ICL Signs MOU to Establish Phosphate Operation in Namibia
18 Dec 2015 --- ICL has signed a Memorandum of Understanding (MOU) with LLNP Ltd., a Namibian subsidiary of the Leviev Group to perform a feasibility study to establish a world-scale phosphates and downstream production business in Namibia, including fertilizer-grade phosphoric acid, white phosphoric acid, bulk fertilizers (e.g. MAP and DAP) and specialty fertilizers. LLNP holds permits and exploration rights to mine phosphate deposits that are estimated to total approximately one billion tonnes.
The cost of extracting the phosphate is anticipated to be very competitive compared to competitors, which, in turn, is expected to enable downstream production to deliver best cost of goods.
Over the next several months, ICL and LLNP will finalize the technology development required to produce phosphate downstream products from marine deposits, including the establishment of a local industrial pilot plant. Upon its successful completion, a detailed feasibility study will be prepared to secure financing for the project.
The location of the plant on Namibia’s Atlantic shore with close proximity to the marine mining site is expected to provide major logistical advantages by virtue of its proximity to markets in North and South America and competitive freight rates to East Africa. An adjacent port will be used to export goods, as well as to import raw materials required in the production process. The production plant will also benefit logistically by its proximity to land-based transportation systems (including a railway line) serving areas with high demand in Southern and West Africa.
LLNP’s parent company, Leviev Group, possesses unique technological knowledge of maritime mining based on its substantial experience in maritime mining in Namibia. This will greatly complement ICL's extensive experience, advantages and position as a world leader in the specialty phosphate market.
The partnership with LLNP follows ICL’s recent formation of a phosphate joint venture with Yunnan Yuntianhua, China’s leading phosphate company (“YTH”). The Chinese JV is comparable to the planned operation in Namibia based on a mine producing ~2.5 million tonnes of phosphate rock per year.
The JV with LLNP is part of the execution of ICL’s ‘Next Step Forward’ strategy to diversify its sources of phosphate-raw materials in order to build its specialty phosphate business, in this case in the Americas and in Africa for the agriculture, food ingredients and engineered materials markets. These steps are expected to ensure the continuation of ICL's phosphate operations.
Commenting on the news, Stefan Borgas, CEO of ICL, added, “We are delighted to enter into this partnership with the Leviev Group and to join such a long-standing and well-regarded investor in the country. Our joint platform will enable ICL to serve the evolving and fast-growing needs of the food and agro markets on the African continent. In the short term, we will focus on proving the technology required for this project and to demonstrate that it will enable us to operate as one of the world’s cost leaders in integrated phosphate specialties. The majority of the substantial investment in the project is expected to commence in 3 to 4 years. This initiative is meant to serve as the next wave in ICL’s expansion of its specialty business after most of our existing growth projects are completed. We do not expect this project to represent an additional financial burden on our company over the short term.”
Nissim Adar, President & CEO of ICL Fertilizers, added, “We are excited by the prospect of developing a large-scale phosphate mining and manufacturing operation in Namibia, which is one of Africa’s most stable, liberal and democratic countries and known for its moderate political climate and strong interest in attracting foreign investment. We intend to carry out the project in close cooperation with the government to ensure the development of the local economy and its employment market, while ensuring environmental responsibility. We also look forward to working closely with LLNP and the Leviev Group to advance the first stages of this project in the months ahead, and to benefit from our respective strengths and capabilities over the years ahead in order to bring this important project to fruition.”
The Leviev Group commented, “We are pleased to enter into the MOU with ICL, a global manufacturer of products based on specialty minerals that fulfill humanity’s essential needs in the food and agriculture markets. Our cooperation is meant to answer worldwide needs in the fast evolving and changing food and agrochemical markets.
LLNP possesses unique technological knowledge of maritime mining based on its long-term experience in maritime mining in Namibia. The company which identified the mining business potential, has built and developed a vast phosphate-rich deposit, which shall contribute to turning Namibia into a leading player spearheading the world fertilizers industry.
Within the framework of our joint venture with ICL, including maritime mining of phosphate and the establishment of facilities to produce sophisticated downstream products, the companies will develop the raw materials required to produce high quality end products in the country. The project has received the strong support of Namibia’s Minister of Mines, and the parties will work in full coordination with the Namibian authorities and in accordance with approvals by the relevant parties in the country.”
“Within the framework of this cooperation, the companies will comply with a due diligence survey, including conducting stringent performance tests (EIA) related to evaluating the preservation of environmental quality. In addition, the fertilizers to be manufactured by the companies will contribute to the world’s agricultural sector and food industry in general, and to Namibia’s, in particular. Among the products to be manufactured by the joint venture will be fertilizer products that are specifically appropriate for Namibia’s agricultural industry and that will help to provide richer agricultural products and alleviate difficulties experienced by Namibia’s farmers. The project is also expected to provide numerous jobs in the country.”
