HOUSTON (ICIS)–Fertilizer producer Harvest Minerals announced it has signed a technical cooperation agreement with PVW Resources Limited, an Australian company specializing in the advancement of rare earth element projects. The company said this collaboration aims to unlock the rare earth element potential at the Arapua project in Brazil, with the intention of progressing on the asset if results of the fully funded work programs continue to be favorable. Under the terms, PVW will provide technical expertise for the evaluation of the rare earth element potential of Arapua including reviewing historical data and identifying new targets for resource potential. Results to date have been positive for Harvest Minerals with the next batch due in October with the data from these results the basis for the next stages. The ongoing rare earth element work program at Arapua includes re-assaying a large set of rock samples and drilling data to further detail the mineralization. Upcoming there will be planning for additional drilling for resource expansion and the evaluating of processing methods and beneficiation processes to substantiate the preliminary findings. The company did say if their fertilizer interests are not impacted by this agreement. At Arapua it has been primarily focused on producing their organic, multi-nutrient fertilizer branded as KP Fertil, which is typically applied in Brazil in lieu of more traditional phosphate fertilizer inputs. “This partnership opens the door to realizing the rare earth element potential of Arapua, adding further value beyond our established low-cost, high-margin fertilizer business,” said Brian McMaster, Harvest Minerals chairman. “Brazil has emerged as a major player in the international rare earth element space and PVW is already making inroads into that space. We are extremely fortunate that they have seen the potential at Arapua and agreed to team with us.”

HOUSTON (ICIS)–Canadian junior explorer Nevada Organic Phosphate (NOP) announced that their subsidiary Nevagro, has been informed by the Bureau of Land Management (BLM) that the agency is authorizing the Murdock Mountain Phosphate Exploration project. British Columbia based NOP said the BLM found no significant impacts and so the preparation of an Environmental Impact Statement (EIS) is not required. This decision approves the exploration plan portion of the prospecting permit application submitted to the BLM with prospecting permit to be issued separately. “The next step in the process will be a request from the BLM to submit a reclamation bond. In accordance with US Federal Regulation 43 CFR § 3504.50, a reclamation bond will be required once the official decision is made to approve the Prospecting Permit Application,” said Robin Dow, Nevada Organic Phosphate CEO. NOP aims to be one of the only certified organic rock phosphate producers with large-scale potential in North America and is currently advancing on the Murdock project, which contains a nearly flat lying sedimentary bed of known phosphate mineralization in northeast Nevada. The company said the increasing interest in organic and sustainable agriculture practices has contributed to the demand for organic fertilizers, including those derived from rock phosphate. Organic rock phosphate is often marketed as a fertilizer that not only provides phosphorus but also contributes to overall soil health.

HOUSTON (ICIS)–The Fertilizer Institute (TFI) told the US Surface Transportation Board (STB) in testimony on Tuesday that there is an ongoing need for the freight rail industry to shift its focus toward customer service and growth. The industry group said the fertilizer segment has long relied on rail service for the efficient and safe transport of its products, but it has struggled with declining service quality, increasing rates and a lack of attention to customer needs. “The fertilizer industry is heavily reliant on rail and cannot afford to see continued stagnation in freight rail service,” said Ryan Bowley, TFI vice president of government affairs. “Unfortunately, we have seen freight volumes plateau, services decline and rates skyrocket.” TFI said that their testimony comes at a pivotal time for the Class I railroads as the STB’s inquiry into the rail industry’s growth potential highlights a disturbing trend, which is that freight rail carloads have been in decline since 2008. Trucking and other transportation sectors have consistently expanded their capacity. At the same time that rail employment has dropped, and carloads have declined, rail rates have surged. TFI said between 2005 and 2017, rates for transporting critical farm inputs like anhydrous ammonia increased by over 200%. It noted that such price hikes, combined with inconsistent service, have made it difficult for fertilizer companies to meet the just-in-time delivery demands of farmers across the country. “These rising costs and service failures are particularly troubling for industries like ours, which depend on rail to move bulk products safely,” Bowley said. “Our members regularly face delays, held shipments and escalating rates, often without any recourse. It is clear that a new approach is needed.” TFI highlighted the need for the rail industry to pivot toward a customer-focused, growth-driven model that balances profitability with service quality as the industry’s adoption of Precision Scheduled Railroading has led to deep cuts in staff and equipment and adding to service issues. The group did praise recent moves by the STB to increase oversight of rail service and pricing, including the implementation of faster emergency service orders. It did stress the importance of additional reforms such as expanding access to reciprocal switching, a policy that would allow shippers to switch between competing rail carriers more easily. “The rail industry should be actively competing for freight, not relying on captive customers to drive revenue. We need a system where railroads are not just collecting more revenue from a shrinking base but are growing their business by serving more customers with better service,” Bowley said.

HOUSTON (ICIS)–US ammonia-to-power solutions provider Amogy has announced a partnership with HD Korea Shipbuilding & Offshore Engineering, POSCO Holdings, Seoul National University and the American Bureau of Shipping to explore the feasibility of an innovative offshore ammonia cracking solution to deliver low-cost, accessible clean hydrogen fuel. Amogy said under this partnership, HD Korea Shipbuilding will design the ammonia supply system and integrate it into the overall system, and it will provide its ammonia-cracking technology. Seoul National University will contribute expertise in process design and simulation, while POSCO Holdings intends to harness its proprietary cracking process design technology to optimize the systems needed for ship application. The American Bureau of Shipping will oversee certification of the design as the class society. Amogy said ammonia, a hydrogen carrier, offers a more cost-effective and convenient alternative to liquefied hydrogen due to its established storage and transport infrastructure. Additionally, with energy density 2.7 times greater than hydrogen, ammonia is emerging as an optimal carbon-free fuel for the maritime industry. Further, the company said their technology unlocks the potential of ammonia as a hydrogen carrier by leveraging state-of-the-art catalyst materials to crack ammonia into hydrogen and nitrogen at lower reaction temperatures with high durability thereby reducing heating and maintenance requirements. “We are excited to join forces with this esteemed consortium to develop an innovative offshore ammonia cracking solution,” said Seonghoon Woo, Amogy CEO. “This partnership marks a pivotal advancement in leveraging ammonia to achieve net-zero emissions.”

SAO PAULO (ICIS)–The likely increase in Brazil’s import tariffs for dozens of chemicals will start improving beleaguered domestic producers’ poor margins even though petrochemicals prices remain low, according to an analyst at US credit rating Fitch. Marcelo Pappiani, credit analyst for Brazilian chemicals producers, added that imports into Brazil and the wider Latin America remain high and are likely to continue that way as China and the US work through their overcapacities. Despite that, prices have stabilized, albeit at low levels, and “the worst of this downturn” seems to have subsided, said Pappiani. The two largest chemicals producers in Brazil, polymers major Braskem and chlor-alkali and polyvinyl chloride (PVC) producer Unipar, are covered by Fitch. The two companies have posted several quarters of poor financial results on the back of low prices and competition from overseas producers. TARIFFS UPBrazil’s chemicals producers – represented by trade group Abiquim, in which Braskem has a commanding voice – were hoping the Brazilian cabinet would increase import tariffs on dozens of chemicals in September. However, there have been contradictory reports on this, with some expecting the hike to be approved as soon as Wednesday (18 September), while other reports citing government sources have said the decision would be pushed back to December. The increases would follow a public consultation earlier this year in which Abiquim as well as individual companies proposed increasing tariffs in more than 100 products, most of them from 12.6% to 20%. Braskem is, at the same time, partly owned by the country’s state-owned energy major Petrobras, so the Abiquim/Braskem lobbying tandem tends to find open ears in the corridors of power in Brasilia under the current government, which has committed to expand the industrial sector. Pressure not to increase import tariffs has also been strong from other sectors, not least plastic transformers represented by Abiplast, but the producers’ proposals are expected to have won the day. “Petrochemicals prices in Brazil and the wider Latin America seem to have reached the bottom and we are seeing slightly less pressure on companies, despite of course still imports coming into the region in big numbers, from China, the wider Asia and the US,” said Pappiani. “Companies have lobbied the government strongly for an increase in import tariffs as well as other measures to prop up the chemicals industry. Import tariffs seem set to increase and that should soon make Brazilian producers more competitive.” Pappiani is in no doubt higher import tariffs in several chemicals – when around half of the Brazilian industry’s demand is covered imports – are likely to translate into higher prices for consumers, precisely the reasoning used by those who oppose the hike. “President Lula has said he wants to foster the chemicals sector and has met on several occasions with CEOs from the industry as well Abiquim,” said Pappiani. “But, of course, consumers will end up paying for higher import tariffs – this happens in all economic sectors, not just petrochemicals, of course.” COMPETITIVENESS THROUGH TARIFFSAs well as higher prices for consumers, those opposing the hike in import tariffs argue that Brazilian petrochemicals producers should speed up their modernization and diversification, so they are not as dependent on government policy for their profitability. Pappiani said Braskem is a well-managed company with international assets which would make it a profitable enterprise even without government measures which prop up its competitiveness in its domestic market. However, critics of protectionist measures continue their campaign against the increase in import tariffs, although according to most analysts the dice has been cast. On Tuesday, the president of Abiplast published a charged article in Brazil’s daily Estadao in which he wondered if Braskem would always need state indirect help to keep afloat, even if its second largest shareholder is Petrobras, which in theory should make accessing cheaper raw materials easier. “Why are foreign suppliers of petrochemical products able to be more competitive in their exports to Brazil, even bearing the costs of transportation, logistics and exposure to exchange rate variations? Over the past 40 years, we have exported many of these products to China; if the Chinese (and other countries) become competitive by importing Brazilian oil, why can’t Brazilian [petrochemicals] producers become competitive?” said Jose Ricardo Roriz Coelho. “The exaggerated protection of the few petrochemical companies in Brazil results in them directing investments to countries where they face greater competition in order not to lose market share. Europe, which is not competitive due to its lack of raw materials for petrochemicals, has chosen to add value further down the production chain by importing resins from countries that are more efficient in production. “Structural problems, such as insufficient supply of inputs, cannot be solved with short-term remedies. The debate on new tariffs and the production chain is crucial,” concluded Roriz. Indeed, the prospect of high import tariffs being approved as soon as this week has already propped up Braskem’s market capitalization in the past few weeks. On 13 September, for instance, the company’s stock rose by nearly 8% as investors expect an imminent decision on the increase in import tariffs, according to a report by InfoMoney. The increase in import tariffs could automatically translate into higher earnings before interest, taxes, depreciation, and amortization (EBITDA) for Braskem, to the tune of $300 million/year, according to some analysts. Under current business conditions, that would be roughly the same EBITDA amount the producer posted in the second quarter of this year. “In our view, this additional tariff would help contain Braskem’s cash burn in recent quarters. The company would then be better positioned to capture a future cycle of increases in petrochemical spreads,” said analysts at XP cited by InfoMoney. Front page picture: Facilities operated by Brazilian polymers major Braskem in the state of Sao Paulo Source: Braskem Interview article by Jonathan Lopez 

BARCELONA (ICIS)–Petrochemical markets are likely to remain depressed while China and other countries continue to add significant capacity, unless big wave of closures and demand improvement help to achieve balance. Global capacity additions far outstrip demand growth China, Middle East, US likely to continue expansions China drove the petrochemical supercycle, but no longer China chemicals demand growth likely only 2-4%/year Prospect of global deflation Europe can focus on specialty chemicals, other niches In this Think Tank podcast, Will Beacham interviews ICIS Insight editor Nigel Davis, ICIS senior consultant Asia John Richardson and Paul Hodges, chairman of New Normal Consulting. Editor’s note: This podcast is an opinion piece. The views expressed are those of the presenter and interviewees, and do not necessarily represent those of ICIS. ICIS is organising regular updates to help the industry understand current market trends. Register here . Read the latest issue of ICIS Chemical Business. Read Paul Hodges and John Richardson’s ICIS blogs.

Ursula von der Leyen announces key energy roles for Denmark, Spain and the Netherlands Teresa Ribera will oversee delivery of the bloc’s Green Deal, with former Danish energy minister Dan Jorgensen to take the energy brief Parliamentary hearing needed to confirm candidates in post LONDON (ICIS)–European Commission president Ursula Von der Leyen named former Danish energy minister Dan Jorgensen as her pick for the energy brief on 17 September, as she unveiled the structure of the incoming College of Commissioners. The role is likely to work closely with big green portfolios for Spain and the Netherlands, as von der Leyen presented a leaner, more cross-cutting college than in the previous mandate. Spain’s Teresa Ribera, one of six executive vice-presidents, will be responsible for a “clean, just and competitive transition”. Her work will involve ensuring the EU stays on track to meet its goals under the bloc’s Green Deal and proceed with both decarbonising and industrialising the economy in parallel. Ribera has been Spain’s ecological transition minister since 2018, a role which covers both energy and environmental policy. She was a key figure in finalising a number of energy files, including the electricity market reforms, when Spain held the rotating EU presidency in the second half of 2023. Ribera will also pick up responsibility for competition policy from outgoing Danish commissioner Margrethe Vestager. Current Dutch commissioner Wopke Hoekstra will retain the climate brief he has held since August 2023, becoming commissioner for “climate, net-zero and clean growth”. His responsibilities will include climate diplomacy and decarbonisation, alongside implementation and adaptation. The former Dutch finance minister will also pick up responsibility for taxation. Jorgensen’s work will focus on lowering energy prices, investment in clean energy and cutting dependencies. His brief will also cover housing, which covers aspects including energy efficiency. Von der Leyen told reporters that Jorgensen’s broad experience as an energy minister made him a good fit for the role. She pointed to topics including the energy crisis, building an energy union and lessening Europe’s dependence on fossil fuels as key agenda items, alongside deepening Europe’s interconnections and supply corridors. Von der Leyen also said Jorgensen was well suited to continue work on joint energy procurement, which she called “one of the top topics to increase the market power of the [EU] on the global energy market”. Jorgensen was Denmark’s minister for climate, energy and utilities from 2019-2022, before he became minister for development cooperation and global climate policy. The commissioners-designate must be approved by the European Parliament before they take up their roles. Von der Leyen said it was impossible to say when the process would be complete but she hoped it would be soon. The initial goal was 1 November, but that may slip. The parliament can accept or reject the whole Commission, and has previously used its role to replace certain candidates and demand adjustments to portfolios. COORDINATION IS KEY Asked about overlap between Ribera’s and Hoekstra’s briefs, von der Leyen told reporters that all commissioners and executive vice-presidents would need to work closely together. “You cannot put reality in little boxes and separate the different topics from each other. “Reality: everything is intertwined and interlinked,” she said, stressing that coordination and cooperation were paramount. Von der Leyen also cut an additional layer of commission vice-presidents in the new college, which she said meant a “leaner structure, more interactive and interlinked”. CZECH DEVELOPMENTS Josef Sikela, a contender for the energy job, will instead become commissioner for international partnerships. Sikela was well regarded for his work during the energy price crisis, when the Czech presidency convened multiple energy councils in the second half of 2022 to stabilise the situation. His work will involve oversight of the €300bn Global Gateway programme, which invests in infrastructure abroad. Von der Leyen said the role had links with energy and trade, pointing to examples of working with African countries on renewable energy or critical raw materials to help underpin the bloc’s competitiveness.

SAO PAULO (ICIS)–Brazil and other Latin American countries have been grappling with severe wildfires in recent weeks, affecting even typically moist areas as they struggle with an intense drought. Millions are seeing their livelihoods disrupted across the Americas in an early showing of the worse effects of global warming, a signal of what the new normal will mean for the economy with recurrent disruption to logistics potentially the new normal. While Brazil is now battling wildfires, just three months ago the country suffered its worst floods ever, hitting the southernmost state of Rio Grande do Sul, a key petrochemicals and industrial hub where the economy came to a standstill for more than a month. Meanwhile, a severe drought is for the second consecutive year hitting the northern state of Amazonia, where the mightily Amazon River is already recording lower water levels than normal. In 2023, a similar situation brought havoc to petrochemicals logistics as the area is home to the Manaus Free Trade Zone (Zona Franca de Manaus, or ZFM in Portuguese) via which large amounts of imported chemicals make their way onto the rest of the country. Experts have warned Brazil is ill-prepared for the consequences of global warming, despite its huge progress on renewable energy’s implementation, and have asked policymakers to make climate change preparedness a cornerstone of all regulations approved. In another example of extreme weather affecting the Latin American chemicals industry, the Mexican petrochemicals hub in Altamira, in the east of the country, was brought to its knees earlier this year by a months-long drought. The authorities in Altamira prioritized water supplies to households and imposed restrictions to industrial players, making many companies’ operations untenable and leading to several force majeure declarations. BRAZIL: FIRE EVERYWHEREThe current wildfires crisis in Brazil began in August and worsened due to widespread drought – numerous fires still burning. Blazes are also raging near the capital, Brasilia, and in the northern coastal state of Bahia, state which is being hit by the same drought than Amazonia. Active wildfires on the outskirts of Sao Paulo, the Americas’ most populous metropolitan area with 20 million inhabitants, have significantly polluted the air over the past week, casting a grey pall over the city and exacerbating the city’s already congested traffic. The state’s Civil Defense reported ongoing fires in eight municipalities on 15 September. The state government has mobilized all available aerial resources to combat the blazes, deploying five fixed-wing and eight rotary-wing aircraft. And, just over the weekend, the waters of Sao Paulo’s major Pinheiros River turned emerald green due to an algae bloom caused by the drought. The state’s environmental agency attributed the river’s color change to low water levels and the smoky air to a hot, dry mass trapping pollutants from ongoing wildfires in nearby forested areas. Over the weekend, President Luiz Inacio Lula da Silva surveyed the Brasilia National Park by air after a fire erupted there, having already consumed 1,200 hectares. In Serra do Cipo, in the municipality of Muquem de São Francisco in western Bahia, firefighters have been battling a blaze for 30 days. Persistent challenging weather conditions, including high temperatures, strong winds, and low humidity, are hampering efforts to contain the fire. The situation is further complicated by a prolonged drought, with no rainfall in the region since May. Brazil’s rich greenery, meanwhile, continues to be threatened by deforestation. The Amazon is the largest rainforest in the world and it acts as a key absorber of emissions, reason why the world’s eyes are on Brazil and its efforts – or lack of on occasion – to preserve the area. Last week, analysis by green group Amazon Conservation showed that significant portions of the Amazon rainforest remain unprotected. The study, based on satellite imaging and machine-learning models, identified key unprotected areas in Peru, Brazil, French Guiana, and Suriname. These regions contain large, dense trees and continuous canopy cover, making them vital carbon stores. The analysts reiterated Brazil’s urgent need to expand its conservation efforts to safeguard the Amazon’s critical role in global climate regulation. While Lula’s first and second terms (2003-2011) registered lower deforestation rates, successive administrations overlooked the issue and partly reversed prior progress. Lula’s environment minister Marina Silva, widely praised for the initial success in the early 2000s, is back in the cabinet to achieve the same feat in what perhaps is the world’s last chance to save the vital rainforest. However, as the Amazon quickly deteriorates, experts are embroiled in a scary debate: some studies are already suggesting the area may turn from a net absorber of carbon into a net emitter. Without its key lung taking in emissions, the effects of climate change on Earth could become considerably worse. OVERWHELMEDCritics have accused the Brazilian government of responding too slowly when the wildfires crisis began in August, potentially exacerbating the situation. However, the reality is that no Brazilian administration has ever faced such widespread wildfires over such an extended period – the country has traditionally been seen as the archetypal tropical country, where rainfall is common and often torrential. After thousands of hectares have been lost to the flames, Lula’s administration appeared to fully acknowledge the reality last week, announcing measures to assist residents and municipalities in the areas most affected by the drought. This week, following Lula’s aerial survey of the devastation in Brasilia National Park, the government announced the creation of a National Climate Agency, tasked with addressing extreme natural phenomena, as the country’s vast geography makes it susceptible to opposing weather events within just a few months. The agency was one of Lula’s plans after he took office for the third time in January 2023, but it was repeatedly delayed. The multiple climate crises Brazil has endured since May have now made its establishment essential. LATIN AMERICA IS GETTING DRIERElsewhere in Latin America, other countries are also battling record-high numbers of wildfires. Satellite data from Brazil’s National Institute for Space Research (INPE) recorded 346,112 fire outbreaks across all 13 South American countries as of 11 September. This figure surpasses the previous record of 345,322 cases set in 2007, in a history dating back to 1998. Recent satellite imagery has revealed a smoke corridor stretching diagonally across the continent from Colombia to Uruguay. Despite efforts by Brazilian and Bolivian authorities, the blazes continue unabated, fueled by extreme temperatures and challenging weather conditions. Within petrochemicals, it is not only players in Brazil’s Manaus area who are having to learn how to do logistics under a new reality. In a recent trip to Buenos Aires, a source at a chemicals trader also operating in neighboring Paraguay and Uruguay described how low water levels in the equally mighty Parana River are putting a strain on the company’s logistics. The Parana River runs through Brazil, Paraguay, and Argentina for some 4,880 kilometers and it is the second largest river in South America, only behind the Amazon River. As water levels in the Parana have been unstable and reached record lows in the past two years, the Argentinian trading source said the company is slowly shifting the way it moves its cargo. “With low water levels, barges cannot fully load, so more barges are needed to transport the same amount of material. This obviously increases logistics costs quite a bit,” said the source. “We have always used the Parana River to bring product from Uruguay’s capital Montevideo, where it is shipped to from across the world, to landlock Asuncion, the capital of Paraguay. This has become a nuisance in recent months, and we are increasingly turning to trucks to transport the materials which can be transported by road.” Insight by Jonathan Lopez

LONDON (ICIS)–Hopes of a recovery in Germany’s economy are fading, think tank ZEW said on Tuesday, as its economic sentiment indicator fell for the third month in a row. The research group’s September economic sentiment indicator declined by 15.6 points from August to 3.6 points, while its assessment of the current situation in Germany was down by 7.2 points to -84.5 points, the lowest since May 2020. Both indicators also fell sharply in August from the previous month. The economic sentiment indicator began its 2024 downward trend in July. “The hope for a swift improvement in the economic situation is visibly fading,” said ZEW president Achim Wambach. “In the latest survey, we once again observe a noticeable decline in economic expectations for Germany.” The outlook for the eurozone was also gloomy, with the September economic sentiment indicator down by 8.6 points to 9.3 points. The assessment of the current situation in the eurozone fell by 8 points from August, remaining firmly in negative territory at -40.4 points.