Investment Climate & Policy - A decade ago, a similar deal fell apart due to red tape, lack of guarantees, and alleged bribery attempts under President Robert Mugabe's administration [1][2] - The previous administration resisted cost-reflective tariffs and US dollar charges for coal, hindering investment in a 15 million tonnes capacity cement plant [2][3][4] - Aliko Dangote praised President Emmerson Mnangagwa's reforms and economic turnaround, leading to renewed investment in Zimbabwe [5][6] - Zimbabwe's efforts to attract investment have faced hurdles including transparency, corruption, hyperinflation, and currency instability [6][7] Industry & Sector Focus - Dangote previously considered investments in cement and coal in 2015, which did not materialize [1] - Dangote planned to build a 15 million tonnes capacity cement plant, which collapsed previously [4] - The current investment spans coal, cement, and fertilizer sectors [7] Potential Impact & Opportunities - If the deal is finalized, it could signal a return of investors to Zimbabwe [7] - The deal is considered a significant political win for President Emmerson Mnangagwa, who advocates for Zimbabwe's openness to investment [6] - Other investors, including the Chinese, are already active and performing well in these industries [4]

Third Quarter 2025 Performance - Consolidated Revenues reached $3452 million[6] - Net Income was $340 million[6] - Operating Earnings totaled $411 million[6] - Adjusted EBITDA was $806 million[6] Segment Results - **Phosphate:** Net Revenues were $1290 million, Adjusted EBITDA was $280 million, and Operating Earnings were $102 million[6] - **Potash:** Net Revenues were $695 million, Adjusted EBITDA was $329 million, and Operating Earnings were $229 million[6] - **Mosaic Fertilizantes:** Net Revenues were $1592 million, Adjusted EBITDA was $241 million, and Operating Earnings were $96 million[6] Phosphate Division - Phosphate division realized stripping margin in excess of $500 per tonne[9] - Phosphate division Q3 idle and turnaround expenses declined from $84 million in Q2 to $42 million[9] - Phosphate division trailing 3-month period ending October reached approximately 18 million tonnes[9] Potash Division - Potash division Q3 MOP cash cost of production declined by 4% from $74 to $71 per tonne[12] - Potash division Q3 idle and turnaround declined to $16M from $34M in the second quarter[12] Mosaic Fertilizantes Division - Mosaic Fertilizantes division Adjusted EBITDA of $241M, up 190% compared to the prior year[15] - Mosaic Fertilizantes division recovered $27M in Q3 against bad debt in prior quarter[15]

Financial Performance - In 2025, the company reported net sales of $164 million, net income of $43 million, and EBITDA of $71 million [1][6] - The Board of Directors declared a distribution of $4.02 per common unit, to be paid on November 17 to unitholders of record at the close of the market on November 10 [1] - The company experienced a 95% utilization rate of its consolidated ammonia plant, with combined ammonia production of 208,000 gross tons and UAN production of 337,000 tons [1][4] Sales and Pricing - Approximately 328,000 tons of UAN were sold at an average price of $348 per ton, and 48,000 tons of ammonia at an average price of $531 per ton [4] - UAN and ammonia prices increased by 52% and 33% respectively compared to the prior year, driven by tight inventory levels and elevated demand [4][5] Capital Expenditures and Cash Management - The company spent $13 million on capital projects in 2025, with total capital spending estimated to be between $58 to $65 million [6][7] - Total liquidity at the end of the quarter was $206 million, consisting of $156 million in cash and $50 million available under the ABL facility [7][8] Market Conditions and Outlook - Domestic and global inventories of nitrogen fertilizer remain tight, supporting higher prices [5][12] - The company anticipates ammonia utilization rates to be between 80% and 85% due to a planned turnaround at the Coffeyville facility [8][9] - The company expects direct operating expenses and turnaround impacts to be between $58 million and $63 million [9] Geopolitical and Environmental Factors - Geopolitical conflicts, particularly in Ukraine, continue to impact the nitrogen fertilizer industry [11][12] - Natural gas prices in Europe remain high, affecting ammonia production costs and creating export opportunities for U.S. producers [13][14] Future Projects and Developments - The company is working on a project to utilize natural gas and additional hydrogen from the adjacent Coffeyville refinery, which could increase ammonia production capacity by up to 8% [14][20] - Ongoing debottlenecking projects at both plants aim to improve reliability and production rates [15][16]

Financial Data and Key Metrics Changes - For Q3 2025, consolidated net income was $401 million, with earnings per share at $3.72 and EBITDA of $625 million, including a $488 million benefit from small refinery exemptions [4][10] - Adjusted EBITDA for the quarter was $180 million, with adjusted earnings per share at $0.40, reflecting a significant impact from RFS liability changes and inventory valuation [10][11] - The estimated accrued RFS obligation on the balance sheet was $93 million as of September 30, representing 90 million RINs marked to market at an average price of $1.03 [11] Business Line Data and Key Metrics Changes - In the petroleum segment, adjusted EBITDA was $120 million for Q3, driven by increased Group 3 benchmark cracks and higher throughput volumes [10][12] - The ammonia utilization rate in the fertilizer segment was 95%, down from 97% in Q3 2024, with higher nitrogen fertilizer prices compared to the previous year [8][13] - The renewable segment reported an adjusted EBITDA loss of $7 million, a decline from an $8 million profit in Q3 2024, primarily due to increased soybean oil prices and the loss of the blenders' tax credit [12][13] Market Data and Key Metrics Changes - Group 3 benchmark cracks averaged $25.97 per barrel in Q3 2025, up from $19.40 per barrel in the previous year [5][10] - Average RIN prices for Q3 were approximately $6.33 per barrel, nearly 25% of the Group 3 2-1-1 crack [5] - Fertilizer prices remained high due to tight global supplies, with ammonia priced at approximately $700 per ton and urea ammonium nitrate at $360 per ton [23] Company Strategy and Development Direction - The company plans to revert the renewable diesel unit back to hydrocarbon processing during the next scheduled turnaround in December, citing profitability concerns in the renewable space [21][22] - The management remains cautiously optimistic about the refining sector, anticipating stable demand and limited new refining capacity, which could support healthy crack spreads [19][20] - The company is focused on returning the balance sheet to targeted leverage and prioritizing paying down the term loan with excess cash flow [24][25] Management's Comments on Operating Environment and Future Outlook - Management noted that refining market conditions improved in Q3, with steady refined product demand and inventories near five-year averages [18] - The company expressed concerns about the renewable business's reliance on government support, which has been lacking, impacting profitability [21] - Future pipeline projects are expected to positively impact the Mid-Continent region, providing relief for product movement [28] Other Important Information - The company ended Q3 with a consolidated cash balance of $670 million and total liquidity of approximately $830 million [14][15] - Significant cash uses included $43 million for capital and turnaround spending and $20 million for term loan repayment [14] Q&A Session Summary Question: Pipeline projects and shipping commitments - Management acknowledged the potential positive impact of new pipeline projects for Mid-Continent refiners but has not yet decided on shipping commitments [27][28] Question: Renewable diesel plant utilization - The renewable diesel unit will be mothballed, with plans to find new uses for logistical assets, but the pretreatment plant will be shut down [29][30] Question: Renewable diesel conversion costs - The conversion back to hydrocarbon processing is primarily a catalyst change, with low costs associated with mothballing the unit [36][40] Question: RIN obligation strategy - The company plans to monitor RIN obligations closely and is preparing to purchase RINs to meet compliance deadlines [46][47] Question: Dividend restart timeline - Management indicated that predicting the right debt levels for restarting dividends is challenging, but the refining environment appears favorable for future growth [52][54]

The Trump administration has finalized a $1.5 billion loan guarantee for an Indiana-based company to produce ammonia fertilizer https://t.co/1pFx7aPdVd ...

Investment Commitments - The Japanese government and companies have committed to investments worth $467 billion in major projects in the United States to revitalize the U.S. industrial base [1] - Japan will invest up to $332 billion in critical energy infrastructure, including partnerships with Westinghouse, GE Vernova, Hitachi, Bechtel, Kiewit, SoftBank Group Corp., and Kinder Morgan [2] Power Equipment and Infrastructure - Japanese companies will invest up to $25 billion to supply large-scale power equipment such as gas turbines and generators in collaboration with GE Vernova [3] - An additional $25 billion will be invested to supply electrical power modules and transformers in collaboration with Toshiba, and $20 billion for thermal cooling systems with Carrier [4] Advanced Technology and Components - A $30 billion investment is pledged with Mitsubishi Electric for power station systems for data centers, $25 billion with TDK for advanced electronic components, and $20 billion with Fujikura for optical fiber cables [5] - Japan will invest $15 billion in advanced electronic components with Murata Manufacturing and another $15 billion for energy storage systems with Panasonic [6] Manufacturing and Infrastructure Projects - Japanese companies will construct a $3 billion ammonia and urea fertilizer facility and a $2 billion copper smelting and refining facility in the U.S. [7] - Investments include $600 million for upgrading ports and waterways, $500 million for a diamond grit manufacturing facility, and $350 million for a lithium-iron-phosphate production facility [8] Trade and Export Opportunities - Japan committed to expanding opportunities for U.S. exports, including Toyota's plans to export U.S.-made vehicles to Japan without additional testing [9] - A Memorandum of Cooperation was signed to expand shipbuilding capacity in both nations [10]

Core Viewpoint - Brazil Potash Corp. has successfully executed its third and final definitive commercial offtake agreement with Kimia Solutions, securing a long-term commitment for potash sales, which enhances the company's revenue visibility and supports project financing efforts [1][2][3]. Agreement Details - The agreement is a 10-year take-or-pay commitment for Kimia to purchase up to 704,000 tons of potash annually from the Autazes Potash Project at market prices [2][8]. - This agreement represents approximately 23% to 32% of Brazil Potash's annual production capacity, contributing to a total of over 2 million tons of pre-sold potash for up to 17 years [3][8]. Commercial Strategy Progress - The Kimia Agreement provides strong revenue visibility essential for project financing and demonstrates robust market demand for domestically produced Brazilian potash [5]. - The remaining production will be reserved for spot sales to capture potential market premiums and accommodate maintenance outages [5]. Strategic Partnerships - The agreement follows a recently signed MOU with Fictor Energia for approximately $200 million in power line construction funding and a $20 million equity investment, significantly de-risking both commercial and infrastructure components of the Autazes Project [6]. Industry Context - Brazil Potash aims to reduce Brazil's reliance on potash imports, which was over 95% in 2021, by supplying domestically produced potash, potentially meeting approximately 20% of the current demand [10]. - The company plans to transport potash primarily using low-cost river barges, enhancing logistical efficiency [10].

Market Overview - The stock market experienced a strong finish in 2024, driven by optimism around potential tax cuts and a robust M&A environment, but sentiment shifted in early 2025 due to concerns over tariffs, AI spending, and consumer health [2][3] - A remarkable recovery occurred in the second quarter of 2025, with U.S. equities approaching all-time highs, primarily led by large-cap technology and growth stocks, especially those related to AI and semiconductors [3] Fund Performance - Ariel Focus Fund gained +4.75% for the three-month period ending June 30, 2025, outperforming its primary Russell 1000 Value Index, which rose +3.79%, but lagged behind the S&P 500, which jumped +10.94% [4] - Key contributors to the fund's performance included Oracle Corporation, Mosaic Company, and Resideo Technologies, while J.M. Smucker Company, APA Corporation, and Core Laboratories were the largest detractors [4][10][12] Company Insights - Oracle Corporation's shares reached an all-time high of over $245, driven by a potential $30 billion annual cloud contract with OpenAI and a doubling of its backlog, highlighting its strong long-term positioning in AI-driven enterprise software [6] - Mosaic Corporation's stock rose +35.88% due to favorable trade dynamics and a renewed focus on cost discipline, benefiting from increased demand for fertilizers driven by economic growth in developing countries [7][8] - Resideo Technologies rebounded with a +24.63% gain, supported by its leadership in smart home technology, despite challenges from a sluggish U.S. housing market [9] Challenges Faced - J.M. Smucker Company faced a -16.28% decline, primarily due to disappointing results from Hostess Brands, which saw a -14% drop in comparable revenue [10] - APA Corporation and Core Laboratories experienced declines of -11.62% and -23.09%, respectively, amid concerns about the energy sector's future despite ongoing demand for oil and gas [12][13]

Core Insights - Petrobras is set to supply approximately 20% of Brazil's nitrogen fertilizer demand by 2026 as it restarts operations at three local plants [1][3][4] - The Bahia and Sergipe plants will contribute 5% and 7% to the national urea market, respectively, as part of Petrobras' strategic plan [2] - The Parana state unit has already resumed operations and is expected to meet 8% of the national urea demand [3] - A nitrogen fertilizer plant in Mato Grosso do Sul is also being restarted, which will add another 15% to the country's total nitrogen fertilizer supply, bringing Petrobras' total contribution to 35% [4] - These initiatives align with President Lula's strategy to reduce Brazil's reliance on fertilizer imports by encouraging Petrobras to invest in the nitrogen fertilizer sector [5]

Bankruptcy Protection - Brazilian fertilizer maker Unigel filed for bankruptcy protection after struggling for over two years to restructure its debt [1] Company Performance - Unigel has been facing difficulties in debt restructuring for more than two years [1]