Fertilizer Markets and Finance

NEW DELHI/MUMBAI (Reuters) - India on Wednesday decided to cut the subsidies on phosphate and potash-based fertilisers in the fiscal year that began in April in an effort to rein in its fiscal deficit.The

It will also limit India’s imports of potash and phosphate. India imports all its potash and also buys about 90 percent of its phosphate from abroad.

The subsidy for diammonium phosphate (DAP) has been cut by 14 percent from a year ago to 12,350 rupees per tonne for 2013/14, and for muriate of potash (MoP) by 21.5 percent to 11,300 rupees per tonne, the government said in a statement.

Read more at Reuters

If you like the long-term outlook for potash, you’ve just got to be a fan of another key fertilizer ingredient: phosphate.

Investment maestro Jeremy Grantham has a fond spot in his heart for it. There’s even a lively debate over whether we should be worried about “peak phosphate,” the idea that much of the easily and cheaply mined ore containing the compound has been extracted, leaving the world vulnerable to long-term shortfalls in a critical plant nutrient.

Read more at Globe and Mail

Mosaic (NYSE:MOS) — North America’s largest phosphate producer — saw its net sales fall to US$2.5 billion in the second quarter of fiscal 2013, down $500 million from last year on the back of lower phosphate and potash volumes and lower phosphate prices, the companyannounced last week.

Sales in the company’s phosphate segment, which accounts for the largest share of its revenue, were $1.8 billion in the second quarter, with 3 million metric tons (MT) sold at an average price of $544/MT. The company said that diammonium phosphate fertilizer prices have fallen 11 percent since the same period last year, when FOB prices in Central Florida were $611/MT.

Third-quarter phosphate sales are expected to fall to between 2.5 and 2.8 million MT, with prices dropping to between $485 and $515/MT, as most buying is done in advance of the northern planting season, notes Mosaic’s report.

Falling export sales were the biggest driver of depressed phosphate sales for the Plymouth, Minnesota-based company. Increased domestic sales have cushioned the fall in international demand, despite transportation difficulties due to low water levels on the Mississippi River, a key transportation route to agricultural markets in the US Midwest.

Read more at Potash Investing News

PhosAgro, one of the world’s leading phosphate fertilizer producers, has signed a deal to buy a 20 percent state stake in apatite concentrate maker Apatit, PhosAgro said on Monday.

PhosAgro, the world’s third largest producer of ammophose and diammonium phosphates and apatite concentrate, offered the highest price of 11.11 billion rubles ($360 million) for the state package of 26.67 percent of ordinary shares or about 20 percent of the authorized capital of Apatit at a September 4 tender.

“We are extremely pleased to have won the contest for this strategic asset and avoid a potential conflict with other shareholders,” PhosAgro CEO Maxim Volkov was quoted as saying in a statement.

Russian fertilizer maker Uralchem, PhosAgro and the Renova group of companies and Trust National Bank were among other bidders for the Apatit state stake.

Apatit accounts for 75 percent of apatite concentrate production in Russia.

PhosAgro raised hopes for phosphate demand by revealing that India, the top importer, had signed off on purchases well beyond the 500,000-700,000 tonnes revealed by North American exporters.

India had in fact signed a “1m-tonne contract” at the start of the month, the Russian fertilizer group said.

And “contracts for over 2m tonnes have been signed since then”, PhosAgro said.

The company declined to reveal further information on the contracts, although Agrimoney.com has learned separately of talk of India buying significant volumes too from China and Saudi Arabia’s Ma’aden.

Such purchases will ease a major concern over the announcement by North America’s PhosChem consortium at the start of the month of a500,000-700,000-tonne deal - that it was short on quantity, if firm on price, at $580 a tonne.

Read more at Agrimoney

Russia’s Natural Resources Ministry urged fertilizer maker OAO Acron to change the planned transportation route for its phosphate project in the Murmansk region to bypass a nature reserve being created in the area.

The government plans to set up the Khibiny nature park in northwest Russia near Acron’s Partomchorr phosphate deposit, the ministry said on its website.

Acron is in touch with state officials and will consider alternative routes, company spokeswoman Elena Kochubey said by telephone.

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

TORONTO, April 23, 2012 /CNW/ - MBAC Fertilizer Corp. (“MBAC” or the “Company”) (TSX:MBC) (OTCQX:MBCFF) is very pleased to announce the results of the Prefeasibility Study (“PFS”) for the Company’s 100% owned Santana Phosphate Project (“Santana” or the “Project”) located in the southeast of Para State, Brazil.  The PFS is based on an updated mineral resource estimate that includes drilling completed up to January 2012 (see press release dated March 5, 2012). A technical report, prepared in accordance with National Instrument 43-101, will be posted on SEDAR by no later than June 7, 2012.  The PFS was completed by PegasusTSI Inc. inTampa, Florida, Andes Mining Services, in Lima, Peru and NCL Brasil Ltda., in Minas Gerais, Brazil.

Read more at Mining.com

So what is happening with the big phosphate project in Guinea Bissau, the small former colony that won its independence from Portugal in 1974? The government has been overthrown and - once again - the army is in control of the country from the capital, Bissau.

The military junta said it will wait two years before handing back fully power to civilians.

When similar action was taken in Mali just a few weeks ago to remove the government in Bamako, most of the mining and exploration companies operating in that country made statements to the Toronto, Australian or London stock exchanges on the status of their projects after the military coup by the Malian army. Most sent out follow-up reports as the impact of the Mali coup become more apparent.

But so far Plains Creek Phosphate Corp. (TSX:PCP) has not issued any report to the Toronto exchange. Of course it may not yet know how its agreement with the former government will be affected.

Read more at Potash and Phosphate

Aguia Resources (ASX: AGR) announced that it would temporarily suspend potash exploration to focus on the development of its phosphate property at the Tres Estradas Phosphate Project, in the state of Rio Grande Sul. Aguia wants to intensify work at the Tres Estradas operation (‘TE’), where beneficiation is under way and independent consultants are preparing a mineral resources estimate in conformance with the JORC code NI43-101 standards. The latter documentation should be ready in June. Drilling at TE has led to the discovery of new early stage phosphate similar to the carbonatite deposits produced by Vale in Brazil. Aguia is also preparing to test drill the Joca Tavares site, which is close to TE. Aguia sees opportunities in the fact that its phosphate projects are located in some of Brazil’s most important fertilizer consuming states/markets. Rio Grande, and neighboring Santa Caterina and Parana account for 30% of Brazilian consumption, while there are no active phosphate mines in the three southern states. Evidently, Aguia will have an advantage in getting its phosphate to market, seeing the closest active phosphate mining projects are based in Minas Gerais, much further north. Upon confirmation of the favorable beneficiation results, Aguia will proceed with the production of concentrated rock phosphate.

Read more at Potash and Phosphate

OAO Acron (AKRN) will make phosphate at the Russian fertilizer producer’s project in Murmansk region from July, and study setting up rare earth output at the site.

The company, based in Velikiy Novgorod, plans to achieve full capacity for production of apatite concentrate, a form of phosphate, at the Oleniy Ruchey project by the end of the year, its press office said today by phone, citing comments by Chairman Alexander Popov at a ceremony at the facility.

Acron is also studying producing rare earth metals such as neodimium and lanthanum from ore at the site, the office said.

Acron, a nitrogen fertilizer maker controlled by Russian billionaire Viatcheslav Kantor, is diversifying into phosphates and potash to be self-sufficient in the production of so-called NPK complex fertilizers. The company is seeking investors for a 29 percent share of its Talitsky potash project in Perm region after VEB, Russia’s state development bank chaired by Vladimir Putin, agreed to buy 20 percent of the deposit in December and provide a $1.1 billion loan for development, the office said.

Read more at Bloomberg

Sees strong demand growth over long-term supported by relatively high commodity prices and profitable farm economics. Sees “nearly all” of projected demand and capacity growthoutside North America. Sees N.A. industry remaining a large and stable producer and exporter. Comments from slides for CRU Phosphates 2012 International conference.

Following months of sluggish potash and phosphate fertilizer prices, signs of a renewal in US potash demand means potash prices may soon recover.

Brazil, now the envy of debt-ridden nations, is scrambling to strengthen its control over domestic food production. This move became a matter of national security as the country saw 2008’s increased fertilizer prices threaten its agricultural sector. The result has been a flurry of activity from the domestic mining community and major tax incentives provided by the Brazilian government for two reasons: agriculture accounts for 1/3 of Brazil’s economy and yet the country still imports 50% of its phosphate and 90% of its potash. Brazil is also the second largest importer of phosphate globally as a result of it being the world’s leading agrarian country.

Of the Canadian miners vying for a slice of the Brazilian landscape, we have closely followed Eagle Star Minerals Corp. [EGE – TSX.V], whose recent acquisition of a new phosphate project in the Parnaiba Basin has further strengthened the Company’s portfolio. EGE’s previous work on its Ruth Project led to the discovery of the nearby Samba Project, which is now the Company’s flagship operation.

The 100% owned Samba Project has all the right characteristics of a company maker. Lying close to the Ruth project, the Samba consists of 60 mineral claims covering 109,285 hectares within the western portion of the Piauí state, strategically located near Valença and São José do Peixe. This area includes the Balsas and Bom Jesus Agricultural Centres and is host to a large soy industry with production of over 2.3 million tonnes annually.  As well, the project is only 100km from the Transnordestina railroad, which, when completed in 2013, will connect the region to the three major ports in North Eastern Brazil. This location will enable EGE to not only supply phosphate to the local market but to other possible markets as well.

Fertiliser