Phosphate News: ICL and Leading Chinese Phosphate Producer Form JV

Big news hit the phosphate space this week when Israel Chemicals (NYSE:ICL,TLV:ICL) announced that it has completed a joint venture arrangement with leading Chinese phosphate producer Yunnan Yuntianhua (SSE:600096). 
The alliance will see ICL nearly double its phosphate market share, and will include a phosphate rock mine that produces about 2.5 million tonnes of phosphate annually. It will also include a large-scale phosphate operation with an annual capacity of about 1.85 million tonnes of sulfuric acid, 700,000 tonnes of phosphoric acid, 850,000 tonnes of fertilizers, 60,000 tonnes of purified phosphoric acid, 120,000 tonnes of specialty fertilizers and 65,000 tonnes of specialty phosphates for the food and engineered materials markets.

The joint venture partners expect to invest around $340 million over the next five years on a 50/50 basis to build specialty plants and to triple white phosphoric acid (WPA) capacity. Both companies have also agreed to produce and sell WPA exclusively in China within five years of closing. What’s more, the joint venture will focus on developing phosphate-based technologies through a phosphate research and development platform in Kunming that the partners established in August.
The deal has been a long time coming, as ICL first announced its plan to create a strategic partnership with Yunnan in December 2014. ICL’s share price was up 5.73 percent at end of day Wednesday, closing at US$5.54 on the NYSE. Year-to-date the company is down 26.63 percent.

Company news

Montero Mining and Exploration (TSXV:MON) announced that its financial partner, Ovation Capital, has committed to $2.7 million in funding in exchange for a 10-percent interest in its Duyker Eiland phosphate project in South Africa. The agreement states that Ovation may earn the 10-percent interest at asset level by completing a prefeasibility study and a further 20-percent interest by completing a bankable feasibility study for the project.
“Ovation is providing approximately $2.7 million in funding to advance Montero’s Duyker Eiland phosphate project,” Montero’s president and CEO, Tony Harwood, said in a press release. “DRA, Outotec and the Sebata Group have been retained to complete Pre-feasibility, Opportunity and Environment Studies with a view to establishing the costs of developing a rock phosphate mine and fertilizer operation. Ovation is also committed to funding other phosphate opportunities identified by Montero in the region.”
The company’s share price reacted positively to the news, jumping 300 percent on Wednesday to close at C$0.04. Year-to-date the company is up 300 percent.

DuSolo Fertilizers (TSXV:DSF) is another company that secured funding this month after closing the initial tranche of its non-brokered private placement on October 2. It raised a total of C$2,434,500 by issuing 24,345,000 units at a price of C$0.10 per unit; each unit consists of one common share and one-half common share purchase warrant. At the same time, the company announced that it has signed a one-year convertible loan agreement with Tembo Capital for $750,000.
Also this month, DuSolo announced that it has granted directors and a senior officer a total of 2.2 million incentive stock options that are exercisable for a five-year period at a price of $0.10 per common share. At end of day Wednesday, the company’s share price was down 5.56 percent, closing at C$0.085. Year-to-date the company is down 68.52 percent.
 
Securities Disclosure: I, Kristen Moran, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: DuSolo Fertilizers is a client of the Investing News Network. This article is not paid-for content.
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