KGHM and “PUŁAWY” will search for resources together

| Bez kategorii |

On Friday, January 10th, 2014 KGHM Polska Miedź, Grupa Azoty “PUŁAWY” and Gdańskie Zakłady Nawozów Fosforowych “Fosfory” signed an agreement concerning cooperation in the search for resources. The document outlines the rules of joint activity of the companies regarding the identification and excavation of potassium salts, raw phosphate materials, salt and non-ferrous metal deposits.

Creation of a special purpose company

The agreement stipulates the scope and schedule of further work on the joint project. One of the essential elements of the document is specifying the details of the investment contract, which will mark the real launch of the common project, and will lead to constituting a special purpose company, as well as the terms of purchasing raw materials and resources from this company. GZNF “Fosfory”, Grupa Azoty “PUŁAWY” and KGHM Polska Miedź are to apply for corporate consent and seek an antitrust approval from the Office of Competition and Consumer Protection, so as to establish a new entity without problems.

Market giants joining forces

The Friday agreement has made KGHM Polska Miedź the project leader. The capital share of our companies – Grupa Azoty Zakłady Azotowe “PUŁAWY” and GZNF “Fosfory” (owned by Grupa Azoty “PUŁAWY”) or other Grupa Azoty members in the special purpose company will constitute 50%.

The document from January 10th, 2014 is the next step in the cooperation between the parties, which had singed a Letter of Intent concerning cooperation in exploration projects in August 2013.

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United Shales of America

| Foreign Markets |

USA constitutes an excellent example of a country where the chemical sector is gaining an increasing importance in the national economy. Thanks to shale gas excavation American companies from the chemical sector have gained access to a cheap resources. Consequently, it was possible to decrease the cost of production, becoming a major competitor of Asian and European manufacturers.

Unconventional sources

Over 10 years ago, USA became the global leader in natural gas excavation. As much as 40% of this resource was obtained thanks to shale gas and coal deposits. Owing to a significant decrease of the price of gas, even to 3 dollars per MMBtu in 2012, new energy was injected into the American industry, including chemical companies.

Fueled by gas

Shale revolution triggered a rise in employment in the industry. Companies using gas in the manufacturing process have expanded, mainly enterprises of the chemical sector. A boom in this sector of the American economy is also connected with the fall in the price of electricity. It is possible thanks to cheaper manufacturing process of energy, also with the use of natural gas. Consequently, the supply chains for the gas industry are contained within the country, without the necessity to import resources from abroad.

New American Dream?

International Energy Agency has forecast that in about 20 years, USA will no longer need to import crude oil or gas, the key fossil fuels. By 2025, about a million new jobs will be created in the mining and excavation businesses and a few million in other sectors of the economy. Exploitation of shale gas deposits is likely to help the American industry save up to 11 billion dollars annually on the cost of electricity and resources.

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