• Global consumption of phosphate fertilizers declined by 1.0%, from 41.4 MMT (P2O5) in 2012 to an estimated 40.9 MMT (P2O5) in 2013. This slight decrease was mainly the result of reduced demand from Asian markets, especially India, which together traditionally account for more than half of global demand;
  • 2013 was a challenging year for the Indian fertilizer sector. The devaluation of the Rupee, its national currency, as well as issues with the fertilizer procurement subsidy system and the forthcoming May 2014 government elections led to a substantial decline in phosphate fertilizer. From over 7 MMT of DAP imports in 2010, purchases totalled 6.2-6.4 MMT in 2011 and 2012 and were down to about 3.5 MMT in 2013;
  • Top consumer Brazil registered a good increase in P2O5consumption. With domestic production stable and demand increasing, imports grew from 1.9 MMT P2O5 in 2012 to 2.2 MMT P2O5. In particular MAP imports rose 25% year-on-year;
  • With approximately 25% market share, China remained the world’s largest exporter of DAP. For the year, exports remained rather stable at 3.8 MMT of DAP (vs. 3.9 MMT in 2012), and 0.7 MMT of MAP (vs. 0.6 MMT in 2012) exported;
  • The limited DAP intake from India and relaxed lower-tax window parameters in China applied considerable pressure on pricing, MAP (FOB Baltic) retreated 19% year-on-year to US$ 454/t (FOB Baltic) while DAP lost 17% to average US$ 457/t (FOB Baltic);
  • The main supply side developments were:– July – Mosaic announced an agreement with Ma’aden and SABIC to bring into production the 3.5 MMT pa Wa’ad Al Shammal phosphate project in Saudi Arabia. With production expected to start in 2017, Mosaic, whose stake in the greenfield project is 25%, will have the rights to sell a corresponding amount of product;
    – July – Ma’aden reached its designed DAP capacity of about 3 MMT pa.
    – October – Mosaic announced it would acquire all of CF Industries’ phosphate assets (including its phosphate mines) in central Florida (USA);
    – OCP continued with the development of four phosphate facilities in Jorf Lasfar, Morocco, each including a 450 KMT P2O5acid unit. Commercial production slated to being in 2015-2016;
  • Global phosphoric acid capacity, which is the main raw material in the phosphates industry, increased 3% in 2013 to reach about 55 MMT pa P2O5.
  • The IFA estimates that global phosphates capacity will reach 42.5 MMT P2O5 in 2014, with the bulk of the incremental capacity coming from DAP. In tonnes, global DAP and MAP capacity in 2014 will be close to 57 MMT pa and 22 MMT pa, respectively. TSP capacity is expected to remain flat at 9.5 MMT pa. The bulk of the increases in DAP/MAP capacity will occur across Morocco and China;
  • The phosphate market is expected to grow 1.5% to 2.0% per annum over the next few years.



We mine magnetite-apatite ore, which is high-quality phosphate rock, from our Kovdorskiy GOK mine and extract apatite concentrate from the ore at our beneficiation plant. We then use the apatite concentrate output as a raw material to produce phosphate-based fertilizers and sell a portion of this apatite concentrate production to third parties. We also extract baddeleyite concentrate and produce iron ore concentrate from iron ore extracted from the Kovdorskiy GOK mine to sell to third parties.

Apatite (high-quality phosphate rock) from our Kovdorskiy GOK mining facility and beneficiation plant supplies our three phosphate facilities:

  • Phosphorit (Russia)
  • Lifosa (Lithuania)
  • EuroChem-BMU (Russia)

Our phosphate production facilities produce a wide range of products, including MAP, DAP, NP and feed phosphates as well as P2O5rich magnetite-apatite ore (37.0% to 38.0%). Our apatite mining operations also yield valuable co-products. By virtue of its geological setting, the apatite mined at our Kovdorsky GOK open-pit is laced with iron ore and baddeleyite.

All three phosphate facilities produce sulphuric acid, while BMU and Lifosa also have phosphoric acid units. Additionally, the Lifosa plant produces aluminium fluoride; a raw material used in aluminium manufacture, glass-making, optics and the tanning industries.

Key projects underway

Mine pushback

Kovdorskiy GOK

6532 EuroChem AR13_Front_HR_45_I

  • +948KMTApatite production increase (pa)
  • +136KMTIron ore production increase (pa)
  • US $ 0.1bnTotal CAPEX
  • US$ 0.07bn2014 CAPEX
  • +US$ 35mIncremental EBITDA (pa)1
    • Opening of a new ore body adjacent to the main pit to increase apatite production
    • Increase resource base/reduce mining raw material deficit
  • 28% Completion2
Phosphate rock

EuroChem Fertilizers (Kz)

6532 EuroChem AR13_Front_HR_36_I
  • +600KMTPhosphate rock production increase (pa)
  • US $ 0.1bnTotal CAPEX
  • US$ 0.04bn2014 CAPEX
  • +US$ 20mIncremental EBITDA (pa)1
    • Drilling and blasting operations launched October 2013
    • Increase resource base/reduce mining raw material deficit
    • Establish foothold in Central Asia
  • 24% Completion2
  • 1 Assuming full capacity utilisation of project(s)
  • 2 Based on capital expenditure incurred as at 31 December 2013



6532 EuroChem AR13_Front_HR_47_I

Our Kovdorskiy GOK integrated mining and processing facility underpins our phosphate production chain. Boasting a P2O5content of between 37% and 38% with very low cadmium content, it is also the only phosphate mine in the world to be blessed with iron ore and baddeleyite embedded in the same deposit. In 2013, we produced 2.4 MMT of apatite concentrate and 5.7 MMT of iron ore concentrate and 8,500 tonnes of baddeleyite concentrate as co-products. While providing a considerable credit to our apatite costs, these co-products also provide a hedge against fertilizer price volatility.

However, our apatite production, in its currentconfiguration from Kovdorsky-GOK, is at full capacity and unable to fully cover EuroChem’s own feedstock requirements. While we are proceeding with the development of phosphate rock mining capacity in neighbouring Kazakhstan to assist us with our feedstock needs, we are also taking steps to significantly increase Kovdorskiy GOK’s capacity by both pushing back the current open pit limits as well as developing a new area adjacent to the existing open pit which contains a mineral combination of apatite/staffelite (as shown on the adjacent diagram) andsimultaneously bringing incremental beneficiationcapacity online.

As part of our open-pit pushback programme we have developed mine plans and schedules which encompass several development phases. In 2013, we completed the first phase of our expansion project by increasing beneficiation capacity from 15 MMT to 18 MMT of magnetite-apatite ore. The next phase will see capacity expanded to 20 MMT of ore by 2018. A third phase, which could possibly bring capacity to as much as 25 MMT per year, is currently being reviewed together with several initiatives to improve transportation costs and conveyance costs of overburden and ore to the mill as well as improving overall maintenance costs and reliability.