Euro Potash - K+S

Captain Qahn's picture

German Potash producers continue difficulties with WirtschaftsWoche:

"A German court will widen an investigation into whether to extend a salt-water disposal permit for potash and salt miner K+S, WirtschaftsWoche reported on Wednesday. The reason for the extension is charges filed last month by prosecutors in the town of Meiningen, southeast of K+S's headquarters in the city of Kassel, over suspected illegal waste disposal, the weekly said, citing a court document. 

K+S declined to comment.

The administrative court in the Hessian city of Kassel, which will decide whether to extend the permit, was not immediately available for comment.  K+S has won provisional approval for the discharge of saline waste water in Hesse under strict limits. It said in December it expected to receive final approval for deep-well injection until 2021 by this summer.

K+S has for years fought complaints by environmental groups and some local municipalities about the discharge of salty waste water from processing potash ore into fertiliser products. The company has previously said it had obtained approval from state mining authorities for waste water disposal and it was fully cooperating with the investigators.

But in the statement earlier this month, prosecutors argued those involved in the approval process, including three current and former mining authority employees, must have known that the expert opinion the clearance rested on was wrong about pollution levels.

There must have been "at least a tacit understanding that the approval was legally not justifiable", the statement said, adding: "Approval by way of collusion" was as serious as not having approval in the first place. Prosecutors also said they would seek to claw back any profits obtained from the alleged misconduct.

The charges are directed at 14 employees of K+S, including the former and current chief executive, as well as further executive board members, a number of K+S staff, and also two employees and one former employee of the state of Thuringia mining authority, the prosecutors' office said.

(Reporting by Harro ten Wolde and Ludwig Burger, editing by David Evans)"

K+S earnings drop due to reduced output:

"FRANKFURT, March 10 Salt and fertiliser supplier K+S warned of a significant drop in operating profit this year, citing lower potash prices and output restrictions at its German mines due to stricter regulation of waste water discharge.

"A significant drop in average prices in the Potash and Magnesium Products business unit, as well as sales volumes slightly below those of the previous year is anticipated," the German company said in a statement on Thursday. K+S in December was granted only provisional approval for further discharge of saline waste water in the German state of Hesse and warned that the limits imposed by the regulator could crimp output over the next few months.

Fourth-quarter earnings before interest and tax, adjusted for currency hedging effects, rose 18 percent to 154 million euros ($169 million), helped by a strong dollar, which was slightly above the average analyst forecast of 147 million euros in a Reuters poll. K+S, which fended off a takeover approach by Potash Corp of Saskatchewan last year, stood by plans to bring a new Canadian potash mine known as Legacy on stream by end-2016.

This will help it reach its goal of 1.6 billion euros in 2020 earnings before interest, taxes, depreciation and amortisation (EBITDA), up from 1.1 billion last year.

Legacy would be the first new mine in the potash industry in four decades and undermines efforts by potash industry leader Potash Corp and North American export cartel Canpotex to cut output to shore up prices.

Earlier this year, Potash Corp decided to close its newest potash mine in New Brunswick and to curtail production at two other Canadian mines for four weeks. ($1 = 0.9112 euros) (Reporting by Ludwig Burger; Editing by Georgina Prodhan)"