Fertilizer Markets and Finance

The global potash sales, according to K + S will this year “up to 58 million tons of” decline. Last year 60.2 million tons were shipped worldwide. It expects the Mutual Group, that especially in the emerging markets of Asia will be less demand for fertilizer . This should not K + S but hit as hard as Potash and Uralkali. The two rivals will depend heavily on business with China and India. K + S the other hand, makes his headquarters in Europe. Asia less than 20 percent controls the proceeds of the potassium and magnesium in business.

Above expectations

The fertilizer and salt producer K + S in the first quarter, although much less deserving than a year ago, but could exceed analysts’ forecasts. Kassel’s group recorded in the first quarter of 2012, sales fell by twelve percent to 1.44 billion euros. The operating result fell by as much as 24 percent to 281 million euros, while net profit rose 29 percent to 193 million euros.

The market environment of K + S is currently not as good as you would have thought a few weeks ago. However, the long-term growth prospects of the FTSE Group continues to be good. With a price earnings ratio of 10 2012er, the stock is rated very low. On average, the investors had in the past ten years, willing to pay 15 times the profit. Unfortunately, the stock has fallen by the decline in recent weeks under the stop of 34 €. Investors should now necessarily wait and see if the important support holds around 33 €. Currently the stock is trading slightly below that value already.

The Russian market is about to be hit by chunky inflows of cash from dividends and buybacks, $31 bln having been pledged as dividends by Russian corporates for 2011. A regulation implemented at end 2010 requires that dividends be paid to investors within 60 days of their approval at the AGM, which means dividends will be disbursed by summer’s end. Adjusted for free float, $31 bln in total translates into a $9.8 bln disbursement to portfolio investors in Russian stocks. In addition, Russian companies have announced another $11 bln in buyback programs. While the timeline of the dividend injection is no wider than the next three months, it will be an important supportive factor throughout the year, as cash disbursed to minority shareholders will be put to work in other Russian stocks. On our estimates, the total inflow from buybacks and dividends this year will be $21 bln - which, disbursed to minority shareholders, will provide a solid support for markets.

To put these numbers in perspective, dividend disbursements totaled $25.0 bln in 2011 and the free float portion was $7.0 bln; in 2010, these figures were $19.0 bln and $5.4 bln, respectively; and in 2008, they were $23.0 bln and just $6.6 bln. Thus, 2012 inflows from dividends are 48% higher than what we saw in the summer of 2008, and up 40% from last years’ total disbursements to free float shareholders.

Among the largest contributors to the dividend stream, Gazprom will disburse $7 bln in total dividends, including $2.8 bln to portfolio investors. TNK-BP will share $3.6 bln in total this year, including $186 mln to portfolio investors. Surgutneftegaz will pay out $1.6 bln to portfolio investors, Sberbank will pay $630 mln, Gazprom Neft $237 mln and Rosneft $152 mln.

Read more at BSR Russia

Brazil Potash Corp. (“BPC” or the “Company”) is pleased to announce the successful completion of a US$58.66 million capital raising to further the exploration for potash at the Company’s Amazon Basin project, Brazil. The Project is located in Amazonas State, Brazil, adjacent to Petrobras’ Fazendinha and Arari Potash deposits (see Figure 1).

Existing shareholders and new Brazilian based shareholders participated in the capital raising. One of the cornerstone investors in this round is CD Capital Natural Resources Fund II (the “CD Capital Fund”) which committed US$24.6 million of the total US$58.66 million of the fundraising. The CD Capital Fund is a private equity global natural resources fund that invests in private company mining projects that demonstrate large scale potential and require capital to execute the resource definition stage of development. CD Capital has a strong track record of identifying and investing in world class mining assets from an early stage particularly in Latin America.

Read more at Market Watch

CANBERRA May 31 (Reuters) - Australia’s government on Thursday gave environmental approval to BHP Billiton’s planned $10 billion expansion of its Port Hedland outer harbour port in Western Australia’s Pilbara region.

In a statement, Environment Minister Tony Burke said the national environmental approval included 37 conditions, including measures to protect dugongs and marine turtles, and to ensure no whales are nearby during noisy work on a new jetty.

BHP, the world’s biggest miner, had been expected to make a final investment decision on its outer harbour plan this year. The investment is crucial if BHP is to double iron ore production to 440 million tonnes a year, as planned.

After tabling back-to-work legislation in the House of Commons, federal Labour Minister Lisa Raitt says she wants to see Canadian Pacific Railway trains moving again by Thursday.

But transportation and commodity experts say it could take quite a while for CP’s rail service to get back to normal once the strike is brought to an end.

Barry Prentice, a business professor at the University of Manitoba, says that in the past only a handful of commodities were transported by train. But today “everything is moving in containers” that are often sent at least partway by rail.

As a result, the effect of the strike is “much more widespread than would have been the case in the past across the economy,” he said.

It could take more than a month for CP to clear bottlenecks along its rail lines, he said.

“When you start up a railway, you can’t just again say ‘OK everybody, get back to the trains and go,’” Prentice said. “They start to bring up one segment at a time.”

For days now, business groups have been complaining that the weeklong strike by thousands of CP workers is costing them dearly.

Grain elevators are filled with wheat while half a dozen cargo ships are waiting in Vancouver’s port to carry it abroad, the head of the Canadian Wheat Board said.

At the same time, thousands of tonnes of potash are sitting idle instead of making their way to market, according to Richard Downey of Agrium Inc. a fertilizer supplier that owns part of Saskatchewan potash exporter Canpotex.

Read more at CBC News

MILLIONS of pounds every year are to be pumped in to the Scarborough community as plans to set up a fund from the area’s proposed potash mine are revealed.

York Potash, the firm working to build a mine between Scarborough and Whitby, has announced this morning that a community fund will be set up to plough revenue from the mine directly in to local projects.

Following a £2 million initial start up donation, half a percent of revenue from the mine will be injected in to the fund annually.

Bosses at York Potash say this will equate to £3 million a year in the early stages, which would rise to £9 million a year when the mine is in full production.

The fund is to be called The York Potash Foundation, and will be run as an independent charity by a board of locally appointed trustees.

It has been set up specifically to support four main areas; education, skills and training, community facilites, and environmental initiatives.

Chris Fraser, managing director of Sirius Minerals, the parent company of York Potash, said: “We had always planned to put something like this in place as we want to extend the project into the community.

“We want the mine to have a positive, lasting legacy financially for the community.

“I look forward to the day when we have got someone graduating from university with a degree funded by The York Potash Foundation.

“We really want this to make a meaningful difference to people locally.”

Plans for the mine, which is set to create 1,500 jobs directly, were announced in January last year.

York Potash has since been carrying out test drilling in the area to determine the quality and amount of potash, as well as geographical studies to help locate the minehead.

The company hopes to submit the first planning application for the mine, which could be situated in the North York Moors National Park, by the end of year.

If permission is granted York Potash hopes to have the mine in production by 2017.

UralChem Holding Plc, a Russian fertilizer maker, said first-quarter profit doubled as its acquisition of OAO Perm Mineral Fertilizers boosted output.

Net income rose to $352 million from $173 million a year earlier, UralChem said in a report posted yesterday on its website. Sales climbed 19 percent to $673 million.

The company agreed to buy Perm Mineral Fertilizers in December, acquiring a 51 percent stake from Sibur Group in a bid to increase urea and ammonia production amid rising prices.

Net debt was $1.08 billion as of March 31, UralChem said.

To contact the reporter on this story: Ilya Khrennikov in Moscow at ikhrennikov@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

Belarusian President Aleksandr Lukashenko plans to discuss expanding Belarusian Potash Co., the trading arm of Russia’s OAO Uralkali, with Vladimir Putin when his Russian counterpart visits this week.

Lukashenko is looking at “intensifying our joint work on selling potash fertilizers, as well as potentially expanding this company and assigning it more functions for selling nitrogen, phosphoric fertilizers, involving volumes from Russian companies,” he said in an e-mailed statement today after meeting with Belarusian Potash Director-General Valery Ivanov.

Belarusian Potash is a joint venture between Uralkali, the world’s largest producer of the crop nutrient by output, and the Belarusian state.

To contact the reporter on this story: Aliaksandr Kudrytski in Minsk, Belarus atakudrytski@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

Soc. Quimica & Minera de Chile SA, the country’s biggest fertilizer producer, said first-quarter profit rose 35 percent as rising iodine prices boosted revenue.

Net income climbed to $150 million from $111 million a year ago, according to data posted today on the website of Chile’s securities regulator. Sales from iodine operations jumped 53 percent to $144 million while potash sales rose 6.6 percent.

Prices of iodine rose 10 percent in the first quarter from the previous three months on growing demand for its use in X-ray equipment and pharmaceutical products, SQM said in an accompanying statement. The company controlled by billionaire Julio Ponce produces iodine, lithium and potash from salt flats in Chile’s Atacama Desert.

“Iodine and lithium markets continue to be strong and in line with expectations in both demand and pricing,” Chief Executive Officer Patricio Contesse said in an e-mailed statement. “Fertilizer market volumes followed the trend we saw during the fourth quarter of 2011 and in recent weeks we have started seeing positive indications.”

Sales at SQM’s lithium unit rose 12 percent to $47.5 million from a year earlier as prices rose 16 percent during the quarter, the company said.

To contact the reporter on this story: Matt Craze in Santiago at mcraze@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net

Agrium Inc. agreed to pay the maximum fine and pleaded guilty Monday to violating the province’s Occupational Health and Safety regulations in connection with the death of an electrician at the Vanscoy potash mine in 2010.

Edward Artic, 59, died May 11, 2010, after being struck in the head by part of a load being lifted in the facility’s above-ground mill.

Agrium pleaded guilty in Saskatoon provincial court to failing to maintain a working environment that ensured the health and safety of Artic. It was fined $300,000 plus a victim surcharge of $120,000, for a total of $420,000.

“We wish we could take back what happened that day,” said Mike Dirham, general manager of Agrium’s Vanscoy potash operation, in court.

About 24 members of the Saskatchewan Potash Council, which has members from unions at all potash mines in the province, were also in court Monday.

“We’re pleased they decided to put an end to it,” said Darrin Kruger, president of United Steelworkers Local 7552, the union to which Artic belonged.

Agrium lawyer Michael Tochor outlined in court a number of measures Agrium took following the incident. He said Agrium has spent $3.6 million on renovations and safety policy development. Agrium also created an on-site memorial that cost $37,000 in honour of Artic, Tochor said.

Agrium initially faced four charges in relation to the fatality. The remaining three charges were stayed.

OTTAWA — The federal government will force striking workers at Canadian Pacific Railway back to work with fast-track legislation aimed at restoring rail service by Thursday, Labour Minister Lisa Raitt said on Monday.

The government introduced the legislation in the House of Commons on Monday to end a work stoppage by 4,800 locomotive engineers, conductors and rail traffic controllers at CP Rail, Canada’s second-biggest railway.

“From past precedent, we’d like CP Rail continuing to roll on Thursday. But we’d like it sooner, quite frankly, and that’s the message today,” Raitt said in Ottawa, flanked by Canada’s ministers of transport, energy, agriculture and industry.

The unionized employees have been on strike since May 23 over pension issues and work rules, shutting down CP Rail freight operations across Canada for nearly a week. The latest round of mediated talks between the company and workers broke down at the weekend.

The government fears the strike could hurt an economy still recovering from recession. Raitt has said a strike would cost $540 million in economic activity each week.

Read more at The Vancouver Sun

Talents must be claimed at home, said President of Belarus Alexander Lukashenko at his meeting with gifted pupils and students, representatives of the best young talents. According to him, Belarus has made talent and intellect as a priority of development, while a national system for identifying and developing young talent has been running in the country for the second decade already.

President noted that Belarus’s neighbors had just started to develop such systems, BelTAinforms.

Alexander Lukashenko also said that on the eve of the meeting he’d requested the experts to find out why the results of the country’s data bank of talented and gifted students did not meet the requirements. The president called these results sad.

The President recalled that he’d asked to create a data bank of talented youth that is in demand in various fields. Today, more than 5.5 thousand people are included in the bank, said Education Minister Sergei Maskevich.

According to the president, no one can tell how many of these 5.5 thousand talented people work in the country by vocation. “Unfortunately, the state and the entrusted government officials perform their responsibilities very poorly in this area. And we’ll fix it,” Alexander Lukashenko assured.

Read more at Telegraf.by

Uralkali bought back 4,557,000 shares at an average price of $6.89 each and 609,706 global depositary receipts at an average price of $34.36 apiece in the week ending 25 May.

Macquarie Group extended its ties with the physical commodities market by buying a stake in Czarnikow, the sugar and ethanol specialist, in the latest of a series of stake purchases in trading houses.

Macquarie purchased 42.5% of Czarnikow, matching the stake owned by Associated British Sugar, the UK sugar producer owned by Associated British Foods.

The balance of London-based Czarnikow, an advisor, supply chain manager and trader in sugar, is owned by its employees.

The deal follows Macquarie’s acquisitions, in agricultural commodities, of stakes groups such as Quadra, the Swiss-based grain trader, besides, in other raw materials, significant stakes in gas traders including US-based Constellation Energy.

Scope of ambitions

However, Macquarie is not expected to use Czarnikow as a route to expanding its presence in physical commodities, as some other large institutions have done.

Czarnikow three years ago unveiled an alliance with Deutsche Bank to trade physical sugar cargoes, although more recently banks have lost a series of commodities staff to physical trading houses such as Trafigura and Vitol.

Earlier this month Roger Jones, Barclays former global head of commodities, revealed his defection to Mercuria.

Read more at Agrimoney

Western Australia joined the list of major grain-producing areas where crops are under threat of dry weather, which has already killed some canola crops, even as rains refreshed many eastern areas of Australia.

Many growers in Western Australia, Australia’s top arable state, have stopped their autumn sowing campaign because of the persistence of dry conditions which farm officials warned of three weeks ago, noting then that many areas had “very low levels of plant available water leading into winter”.

The conditions, which Commonwealth Bank of Australia on Monday termed “unfavourably dry”, have prevented seeds germinating in many areas, and in some others withered many crops which have sprouted.

“It is not really that good at all,” Australia & New Zealand Bank analyst Paul Deane said.

“Emergence is pretty patchy. Crops are certainly not off to a good start.”

Rapeseed setbacks

The problems are seen besetting in particular canola and malting barley varieties, which are earlier sown that wheat, and for which planting windows are ending.

“Wheat has still got plenty of time,” Mr Deane told Agrimoney.com.

Read more at Agrimoney

Stocks to watch on the Australian stock exchange on Tuesday, May 29

BHP - BHP BILLITON LTD - up 44 cents at $32.05

A mining giant will not comment on rumours it is considering locking out striking workers amid a bitter industrial dispute in central Queensland.

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FXJ - FAIRFAX MEDIA LTD - up two cents at 64.5 cents

Mining magnate Gina Rinehart is believed to have lifted her stake in Fairfax Media and questioned the abilities of the company’s chairman Roger Corbett in the process.

HST - HASTIE GROUP LTD - in suspension, last traded at 16 cents

Fears are held for the jobs of 2,700 Australian workers stood down from troubled engineering firm Hastie Group, but the administrator hopes most will return to work.

OZL - OZ MINERALS LTD - up 19 cents at $8.31

The head of Australia’s third-largest copper producer, Oz Minerals, has predicted that prices for the commodity will return to record highs as a lack of new discoveries leads to a supply shortage this year.

Read more at The Sydney Morning Herald

OTTAWA — The federal government is raising the monetary threshold for a review of a foreign takeover of a Canadian company to $1 billion from $330 million over a four-year period.

Ottawa is also creating a formal mediation process under the Investment Canada Act that will offer a voluntary means of resolving disputes when the minister believes a foreign buyer has failed to live up to its obligations.

“Canada has a strong investment climate and these targeted changes will ensure that our foreign investment review process continues to encourage investment and spur economic growth,” Industry Minister Christian Paradis said in a statement Friday. “Foreign investment is vital to the Canadian economy. It helps Canadian companies find new capital and enables them to expand, innovate and create jobs for Canadians.”

The details released Friday follow a promise last month by the federal government that it would provide more disclosure on decisions to block foreign takeovers that it judges would be detrimental to Canadian interests.

Ottawa also said it would accept security bonds from foreign companies should a court levy penalties on a foreign investor for breaking contractual commitments.

The long-promised update to the rules follow a decision in 2010 by then industry minister Tony Clement to veto the takeover of PotashCorp. by Anglo-Australian mining firm BHP Billiton. It was deemed that the takeover did not meet the key “net benefit” test, a closed-door review of whether a particular investment would benefit Canada.

Opposition critics said Friday that the government did nothing to clarify what a net benefit would be in the regulatory changes.

Read more at Herald Business

The last vestiges of Canada’s iconic farm co-operatives will likely head toward extinction Tuesday when shareholders of Viterra Inc.(VT-T16.02-0.01-0.06%) vote on a takeover bid from Swiss-based Glencore International Inc.

Viterra’s roots go back nearly 100 years to the days when farmers across the prairies banded together to sell their grain. That led to the creation of the Saskatchewan Wheat Pool, which, after some acquisitions, became Viterra in 2007.

Today, Viterra is Canada’s largest grain handling company with operations in Australia and the United States. It also runs a chain of 258 retail stores across Western Canada selling farm supplies.

Glencore, which is better known as a global commodities trader, made an all-cash offer for Viterra in March worth $16.25 a share, or $6.1-billion in total. To make its bid more palatable to Canadian regulators, Glencore struck side deals with Winnipeg-based Richardson International and Calgary-based Agrium Inc. Under those deals, Richardson will purchase 19 of Viterra’s 92 Canadian grain elevators and Agrium will acquire most of Viterra’s retail stores.

Read more at The Globe and Mail

It’s a challenge of historic proportions.

Given the way in which our world’s population is soaring, “over the next 40 years, we need to grow crop output by the same order as over the last 10,000 years,” Darrell Zwarych, vice-president of finance, potash, for The Mosaic Company, told a Saskatchewan Mining Week gathering Friday morning in Regina.

The fertilizer giant plans to rise to the challenge.

As Zwarych told a joint meeting of the Association of Professional Engineers and Geoscientists of Saskatchewan and the Saskatchewan Chamber of Commerce, Mosaic has a $6-billion program of expansion for its Saskatchewan facilities that mine the fertilizer potash.

Mosaic, formed from the 2004 merger of Cargill’s crop nutrients arm and IMC Global, is already the world’s largest combined producer of potash and phosphates in the world; in potash alone, it is the thirdlargest producer in the world with 12 per cent of the world’s production and annual production capacity of 10.3 million tonnes.

But more is needed.

And that’s why Mosaic - which has Saskatchewan mines at Belle Plaine, Colonsay and Esterhazy - has embarked on a long-term expansion program that will take its annual production capacity here up to 16.5 million tonnes of potash by 2021, said Zwarych, who added the 16 distinct projects within this plan are on schedule and on budget.

Read more at Leader Post