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Advantages Canada

Summary

The Canadian fertilizer industry enjoys an impact far beyond the country itself, generating a contribution of $6 billion/year to the country's GDP. Two-thirds of this income comes from overseas, as described here.

Abstract

Canada more than punches its weight in world fertilizer markets, and the country enjoys unique strengths in the potash and sulphur sectors. The Canadian fertilizer industry produces about 24 million t/a of nitrogen, potash and phosphate fertilizers in some of the most technologically advanced facilities in the world, and the competitive advantages of the industry are reinforced by highly sophisticated logistical systems that make light of the considerable distances over which some of the raw materials and finished products must be transported.

The scale of the Canadian fertilizer and associated raw materials industries is re­flected in the contribution they make to the national economy. The Canadian Fertili­zer Institute (CFI) estimates that the fertilizer industry contributes over C$ 6 billion/year to the Canadian GDP, with domestic farm gate sales valued at about C$ 2 billion/year. The remainder consists of exports, and Canada exports fertilizer materials to more than 70 countries, including 95 % of its potash production.

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Sulphur at a turning point

Summary

Overnight, the prospects for the Canadian sulphur industry were radically transformed by Shell Canada's discovery of a significant sour gas field, confounding earlier forecasts that Canadian ­sulphur production was set to decline. There are other sources of industry optimism too.

Abstract

Canada is the world’s leading supplier of sulphur to international markets, and its exports of 8.36 million tonnes S of elemental sulphur in 2004 represented nearly 32 % of world trade of 26.32 million tonnes S. As shown in Fig. 1, Canada easily outranks its nearest competitors in export markets. Russia ex­ported 4.30 million tonnes S in 2004 and Saudi Arabia 2.28 million tonnes S. How­ever, the Canadian sulphur industry, which is concentrated in the provinces of Alberta and British Columbia, is at the crossroads. While production rose by 2 % on a year-on-year basis in 2004 to 8.07 million tonnes S – reversing four consecutive years of decline – the long-term forecast had been one of decline, due to the expected fall in production from sour gas.

Just one year ago, IFA had forecast that gas-related sulphur production in Canada would fall to around 5 million tonnes by 2008. However, a major sour gas discovery by Shell Canada in December 2004 and the possibility of more such finds to follow has led to major revisions of the production estimates. (Sulphur, July-August 2005, p25.) For the period between 2005 and 2009, IFA now expects output from gas plants to ease back to 6.1 million t/a.

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Gas supply woe for fertilizer industry

Summary

After the Indonesian government liberalised its gas business in 2001, the fertilizer industry has had to pay international market prices for their feedstock. The industry's problems have been ­considerably exacerbated by the diminishing availability of natural gas from the reserves in northern Sumatra and East Kalimantan. David Hayes evaluates the options open for the Indonesian fertilizer industry at this critical point in its evolution.

Abstract

Indonesia’s fertilizer industry has faced serious problems during the past 18 months as a natural gas supply crisis has forced several ammonia/urea producers to cut back production, and in one case totally suspend production, while waiting for the gas supply situation to improve. Although urea shipments to the domestic market have been largely unaffected until now, a shortage of natural gas in North Sumatra has affected Indonesia’s exportable urea surplus and has further fuelled the ongoing debate on whether gas use for fertilizer or LNG production for export should take precedence.

The worsening decline in natural gas reserves in ExxonMobil’s Arun gas field in Aceh province in North Sumatra is causing problems for both Indonesia’s urea and ­liquefied natural gas (LNG) industries. Currently, only three of the six LNG liquefaction trains at the Arun LNG plant are in operation, due to a shortage of gas supplies as gas production from the Arun field also has to be shared with nearby fertilizer plants. At full production, the LNG plant at Arun can produce 12.6 million t/a of LNG, but is currently producing only half that volume.

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Direct application ­status report

Summary

Certain types of sedimentary phosphate rock are sufficiently reactive to be effective as fertilizers when directly applied to acidic soils with no preliminary chemical processing. The combination of rock and soil chemistry and crop types that makes direct application effective and the potential for extending its use in future are examined here.

Abstract

Phosphate rocks of mainly sedimentary origin are suitable for direct application, as they consist of loosely consolidated aggregates of micro-crystals with a relatively large specific surface area. (The Use of Phosphate Rocks for Sustain­able Agriculture, FAO [2004].) How­ever, care should be taken when selecting material for use in direct application, as the rock can contain varying amounts of accessory minerals and impurities. The practice of direct application of phosphate rock (PR) as a fertilizer offers several advantages:

  • As natural minerals, PRs require minimum metallurgical processing, thus keeping the purchase cost low.
  • Being natural compounds, PRs can be used in organic agriculture.
  • PRs suitable for direct application can be more efficient than certain processed phosphate fertilizers in terms of P recovery by plants under certain conditions.
  • Based on the unit cost of P, natural or indigenous PR is usually the cheapest.

However, the practice has limitations:

  • Not all PRs are suitable for direct ­application. The effectiveness of some medium/low reactive PRs needs to be enhanced by biological and physico-chemical processes.
  • Not all soils and cropping systems are suitable for PRs of different origin. A standardised characterisation of PRs is required, as are guidelines for providing them.
  • The low grade of some PRs compared with high-grade commercial P fertilizers can make them more expensive at the point of application.
  • Sedimentary PRs show a very complex structure as a result of their different origin and even within a particular geological deposit. They can therefore have highly variable chemical constituents and may contain elements such as heavy metals.

 

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Jam tomorrow in Argentina

Summary

The announcement on 21 July 2005 that Rio Tinto via its subsidiary Rio Tinto Minerals Development Ltd. has exercised its option to acquire the entire shareholding of Potasio Rio Colorado S.A. (PRC) has put this long-mooted potash project in Argentina back in the spotlight. Two potash projects are currently under consideration in the region: in addition to the Rio Tinto venture in Mendoza province, the Brazilian company, CVRD, plans to bring a potash scheme on stream in the adjacent Neuquén province. The two projects have had a long gestation period.

Abstract

The Rio Colorado area in the Andes foothills became the object of intensive exploration activity in the early 1960s, when the goal was to seek petroleum reserves. The existence of potash deposits was first recorded in 1971, and Minera TEA S. A. was subsequently formed in 1976 to study the exploitation of one of the basins. The company’s mineral rights lie in the provinces of Mendoza and Neuquén. The company formed an initial agreement with Texasgulf Inc., and by 1983, two exploration wells had been sunk, which confirmed the existence of potash in the Rio Colorado area. A pre-feasibility study was launched soon afterwards, and plans were drawn up for the development and future start-up of potash production. Minera TEA acquired the mining rights to exploit a 300 km2 section of the deposits, which extend over an area of approximately 4,000 km2. Initial exploration of the Rio Colorado deposits revealed a lower seam, K1A, which was suitable for underground mining. K2O content was high (between 28-32 %) and insoluble content was low (1.0-2.0 %). The K1A seam had an average thickness of 2.20-2.50 m, implying that an estimated 200 million tonnes were available of exploitation.

The drilling programme and seismic analyses that were undertaken at this time led Minera TEA to conclude the existence of several seams, which in some areas merged to form an enlarged seam of 10-20 m in depth, with grades of between 20-27 % K2O. The total geological reserves were estimated at more than 1 billion tonnes KCl. Minera TEA was encouraged by the apparent quality of these reserves, which appeared to permit a high recovery rate of large crystals of 3 mm or more, thus making the production of high-quality products feasible.

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Zen and the art of AGROTAIN

Summary

A publicity exercise with a difference – Agrotain International's customised motorcycle, The Nitrogen Cycle, was unveiled before admiring delegates at the South West Fertilizer Conference in San Antonio, Texas. This is one medium that carries an important message, as Andrew Semple, VP Global Marketing, explains.

Abstract

Visitors to the South West Fertilizer Conference in San Antonio, Texas, had a big – and highly agreeable – surprise. It was there on 25 July that Agro­tain International LLC unveiled the spearhead of its new publicity campaign. This takes the form of an American Iron­Horse Texas Chopper motorcycle that has been customised to offer a themed tribute to the fertilizer industry. The bike has been adapted to make it appear that Agro­tain’s treated liquid and granular nitrogen is powering the engine, as well as being applied via a spreader spinner and spray nozzle. The bike’s name? The Nitrogen Cycle, of course...

Andrew Semple, Vice President Global Marketing for Agrotain International ex­plains: “Our products help reduce nitrogen loss to the environment while providing an economic and agronomic gain to the users of our products. We are known as the nitrogen experts, and have climbed to that level by leading and educating the industry about nitrogen loss potentials. The nitrogen loss cycle is often explained using a pictorial diagram – which is customised on the bike – so it seemed natural to name the bike The Nitrogen Cycle.”

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More US nitrogen producers set up shop

Summary

It is crunch time for US nitrogen manufacturers. The days of low-cost natural gas are over, and they face the stark choice of closing down their domestic operations or moving closer to sources of cheaper natural gas. For many of them, Trinidad fits the bill...

Abstract

The recent phenomenon of skyrocketing natural gas prices has compelled North American nitrogen fertilizer producers to move their production offshore in order to remain competitive and take advantage of cheaper gas, or else close down altogether. The production of 1 s.ton of ammonia requires approximately 33.5 mmBtu of natural gas, comprising the largest component of its cost. Nitrogen fertilizer producers are aware that each increase in the price of natural gas has a direct effect on the production cost of ammonia, with gas making up 70 % of the cost at $ 2/mmBtu and 85 % at $ 5/mmBtu. Each $ 1/mmBtu increase in the gas price raises the manufacturing cost of ammonia by $ 34/t.

Since 2001/02, gas prices have come under severe pressure in the United States, as ever-increasing quantities are required for power generation and other uses, and high domestic and industrial demand has kept prices high since the spike of 2002, when gas prices reached $ 10/mmBtu. They have subsequently fallen back, to around $ 5/mmBtu, but the most recent levels are around $ 6-7/mmBtu – far above historic levels, and reflecting the continuing upsurge in oil prices. Fertilizer producers have been forced to pay significantly more for their gas, making ammonia and urea production much less competitive. The consensus among industry insiders is that high gas prices are here to stay.

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