Operational performance

Apatit’s Kirovsk branch mines, beneficiates and processes apatite-nepheline ore into phosphate rock and nepheline concentrate. Apatit is the world’s largest producer of high-grade phosphate rock and Russia’s only producer of nepheline concentrate.

Upstream

PhosAgro has its own deposits of apatite-nepheline ore, which is unique in terms of its environmental friendliness and safety. Its feedstock reserves are of igneous origin, and so they do not have concentrations of toxic heavy metals. PhosAgro’s own deposits of apatite-nepheline ore ensure 100% self-sufficiency when it comes to the production of phosphate rock (apatite concentrate extremely rich in P²O⁵). The mine life of the Company’s resource base is estimated at around 60 years.

The branch develops six Khibiny deposits: Kukisvumchorr, Yukspor, Apatitovy Cirque, Rasvumchorr Plateau, Koashva and Njorkpahk.

Further development of the Kirovsk branch depends on underground and open pit mining. The development of the raw material base is currently seen as a priority and PhosAgro’s capital investments are focused on the construction of new mining facilities to replace the retired ones, increase in productivity, as well as upgrade and purchase of equipment.

In 2020, the Company produced 37.55 mln t of apatite-nepheline ore, and it plans to increase the output to 41 mln t by 2027.

Key projects

• In Q4 2020, a skip hoisting complex was commissioned at main shaft No. 1 with an annual design capacity of 3.4 mln t. The reconstruction included the replacement of shaft equipment as well as installation of a tipple bunker complex, a new headgear, and a modern hoist.
• Construction and installation works at the crushing and delivery unit and haulage level +10 m of the Kukisvumchorr deposit entered the active stage following massive underground construction of 2016–2020.
• In Q4 2020, Yukspor tunnel No. 1 was commissioned. Re-equipment included replacement of the assembled rails and sleepers, crushed-stone ballast, and trough gutters, raising the throughput of this railway section by doubling the train speed.
• In December 2020, re-equipment of main shaft No. 2 reached the final stage – shaft equipment was fortified and and new solid conductors were installed to increase the reliability of ore drawing.
• In 2020, investment projects for open-pit mining at the Koashva and Njorkpahk deposits included procurement of nine units of road machinery, 32 mining dump trucks, and three electro-hydraulic excavators.

Technologies

Remote underground drilling. An operator can manage several drilling rigs from an above-ground control centre. In 2020, the Kirovsk branch of Apatit expanded its fleet with four units and formed a large fleet of 14 remotely-operated drilling rigs. The Unified Control Centre located on the premises of the Kirovsky mine also operates two rigs drilling at the Rasvumchorr mine 7 km away.

Downstream

Phosphate-based fertilizers

In 2020, fertilizer production in the phosphate segment increased by 4.4% y-o-y due to higher productivity of the existing facilities making phosphoric acid and phosphate-based fertilizers. Better performance was driven by technological and operational improvements in the production of phosphoric acid and major overhauls of the fertilizer facilities completed in late 2019.

Nitrogen-based fertilizers

In the nitrogen segment, production over 12 months of 2020 grew by 6.7% y-o-y due to the start of production of commercial ammonium sulphate and a 22.1% rise in ammonium nitrate output, to 691.5 kt. The increase is attributed to the launch of a new facility for producing nitric acid (the main component of ammonium nitrate) and it reaching the design capacity, as well as completed works to support the existing nitric acid facilities and upgrade ammonium nitrate capacities.

Feedstock, kt

In 2020, the production of sulphuric acid went up by 11.3% y-o-y and amounted to 6.8 mln t. The significant increase was driven by pilot commissioning of the new sulphuric acid unit in Cherepovets in the middle of Q1 2020. With an annual design capacity of 1.1 mln t, it will make the Company more self-sufficient.

At the beginning of the year, PhosAgro brought the synthetic ammonium sulphate production unit in Cherepovets to full capacity (up to 300 ktpa) and will, consequently, more than halve the procurement of ammonium sulphate from external suppliers. The sulphate is used in production of NPK(S) grades and, made in-house, will help bring down the production costs.

In 2020, the production of sulphuric acid increased by 11.3% y-o-y and amounted to 6.8 mln t. The surge was driven by:

• completion of a large-scale upgrade and re-equipment programme at the Cherepovets site;
• completion of the next stage of upgrade of the mineral fertilizer capacities in Balakovo;
• completion of the first stage of a modern phosphate-based fertilizer facility and construction of a power plant at Apatit’s Volkhov branch;
• synthetic ammonium sulphate facility in Cherepovets reaching its full capacity.

Key projects

Technologies

In 2020, PhosAgro’s domestic fertilizer sales increased by 8.0% y-o-y and exceeded 2.9 mln t. This growth was driven by higher sales to Russian farmers as a result of the upsurge of the entire Russian agricultural sector.

Exports of all types of fertilizers in 2020 increased by 4.2% to 7.1 mln t. The growth was largely attributable to an advanced sales system as well as high quality and environmental efficiency of the fertilizers produced. Better sales were also prompted by favourable weather conditions, high affordability of fertilizers for end consumers, and a temporary halt in fertilizer production in India and China in the spring as a result of the pandemic-related restrictions. All these factors supported the growth of PhosAgro sales in the key markets of Latin America, India and Africa.

Sales of phosphate-based fertilizers to North America over 12 months of 2020 amounted to about 316.5 kt, almost halving y-o-y on the back of the unfavourable pricing environment in the US market early in the year as well as Mosaic’s petition against Moroccan and Russian phosphate imports. PhosAgro’s flexible distribution allowed the Company to redirect products to other markets, including Canada and India, without any losses.

Sales in 2019–2020

Sales by region, kt