The European Union and its governing structures strongly support the responsible use of fertilizers in the region. EU countries are not the biggest fertilizer users in the world, but the region has a significant number of companies working in the industry. Even though the potential for growth is high due to product innovation and a growing market for healthy, nutrient-rich foods, demand is likely to be restricted by the expanding application of organic fertilizers and regulatory constraints.
Recent years have seen considerable growth in policies and recommendations regarding responsible fertilizer use and sustainable agriculture. For instance, all EU resident companies starting from the fiscal year beginning on January 1, 2017 or within a calendar year, are obliged to include in their annual accounts aspects related to corporate social responsibility (CSR), business environmental liability, human rights and anti-corruption. This is in accordance with the European Parliament Directive on non-financial reporting 2014/95/EU of October 22, 2014.
Moreover, the Commission on Sustainable Agriculture and Climate Change has urged that sustainable agriculture must be integrated into national and international policy. This was one of its recommendations for policy makers on achieving food security in the face of climate change.
Corporations have also positively contributed to the responsible fertilizer and chemical use movement. Yara International is among companies that strongly focus on sustainable agriculture and positions itself as a leader in the sphere. This fertilizer producer contributes to green growth and sustainable development by avoiding practices that can cause long-term damage to soil, including excessive tilling of the soil (leading to erosion) and irrigation without adequate drainage (leading to salinization). Long-term experiments have provided exemplary data showing how various practices affect soil properties and how sustainability can be achieved.
Another major CSR project implemented in Europe to minimize the adverse impact on human health and the environment is the International Council of Chemical Associations initiative. It’s called Global Product Strategy (GPS) and is based on 5 pillars:
Developing a base-set of hazard and exposure information to conduct safety assessments for chemicals in commerce.
Undertaking global GPS capacity building initiatives to implement the best risk assessment practices and management procedures, especially in small- and medium-size enterprises (SMEs) and in emerging and developing countries.
Providing transparent public access to science-based product safety information and throughout the value chain.
Promoting a stakeholder dialogue on science and risk-based chemicals management, as well as developing the Long-Range Research Initiative. This is a global research program that aims to identify and fill gaps in understanding of the hazards posed by some chemicals and to improve the methods available for risk assessment.
Finally, the real strength of GPS lies in the broad commitment behind it: the strategy is promoted and implemented by more than 150 top chemical companies and more than 40 associations globally and the number of supporters is continuously growing. With each new signatory, the GPS success story gains additional momentum to shape the future image of the global chemical industry – an industry that is a trusted and reliable partner in a world where chemicals are valued and managed safely and responsibly throughout their life-cycle.
Top ten fertilizer company EuroChem produces a wide range of nitrogen and phosphate fertilizers, as well as some organic synthesis products. It is also developing two large potash deposits in Russia and is a major GPS user. The company recognised quickly that the responsible production and sound management of chemicals are a global responsibility.
EuroChem operates fertilizer production facilities in Belgium, China, Kazakhstan, Lithuania, and Russia, and first began implementing the strategy at its Lifosa subsidiary in Lithuania. The company issues GPS reports for all the mineral fertilizers and related products made at Lifosa, including DAP, a highly concentrated granulated nitrogen-phosphoric compound fertilizer, and orthophosphoric acid, mainly used in the production of mineral fertilizers. EuroChem has extended GPS reporting to all its other fertilizer production plants as part of its ongoing commitment to provide the public with reliable, science-based information on the chemicals it uses and to ensure these present no risk to people or the natural environment at any stage of production.
EU Reporter, December 22, 2017
Russia Bets on Hungry China With $6 Billion Fertilizer Mines
Interview by Head of the Mining Division, EuroChem Group Clark Bailey to Bloomberg on November 8, 2017
- EuroChem plans to sell premium fertilizer to Asian farmers
- The potash market is depressed and prices are near decade-low
China’s dilemma of how to feed its booming population will partially be answered by fancier fertilizers, according to one of the world’s richest billionaires.
EuroChem Group AG, owned by Russian commodities tycoon Andrey Melnichenko, is spending over $6 billion on two mines to produce potash, a reddish mineral found deep in the Earth that’s prized for its ability as a soil fertilizer.
The company is counting on Asian farmers buying more sophisticated crop nutrients aimed at soil deficiencies or different crops, rather than saturating the ground with a blanket of chemicals. China’s farmers have long relied on heavy doses of state-subsidized fertilizer to boost yields, but that’s left fields contaminated.
“We forecast an explosive growth in demand for premium fertilizers in China,” Dmitry Strezhnev, EuroChem’s chief executive officer, said in an interview from Moscow.
Still, it’s a tough time to be a potash miner. Prices are near a decade-low and the market is mired in a glut. Companies including Potash Corp. of Saskatchewan Inc. have shuttered operations in the U.S. and Canada. The global surplus could be as much as 10 million metric tons in 2018, according to Green Markets data.
“Even though the market is in oversupply, companies invested in these projects years ago, so they have to start,” Elena Sakhnova, an analyst at VTB Capital, said by phone. “This is the major threat for the market.”
EuroChem won a license for the Usolskiy mine, located in the Perm region of western Russia, about a decade ago, when potash was reaching $1,000 a ton. Since then the market has collapsed, and prices are now about $225. Usolskiy has recently started production.
The second site, VolgaKaliy, is about 190 kilometers (118 miles) from Volgograd and will begin next year, focusing on shipping potash to Europe and the Americas. It will be one of the lowest-cost potash mines in the world, as well as having the highest ore grades, according to Clark Bailey, the company’s director of mining.
The company is betting it can succeed where others failed because output costs in Russia are far lower than competitors. VolgaKlaliy is located near to the Black Sea, which reduces the shipping costs, Bailey said in an interview with Bloomberg Television. Overall costs in Russia are also much lower than Canada or Europe, he said.
In 2018, total production of both mines will be about 600,000 tons, the company estimates. In seven years, it aims to produce 8.3 million tons of potash a year, equal to about 13 percent of current global consumption.
“Global demand for potash grows by 1 million tons per year, while there are not so many large new projects like ours are coming online,” Strezhnev said. “Given the gradual ramp up of our mines, we will, in fact, just meet the growing demand.”
Potash producers usually sell the commodity in China and India through annual supply agreements with importers, who than resell the fertilizer to farmers. EuroChem aims to cut out the middleman and work with local Asian companies to turn potash into more advanced fertilizer formulas.
Ultimately, EuroChem aims to expand in premium crop nutrient products, with the business accounting for 30 percent of future sales, compared with 20 percent currently.
“EuroChem’s strategy looks justified,” Konstantin Yuminov, analyst at Raiffeisenbank in Moscow said by phone. “China is focusing on more eco-friendly fertilizers and developing production, so demand for premium fertilizers will rise.”
Link to interviews and videos: https://www.bloomberg.com/news/articles/2017-11-08/russia-bets-on-hungry-china-with-6-billion-fertilizer-mines
By Yuliya Fedorinova
With assistance by Guy Johnson, and Matthew Miller
Feature – Fertilizer Focus discusses EuroChem’s potash capacity with Clark Bailey, Head of Mining, and future plans with Olivier Harvey, Head of Investor Relations.
First published in Fertilizer Focus (September 2016)
Russian billionaire Andrey Melnichenko, whose fertilizer company is investing more than $6 billion in potash mining, said it could take at least a decade for the potash market to work off the excess because of the past “disruptive” actions by the largest sellers. However, because of its low costs and business model that encompasses mining, retail selling and a variety of products, EuroChem still generates profits even in a depressed market.
First published in Bloomberg (August 2016)
Andrey Melnichenko speaks during a panel session on day two of the St. Petersburg International Economic Forum 2016 (SPIEF) in Saint Petersburg, Russia, on Friday, June 17, 2016.
As a leading, vertically integrated producer of nitrogen and phosphate fertilizers, EuroChem puts special emphasis on occupational safety and the creation of a safe and accident-free work environment across its whole organization and the reduction of occupational injury rates. EuroChem worked with experts from DSS to improve its internal safety management system.
First published in June 2015 – DuPont
Today, EuroChem is the world’s ninth-biggest fertiliser business, but Mr Melnichenko aims to bring it into the top three. More than 10 billion dollars has been invested in EuroChem, SUEK and SGK in the past five years, and another 10 billion is to be put in over the next five…
Self-sufficiency was the word on the lips of our EuroChem hosts during a recent tour of the Kovdorskiy mining complex in Russia’s Arctic north-west. After guiding Mining Journal and others around a brand new apatite-staffelite ore-processing plant, officials expressed confidence at the prospect of extracting enough phosphate to end reliance on external sources for the fertiliser feedstock…
First published in Mining Journal – May 2015 (author: Nadav Shemer)
When Andrey Melnichenko founded EuroChem Mineral Chemical Co. OJSC nearly 15 years ago, the company was not much more than a pair of Soviet-era
nitrogen plants and a dust bowl phosphate mine facing closure…
First published in May 2015 by S&P Global Market Intelligence (formerly known as SNL Financial) / (author: )
The expansions at one of the largest apatite mines in Russia are only part of EuroChem’s growth ambitions. Different ore types will be tapped and the mine could continue being worked to twice its current depth, IM learned on a recent visit to the company’s Kovdorskiy mine in northwest Russia…
First published in Industrial Minerals – May 2015 (author: )
Fertilizer giant EuroChem is planning to float on the London stock market within five years following the opening of two huge potash mines that will dramatically boost the size of the business…
First published in the Evening Standard – Thursday 21 November 2013 (author: Jonathan Prynn)
EuroChem is Russia’s largest mineral fertiliser producer, and is aiming to establish itself as one of only four fertiliser companies with a significant presence in all three fertiliser nutrient categories – nitrogen, phosphorous and potassium (NPK)…
First published in Mining Magazine – 15 November 2013 (author: Ailbhe Goodbody)
EuroChem is developing its own source of potash, and seek to become 100% self-sufficient in its own phosphate production. The scenario for fertiliser minerals is simple: people need food and therefore fertiliser…
First published in Industrial Minerals – May 2013 (author: Kasia Patel)
EuroChem is investing a combined $7 billion to develop 2 separate potash production facilities in Russia: the VolgaKaliy potash mining complex near Volgograd, based on the Gremyachinskoe ore deposits; and the Usolskiy manufacturing complex near Berezniki, in the Perm region…
First published in IHS Chemical Week – April 2013 (author: Natasha Alperowicz)
In a grey, dusty field three hours drive from the “hero” city of Volgograd, better known by its old war time name of Stalingrad, a brand new derrick rises above the melting snow that marks the site of the biggest investment in Russia outside of the oil and gas sector. The derrick is the entrance to the VolgaKaliy mine shaft, which will drop more than a kilometre below the surface to one of the richest potash deposit in the world…
First published in BNE – April 2013 (author: Ben Aris)
A conservative investor, an apolitical and happy man: Andrey Melnichenko tells why he is unwilling to invest in new assets and shares his vision of the future for his business…