FORT MEADE – A local startup company with a transformative process for phosphate fertilizer manufacturing has made a deal with a new investor that will take the technology to the next level.
JDCPhosphate Inc. in Fort Meade announced the deal for an undisclosed amount with Stonecutter Capital Management LLC, a New York-based investment firm.
The new investment will allow JDC to re-tool its demonstration plant at 3200 County Road 630 W. to correct problems in the original design that would allow for continuous production of phosphoric acid, the key ingredient in phosphate fertilizer, said Dave Blake, chief operating officer.
“With this round of financing, we can create a mini version of a full-scale production facility,” he said. “After this phase of the pilot plant, we felt we could go to the next phase.”
The next phase would be a full-scale production plant capable of producing from 10 tons to 20 tons of phosphoric acid per hour from phosphate ore, or rock, Blake said. The original pilot plant had a potential capacity of one ton of acid per hour but could not run continuously because of dust problems created during the process.
The JDC plant uses a technology called the Improved Hard Process, named for Robert Hard, a chemical engineer who created the technology in the 1970s but was never able to scale it up for commercial use. One of Hard’s co-workers, the late Joseph Megy of Lakeland, maintained his belief in the technology and started JDC in 2008 with Theodore “Tip” Fowler, a veteran executive in the Florida phosphate industry.
The partners raised about $50 million in investments to build the first demonstration plant, which began operating in 2014.
The dust problem prevented the plant from operating continuously, said Blake, who joined the company in May 2014 to work on the issue with Megy, who died in May 2015.
The company solved the problem and received a patent earlier this year for the improvements, he said.
In October company officials told The Ledger they needed $10 million of new investment to take the modified process into continuous production.
The Stonecutter investment came after JDC modified its plan for the second demonstration plant, Blake said.
The new plan calls for a demonstration plant capable of producing 0.1 tons of phosphoric acid per hour, he said, but it could more easily scale up to a full production plant.
“We’re going to a smaller scale because it’s easier and more flexible yet still allow us to scale up to full production,” Blake said.
JDC hopes to finish the modified demonstration plant by the end of the year and begin continuous production in the first quarter of 2018, he added.
The company anticipates running the plant for three to six months to show continuous production is possible.
Timothy Cotton, the chief executive officer at JDC, said the Stonecutter agreement prohibits disclosure of the value of its investment but acknowledges it is less than the $10 million sought earlier.
But it still allows JDC to take the crucial next step to show the Improved Hard Process, also called IHP, is a viable technology for wider use, he said.
Cotton is a founding partner of Agrifos Partners LLC, a Miami Beach investment company focusing on the fertilizer industry. Agrifos is the largest investor in JDC.
“We view this as a very important step – not as important as building a full-scale plant, but a significant step,” Coton said.
Matthew Dewstow, an Australian investor in Avenira Limited, an Australian phosphate company, agreed. Avenira also has a roughly 8 percent stake in JDC, according to its website, and Dewstow has been following that investment.
“As a long-term observer of the Improved Hard Process, the recent fundraising is a very exciting event,” Dewstow said in an email to The Ledger. “JDCPhosphate can now bring together all the learnings it has made over the past several years on its demonstration plant and finally validate the IHP at commercial scale.”
Avenira holds a license to use the process at its facilities in Australia and Senegal, according to its website.
The Mitsui Group, a Japanese conglomerate, is also a JDC investor and IHP license holder, Cotton said.
Once IHP proves successful as a continuous production process, JDC plans to license the technology to other companies interested in building full-scale plants, he added.
JDC expects a lot of interest in licensing because IHP has three big advantages over the traditional phosphoric acid manufacturing method, Cotton said.
It produces a higher quality acid, improving the quality of the finished fertilizer products.
And IHP gets that superior product despite the ability to use a lower grade of phosphate ore not suited to the current production method, Cotton said.
The second advantage would greatly expand the availability of Florida’s existing phosphate ore preserves, much of it unusable because it contains other mineral impurities.
A study by the Florida Industrial and Phosphate Research Institute in Bartow showed Florida has about 1 billion tons of low-grade phosphate ores, or nearly twice the proven reserves of the higher grades suitable for current production methods.
“There is a lot more phosphate rock in Florida that could be used with the IHP, and you would be able to find it in areas not as environmentally sensitive,” Cotton said.
Perhaps most importantly, IHP can produce phosphoric acid without creating the environmentally problematic byproduct called “gypsum.” Because it has no other viable commercial uses, phosphate fertilizer manufacturers must store gypsum on hill-sized stacks next to fertilizer manufacturing plants and continuously monitor them to prevent environmental contamination.
“With the recent world issues in relation to phosphogypsm, the ability of JDC to bring a new phosphoric acid production process to the market that is low cost and sustainable is truly exciting,” Dewstow said.
He was referring in part to last year’s accident on a gypsum stack at the Mosaic Co.’s New Wales plant near Mulberry, which resulted in the release of about 215 million gallons of contaminated water into the Floridan Aquifer.
Florida has 24 gypsum stacks with more than 1 billion tons of phosphpgypsum, according to the Phosphate Institute, and current production practices add about 30 million tons of new gypsum annually.
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