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re: phosphate plays Maaden may well have low comparative energy...

  1. 160 Posts.
    re: phosphate plays Maaden may well have low comparative energy costs via their heap gas once they come online, but this looks like being offset by much higher and continually increasing freight costs.

    MAK must have a cost advantage over Maaden here whether they are shipping to Asia or over to IPL

    Below from the Saudi Gazette Feb 2008:

    In Saudi Arabia, MaadenMaaden Saudi Arabian Mining Company
    is attempting to reduce costs by exploiting economies of scale through shared infrastructure and greater integration. "We are building a 'mine to market' value added chain," said Khaled Mudaifer, vice-president of MaadenMaaden's phosphate
    's economies of scale must come to an end somewhere. With global shipping capacity at a premium, export logistics are a growing concern for the fertiliser market.

    With such massive increases in capacity scheduled to come on line, some analysts are concerned about the impact on the market. "Prices will bottom out," said Philips.

    He predicted that "margins will be reduced around 2011 to 2012".

    This, coupled with the dramatic rise in capital costs, means that some producers will be squeezed out of the market.

    But Gulf-based clients are not deterred when it comes to developing some of the most ambitious projects in the world.

    "I strongly believe we are set for a very good period in the fertiliser industry," says Graham Hoar, manager of petrochemicals consultant Nexant's gas-based chemicals and fertilisers division. "The major use for fertilisers will remain food production."

    With a steadily rising global population to feed, demand is expected to keep growing.

    © The Saudi Gazette 2008
 
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