205.3 Ammonium nitrate 1,075.2 956.5 Including own use 51.0 31.0 Urea 337.7 330.2 Including own use 200.3 174.3 Urea-ammonium-nitrate 387.0 343.8 (UAN) Complex fertilizers 1,949.4 1,772.2 Including own use 19.9 13.0 NPK 1,732.4 1,639.8 Including own use 19.9 13.0 Bulk blends 217.0 132.4 Organic compounds 297.2 262.3 Including own use 154.8 132.3 Methanol 58.9 60.1 Including own use 54.6 48.7 Formalin 108.1 93.5 Including own use 99.5 83.1 Urea-formaldehyde 130.2 108.7 resins (UFR Non-organic 602.9 545.5 compounds Low-density & technical 167.0 132.4 grade AN Others 435.9 413.1 TOTAL COMMERCIAL 4,366.3 4,068.7 OUTPUT 2 1 Operating results for Acron, Dorogobuzh & Hongri Acron 2 Commercial output excludes product for own consumption Source: Acron

% change +2.1% +8.7% +10.4% +22.4% +12.4% +64.5% +2.3% +14.9% +12.6% +9.7% +53.0% +5.6% +53.0% +63.9% +13.3% +17.0% -2.0% +12.1% +15.6% +7.7% +19.8% +10.5% +26.1% +5.5% +7.3%

The Group is developing extensively new markets for its key product NPK 16:16:16. This year showed significant results in complex fertilizer sales on the Thai market and in some countries of Latin America, Acron said.

Divestment

K+S completes sale of COMPO to Triton

GERMANYS K+S Aktiengesellschaft announced on October 18 that it has concluded successfully the sale of its COMPO business unit to the European private equity investor Triton, after the EU cartel authorities cleared the deal on September 26. The two companies signed a sales agreement for COMPO on June 20 (FW Online, June 21, 2011). K+S put an enterprise value of 205 million ($282 million) on COMPO at the closing of the transaction. The decision to divest the business unit, the German firm said, is part of its strategy to focus its financial and management resources on its Potash and Magnesium Products and Salt business sectors where it envisions the biggest growth. COMPO, based in Mnster/Westphalia, is one of the leading suppliers of branded goods for home and garden. The range of products includes fertilizers, plant protection products, high-quality potting soils and speciality products for public green areas, professional horticulture, special crops and special applications in agriculture. In financial year 2010, COMPO generated revenues of 402.3 million and an EBITDA margin of approximately 4%. It employs 1,075 people globally. Triton is an independent European private equity investor and focuses on companies in German-speaking countries and Northern Europe. K+S described Triton as a firm that invests in "market leaders in attractive niches with a high potential for increased value.

Acron and Dorogobuzh continued to increase their output of nitrogen fertilisers, demand for which, the Acron group noted, remains very high both in the Russian market and in major export markets, namely Latin America, North America and Europe. For the nine months to September 30, production of ammonium nitrate, urea and UAN increased 10% in total year-on-year. High demand for complex fertilizers provided maximum load for the groups NPK production facilities and enabled it to achieve a 64% year-on-year increase in dry blends output in the first nine months of 2011, which was mainly at Hongri Acron, the Russian group said.

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New projects

CAMEROON FERTILIZER & RAW MATERIALS IMPORTS 1 (MT) 2009 Total fertilizers & raw materials Of which: Urea2 NPKs DAP Ammonium sulphate Ammonia Potassium chloride Phosphate rock MAP Potassium sulphate Potassium nitrate Ammonium nitrate Superphosphates 40,974 1,874 8,728 21,385 0 18,622 2,177 399 584 456 341 0 36,523 24,041 14,212 11,294 1,567 28,597 3,288 1002 670 0 450 100 8 95,885 2010 123,610

Ferrostaal & Cameroons SNH sign MoU for N plant studies

GERMANYS FERROSTAAL AG has signed a Memorandum of Understanding (MoU) with Cameroons state-owned National Hydrocarbons Corporation, known as SNH, to undertake feasibility studies for a proposed ammonia and urea plant to be located in the West African country and based on offshore natural gas, according to a joint statement by the two companies last week. The MoU was signed at SNHs head office in Yaounde, Cameroons capital, on October 13 by the executive general manager of SNH, Adolphe Moudiki, and Ferrostaals executive vice president for Petrochemical Industry, Kaspar Evertz. According to the October 13 statement, the envisaged plant will target an annual production of about 600,000 mt of ammonia and 700,000 mt of urea intended for the domestic and export markets. The location of the proposed plant has yet to be determined. The feasibility studies are expected to take about nine months to complete. A spokesperson for Ferrostaal, a global provider of industrial services in plant construction and engineering, confirmed that the German company also may be considering becoming a partner in the project, should the development go ahead, in addition to undertaking the construction of the plant. Ferrostaal has built and operated petrochemical complexes in Chile, Trinidad, Oman as well as in Venezuela. SNH said the signing of the MoU is in line with the implementation of Cameroons president Paul Biyas policies on agricultural development and industrial realisations for the West African country. Cameroons Ministry of Agriculture and Rural Development estimates the countrys demand for fertilizer is currently around 450,000 mt a year and growing. At present all of Cameroons urea requirements are imported. According to Comtrade data, the country imported 38,866 mt of urea (dry product and solutions) last year, of which 2,343 mt were re-exported. Cameroon imported a total of 128,943 mt fertilizers and raw materials in 2010, according to Comtrade data. Of this total, around 5,333 mt were re-exported.

Calcium nitrate 190 1 Import data shown is actual import tonnages minus re-exports 2 Dry product and liquid solutions Data source: Comtrade

Potash

Intrepid sees output and sales fall in Q3

INTREPID POTASH, Inc. produced 165,000-175,000 st of potash and sold 185,000-195,000 st during the third quarter ended September 30, the Denver, Colorado company reported in its preliminary sales and production results last week. Output was down about 19% on the second quarter and sales were down by 15%. Production results for the quarter were consistent with expectations, as the scheduled shutdown for annual maintenance work was completed at the East mine and plant near Carlsbad, New Mexico, and the Moab, Utah mine completed its summer evaporation season and commenced harvest in mid-September. The lower relative production realised during the quarter will increase the cash costs per ton, Intrepid said.

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Intrepid estimates its average net realised sales price for potash sold during the quarter was approximately $485$495/st, an increase on the second quarter of $23-$33/st. Third quarter sales were affected by customer requests to delay shipments due to interruptions in the rail service caused by high water levels along the Missouri River. Additionally, the severe drought in Texas continued to reduce demand. Intrepid was successful in marketing traditional Texas potash volumes into other markets less affected by weather, albeit at higher freight costs, the company said. Progress continued towards commissioning the Langbeinite Recovery Improvement project at the East mine. Intrepid expects the commissioning of the new higher recovery Dense Media Separation plant to occur by the end of 2011 and of the granulation plant early in 2012. The project remains on budget with an estimated total capital investment of approximately $85-$90 million, the firm said. The HB Solar Solution Mine project near Carlsbad remains on track for an anticipated Record of Decision from the Bureau of Land Management in the first quarter of 2012. Intrepid's directors recently approved the construction of a new compaction plant to replace the current facility at the North plant near Carlsbad. The project is designed to increase the capacity of the North plant to handle all of the anticipated production from the HB Solar Solution Mine project and the planned expansions of mining and milling capacity at the West mine near Carlsbad. The first part of the project is expected to be completed in early 2013 and the second phase in the following year at a cost of $95-100 million.

Heringers total installed production capacity has reached 5.8 million mt/year of NPK blends with the inclusion of the Viana expansion. The firms 19 operating units are located in the main fertilizer consuming regions of Brazil. Heringer holds around a 16% share of the countrys fertilizer market, which is estimated to reach 27 million mt this year (see Fertilizer deliveries expected to reach 27 million mt in 2011 story on p.4).

Brazils Unigel inaugurates unit to compact ammonium sulphate

BRAZILIAN PETROCHEMICALS group Unigel on October 14 inaugurated a unit to compact 100,000 mt/year of ammonium sulphate (AS). The new facility is located in the groups complex at Candeias, in Bahia state in Brazils Northeastern region. The Candeias site has capacity to produce annually 400,000 mt/year of AS and 90,000 mt/year of methacrylates. Unigel reported the investment to build the new unit amounted to BRL 45 million ($28 million). Brazils AS production in 2010 totalled 264,300 mt, of which 235,352 mt were produced by Unigel. In the first three quarters of 2011, total domestic production of AS reached 224,798 mt while imports into the country amounted to 1.32 million mt. The Unigel group has 15 industrial units (11 in Brazil and four in Mexico) which produce raw materials for several industries including textiles, civil construction, packing, mining, electronic, fertilizers and automobiles.

Kinder Morgan to purchase El Paso

KINDER MORGAN Inc., a major provider of transportation and other logistics services to the fertilizer industry in North America, said October 16 that it would acquire El Paso Corp. in a transaction that will create the largest midstream and the fourth largest energy company in North America with an enterprise value of approximately $94 billion and 80,000 miles of pipelines. The total purchase price, including the assumption of debt outstanding at El Paso and including the debt outstanding at El Paso Pipeline Partners LP, is about $38 billion. The combined enterprise, including the associated master limited partnerships, Kinder Morgan Energy Partners, and EPB, will represent the largest natural gas pipeline network in the US, the largest independent transporter of petroleum products in that country, the largest transporter of CO2 in the US and the largest independent terminal owner/operator in the US.

MORE NEWS Heringer starts up blending unit expansion

HERINGER, ONE of Brazils major fertilizer manufacturers, on October 7 inaugurated the expansion of its blending unit located at Viana, in Esprito Santo state in Brazils southeastern region. The company reported that it had invested BRL 15 million ($9 million) to increase the units production capacity from 300,000 mt/year to 400,000 mt/year of NPK blends as well as the facilitys potential storage capacity from 60,000 mt/year to 75,000 mt/year of solid products.

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Uralkali produces 5.96 million mt of KCl in first nine months of 2011

OJSC URALKALI produced 5.96 million mt of potassium chloride in the nine months to September 30, 2011, the Russian potash company reported on October 17. The figure includes output from Silvinits Solikamsk operations since May 17, when Silvinit was merged into Uralkali and ceased to exist as a separate entity.
URALKALI POTASSIUM CHLORIDE PRODUCTION (MILLION MT) Uralkali JanuaryUralkali JanuaryUralkali & Sivinit September 2011* September 2011** January-September 2010*** 5.96 8.06 7.72 *includes Uralkali production volumes since January 1, 2011 and production volumes of Silvinits Solikamsk site after May 17, 2011 when Silvinit was dissolved. ** includes production volumes of Uralkali and Silvinit since January 1, 2011. *** includes production volumes of Uralkali and Silvinit since January 1, 2010. Source: Uralkali

The federally derived nutrient rule signed by EPA Administrator Lisa Jackson on November. 14, 2010 would replace the narrative nutrient criteria which already were being applied by Floridas Department of Environmental Protection with arbitrary standards and questionable science, TFI said.

PROJECTS Chatham Rock Phosphate signs contract with Boskalis

CHATHAM ROCK Phosphate Limited (CRP, formerly known as Widespread Energy Limited) has undertaken the next development step of its phosphate rock project at Chatham Rise located offshore of New Zealands South Island. Last week, the company signed an agreement with Dutch integrated dredging company Royal Boskalis Westminster for Boskalis to undertake a number of projects that collectively comprise phase one of a planned work programme. CRP said in a New Zealand Exchange company announcement these projects include design engineering, logistics studies and preliminary design work as well as environmental studies including turbidity assessments. The projects are expected to take approximately six months and if successful, may lead to phase two activities incorporating final design, detailed engineering, construction and testing, said the New Zealand firm. CRP holds an offshore prospecting permit covering an area of 4,726 km 2 on the central Chatham Rise. The permit area, which is in New Zealands territorial waters, is located 450 kilometres east of Christchurch, off South Island, includes significant shallow seabed deposits of phosphate rock. The initial term of the permit is two years with rights to either extend the prospecting permit or apply for a mining licence. The establishment of an indigenous supply of phosphate rock in New Zealand would have a significant number of economic, environmental and market benefits for the countrys fertilizer producers. It would not only help to reduce rock imports, but according to CRP, Chatham Rise phosphate is lower in cadmium and uranium than is imported product.

Florida voters petition the White House on EPA water quality rule
MORE THAN 5,700 Florida voters have signed a petition urging President Obama to halt Environmental Protection Agency (EPA) efforts to implement draconian water regulations in the state of Florida, according to The Fertilizer Institute (TFI). The petition was inspired by the We the People initiative that was recently launched by the White House. By obtaining more than 5,000 signatures, the petition, which was started in the state of Florida in September, has met the signature threshold required to obtain a formal response from the White House. The language of the petition addresses the costs associated with EPAs numeric nutrient criteria rule, which several studies have estimated to be in the billions, TFI said. This rule has an enormous cost and little benefit and we are urging EPA to reconsider this action, TFI President Ford West said. We advocate smart and targeted policies that address water quality without placing an undue economic burden on farmers and the industries that support them.

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New Zealand currently imports all its phosphate rock requirements, importing 892,686 mt in 2010. Morocco in recent years has supplied the largest share of the imported volumes, shipping in 502,750 mt last year (FW Online, June 10, 2011).

Shchekinoazot seeks foreign partners for caprolactam project

RUSSIAS JSC Shchekinoazot announced October 17 that it is has started work on a project for the construction of a new a new plant for the production of caprolactam. The company said it currently is in negotiations with several foreign companies to carry out the project, which has been assigned the working name of K-100, and to establish a joint venture. The planned capacity of the proposed new unit is 100,000 mt/year. Shchekinoazot said preparatory work for the project would begin in December.

FACT to construct new sulacid plant

INDIAN FERTILIZER and chemicals company FACT has issued an Expression of Interest (EoI) inviting interested firms to undertake the construction of a new sulphuric acid plant for its Cochin production site. The new plant will have a capacity of 2,000 mt/day and will require an investment of INR 2.65 billion ($54 million). The sulphuric acid unit is part of a wider investment programme FACT is undertaking to expand and diversify in order to sustain productivity levels and improve profitability. The investment programme includes a new urea plant, an NPK fertilizer plant unit, and an SSP plant. Currently, FACT produces sulphuric acid at two of its three production sites. At Udyogamandal, the two sulphuric acid plants have nameplate capacity to produce 1.81 million mt and 1.98 million mt annually, respectively. At Cochin, there is a further 3.3 million mt/year of sulphuric acid production design capacity. Currently, FACT experiences a deficit of 800 mt/day of sulphuric acid.

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Drilling starts at Aguias Atlantic potash project

AUSTRALIAN POTASH and phosphate exploration and development company Aguia Resources Limited reported this week that drilling has commenced at the Atlantic potash project located in the Sergipe Basin in northeast Brazil. This initial drill programme will focus on the discovery and delineation of a mineral resource that can be reported in accordance with the JORC Code, the company said. Aguia Resources explained the first hole, PAC-11-0001, has been collared some 850 metres to the south east of historical well 1RPX0001DSE drilled by Petrobras that returned a 19- metre thick zone of carnallite mineralisation. The four-hole drilling programme will target Area 1 located approximately 30 kilometres to the south of Brazils only operating potash mine, Vales Taquari-Vassouras underground sylvinite mine. The project is located in one of the largest global potash markets close to existing infrastructure including roads, water, power and end-users, the company said. Each drill hole likely will take one month to complete and the programme, including mobilisation between drill sites, is expected to last approximately 5-6 months. Drilling will be conducted by San Antonio Internacional, a highly experienced operator that has drilled numerous wells within the Sergipe Basin. San Antonio Internacional has an operational office in the Aracaju area some 10 kilometres to the east of the Atlantic project. Sydney-headquartered, Aguia is focused on the exploration and development of phosphate and potash projects in Brazil.

MBAC secures BRL 205 million financing facility from BNDES

CANADIAN FIRM MBAC Fertilizer Corp. has reported the Board of Brazils Banco Nacional de Desenvolvimento Econmico e Social (BNDES) has approved a project financing facility for its Itafs-Arraias SSP project in Brazil. MBAC said on October 14 the financing will be provided on an on-lending basis by Ita BBA S.A with BNDES funds. The Ita BBA/BNDES facility is for a total of BRL 205 million ($118 million). It is comprised of a line of credit to the amount of approximately BRL 11.5 million, which

already has been advanced to MBAC, and a BRL193.5 million line of credit. Ita BBA also acted as financial advisor for the Ita BBA/BNDES facility. MBAC said it expects loan disbursements to begin immediately after the execution of transaction documents and the satisfaction of customary conditions precedent. Transaction documents are expected to be executed within 60 days. Ita BBA is the major Brazilian private bank and has expertise with BNDES financing structures. BNDES, the Brazilian Development Bank, is the main financing agent for development in Brazil. Since its foundation, in 1952, BNDES has played a fundamental role in stimulating the expansion of industry and infrastructure in the country as lender and also through its partnerships with commercial banks. In addition to the proposed Ita BBA/BNDES financing, MBAC in late September secured $40 million of project financing for Itafs-Arraias from the International Finance Corporation (IFC), a member of the World Bank Group (FW Online, October 7, 2011). MBAC said it has ordered all long lead capital items required to date for the Itafs-Arraias project, which is located near the border of Goias and Tocantins states. It said the detailed engineering is near completion, and ground clearing, grubbing and earthworks are approximately 80% complete. The civil construction is expected to start this month. The firm reported it also recently started construction of the water dam which will be required to supply water for the operations. MBAC now expects first production to begin in the early fourth quarter of 2012, marking a slight delay from an earlier target of mid-2012. The project comprises the building of a new phosphate mine and mill facility, a sulphuric acid unit, an SSP plant and a granulation unit. The new facilities will be located close to MBACs existing operation which consists of a small phosphate mine and grinding plant and related infrastructure. The firm sells the phosphate for direct application to local farmers. MBAC took over the mining and grinding operation via its acquisition of the operator, Itafs Minerao Ltda., in October 2008. At full capacity, the proposed beneficiation plant at Itafs-Arraias is expected to generate 330,000 mt/year of phosphate rock concentrate at 28% P2O5. This phosphate

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concentrate will be used to produce 500,000 mt/year of SSP. In a separate development, Greg Thompson has resigned from his position as a director of MBAC, due, the Canadian firm said, to the corporate policy at National Bank Financial, where he recently joined as executive vice president of Global Equities. His departure reduces the number of directors on the MBAC Board to eight.

Namibian Marine Phosphate completes bulk sample programme

NAMIBIAN MARINE Phosphate (Pty) Limited (NMP), a joint venture between Australias Minemakers Limited and Union Resources Limited and Namibian firm, Tungeni Investments c.c., have completed the bulk sample programme for the Sandpiper phosphate project in Namibia The bulk sample programme is a major component of the Definitive Feasibility Study (DFS) for the offshore project. Minemakers said the MV Smit Madura docked in Walvis Bay in accordance with the DFS schedule on October 4 to deliver the final batch of the bulk sample and commence the demobilisation process. During the programme, the team launched and recovered 105 grab loads, from the Atlantic Ocean offshore 3 of Namibia, using NMPs purpose-built 2.0 m mechanical grab and recovery system, explained Minemakers, adding that the area sampled is the likely first mining target in the joint ventures tenements. Approximately 265 mt of material were collected in 1.0 mt bulker bags which have been unloaded in Walvis Bay and have been road freighted to the Mintex processing facility near Johannesburg. Under Bateman Advanced Technologies Ltd., the DFS lead consultants and NMP supervision, Mintex is commissioning the pilot plant at its facility. Minemakers said the pilot plant will be used to assess whether the beneficiation plant design derived by the joint ventures work to date can be scaled up to a full commercial plant size and also produce samples for testing by potential customers. The joint ventures tenements lie in waters approximately 60 kilometres off the coast of Namibia and 2 cover a combined area of approximately 7,000 km in the regional phosphate enriched province to the south of Walvis Bay in water depths of 180300 metres.

An initial resource development programme was completed in 2009 and as at February 2010 independent estimates of the phosphate mineral resources for Sandpiper now stand at: 73.9 million mt grading 20.57% P2O5 in the indicated category and 1,507 million mt grading 18.7% P2O5 in the inferred category. Minemakers and Union Resources each hold a 42.5% direct stake in NMP, with Tungeni Investments owning the balance 15%. Minemakers holds a further small interest indirectly in NMP, via its 14.9% holding in Union Resources. Minemakers is also developing the Wonarah phosphate project in the Northern Territory of Australia.

GrowMax advances Peru MOP project

AMERICAS PETROGAS, Inc. has announced progress towards the resource assessment required to complete a technical report compliant with National Instrument 43-101 for its Bayovar potash project in Peru. The project is being developed by its wholly-owned subsidiary GrowMax Agri Corp. Forthcoming activity will complement the drilling and other data obtained last year during the previous dry period in Peru. GrowMaxs engineering and geological consultant, Ercoplan Ingenieurgesellschaft Geotechnik und Bergbau mbH (Ercosplan), will supervise the drilling of nine confirmatory exploration wells that will collectively encompass pumping/flow tests, monitoring, as well as porosity and permeability testing. A suitable mobile drilling rig has been identified and is expected to begin drilling before the end of the year subject to receipt of applicable drilling permits, which were applied for in September. The company expects to have a completed NI 43-101 technical report relatively soon after collection and analysis of the results of the production wells. GrowMax recently completed a LIDAR aerial survey of its potash concession blocks. This survey will provide the necessary 3D imaging data for optimisation of pond design. The feasibility assessment is ongoing. Ercosplan said: Based on available historical data, which were mostly confirmed by the data from the recent exploration campaign (2009 to early 2011), it is our impression that adequate potash bearing brine is present in the sand and salt rock reservoirs in the API licence areas to

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support a potash production operation with an annual capacity of 250,000 mt for at least 20 years. The results of the pilot test work in the plant inspected during the recent site visit, in our opinion, lead us to conclude that there is no doubt that it is possible to use solar evaporation of the brine from the deposit to produce carnallite that can be further processed into to a saleable potash product. The laboratory investigations on material from the test pits indicate that the surface area (overburden) is suitable for pond construction because it is impermeable and this looks highly promising for the project. GrowMax is developing a surface potash brine reservoir and evaporite deposit at Bayovar in the Sechura Desert of northwest Peru. Additional mineral potential includes phosphate, bromine and others. Americas Petrogas signed a potash offtake agreement with Kisan International Trading (KIT), a subsidiary of Indian Farmers Fertiliser Co-operative Limited (IFFCO) earlier this year (FW Online, June 23, 2011).

FREIGHT Panamax earnings hit seven-month high despite record deliveries

AVERAGE EARNINGS for Panamaxes reached a fresh seven-month high on October 19 of $16,820/day as coal cargoes in the Pacific in combination with grain-related fixing in the Atlantic have combined to improve cargo supply in both basins. Chinese coal demand again has been at the forefront of this with September trade data confirming a new quarterly high for the countrys coal imports of 49.7 million mt in the third quarter of 2011, up from 32.4 million mt in the first quarter of the year and 38.4 million mt in the second quarter. Japan is continuing its recovery from the devastating March earthquake and tsunami with the countrys coal imports reaching a 14-month high of 16.3 million mt in August. Meanwhile, in the Atlantic basin, the arrival of the US export season has added to grain-related activity out of the Black Sea (with US Gulf-Europe Supramax rates rising above $30,000/day for the first time since January), while the end of the monsoons has further boosted demand in the Panamax and Handymax sectors. Although improved levels of chartering activity have significantly firmed the market over the past two weeks, earnings in all sizes still remain below their corresponding 2010 levels, due to the continued growth in the fleet. The third quarter of this year saw a fresh quarterly record for dry bulk newbuilding deliveries, including a new monthly high for Panamaxes in September of 38 ships (3.1 million dwt). Deliveries into the Panamax fleet in the year-to-date (of 18.4 million dwt) already exceed the previous record annual total set in 2010 with a further acceleration in deliveries into the 60-99,999 dwt fleet scheduled fin 2012. This article was provided by SSY Consultancy & Research While care has been taken to ensure that the information contained in this report is accurate, it is supplied without guarantee. SSY can accept no responsibility for any errors or any consequence arising therefrom.

PEOPLE Boliden appoints new smelter head

KERSTIN KONRADSSON has been appointed to head Bolidens smelting operations, succeeding Svante Nilsson who is taking up the position of director, Group Strategic Projects. Konradsson most recently worked at the roll company, kers, as the CEO of kers Sweden AB and as divisional manager for kers casting operations in Europe and Asia. She is a member of the KERS group management team. With a degree in metallurgy from the KTH Royal Institute of Technology in Stockholm, Konradsson began her career at Elkem Scanlance in Hoganas, before moving to SSAB in Oxelosund, where she stayed for 12 years. "I'm delighted to have signed Kerstin Konradsson to our team. She has in-depth experience of the metals industry and has also been extensively involved in enhancing the efficiency of production processes - something that is very high on our agenda, here at Boliden," says Boliden's president, Lennart Evrell. Konradsson will take up her new position on February 27, 2012.

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CRU International Ltd. 31 Mount Pleasant, London WC1X 0AD, United Kingdom Fax: +44 20 7903 2139 Web: www.fertilizerweek.com Editor-in-Chief/Publisher: NATALIE NOOR-DRUGAN Tel: +44 20 7903 2421 natalie.noor-drugan@crugroup.com Senior News Editor: LYNDA DAVIES Tel: +44 20 7903 2423 lynda.davies@crugroup.com Managing Editor: MAGNUS BERGE Tel: +44 20 7903 2422 magnus.berge@crugroup.com Senior Markets Editor: LARS TAARLAND Tel: +47 515 64 869 lars@adriatic.no lars.taarland@crugroup.com Markets Editor: DAVID MAITLAND Tel: +44 20 7903 2015 david.maitland@crugroup.com Markets Editor: CHRISTOPHER SELL Tel: +44 20 7903 2142 christopher.sell@crugroup.com North America Senior Editor: BK MORRIS Tel: +1 301 441 4724 bk.morris@crugroup.com

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