Russian gas cuts threatening world ammonia & fertiliser supplyASX:MNB Aug 05, 2022
This morning we saw the following interview between macro analyst Tony Greer and a digital chicken (Doomberg).
With reference to a Wall Street Journal article titled "Russian gas cuts threaten world's largest chemical hub", Greer made the following comments.
- "You need natural gas to produce ammonia and energy to mine phosphate."
- "You need phosphate and ammonia to produce fertiliser."
- "You need fertiliser to grow food at scale."
- "You need food to keep the peace."
Tony's comments come as a result of the impacts the European energy crisis is having on the German industrial sector, with a lack of access to affordable gas threatening to shut down supply chain critical manufacturing facilities.
The specific focus is on the BA SF (European chemicals conglomerate) owned chemicals plant in Germany, the biggest of its kind in the world and home to one of Europe's largest ammonia plants.
Globally, more than 90% of ammonia is produced from fossil fuels and, more specifically, natural gas.
So the specific issues being discussed are energy scarcity and a lack of gas supply threatening ammonia supply.
These are areas where we think our Investment in Minbos Resources (ASX: MNB) will succeed.
MNB is currently progressing towards the development of a phosphate (fertiliser) project while at the same time putting together a plan to build from the ground up a zero carbon ammonia plant.
The zero carbon factor is its primary positive differentiating factor as part of a move away from a reliance on fossil fuels and, more specifically, gas.
Having already secured cheap affordable zero carbon hydropower for its plant, we think MNB is positioning itself uniquely in a part of the economy where supply chain issues are only starting to bubble up to the surface.
We think that as the supply chain issues become more obvious, MNB's project will start to have implications globally and not just regionally in Africa.