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While Western Australia’s potash juniors can rely on
the State’s premier mining credentials – regulatory
and political stability, skills – their international peers
have their own advantages.

The international brigade
Danakali Ltd (Colluli SoP project, Eritrea): The Colluli deposit
comprises solid salts, not brines, allowing for low-cost open pit mining
and processing. At only 180km from port, it is well endowed with The Fertiliser Products
infrastructure solutions. The project has already attracted African and
European development bank support and is close to key European, Muriate-of-potash (MoP): The most commonly used potash fertiliser
African and South Asian markets. with an annual market of 55 mtp. It is used to farm a variety of foods,
particularly chloride-loving vegetables such as sugar beets, corn, celery
Highfield Resources Ltd (Muga MoP, Spain): Blessed with access and Swiss chard. It can be beneficial for soils that are low in chloride,
to key infrastructure in a Tier 1 jurisdiction, Muga can keep freight costs building the plants’ disease resistance. However, in soils or irrigation
down. It is also close to key European markets for which it can attract water with high chloride levels, it can create imbalance in plants. The
premiums. sector is dominated by a handful of players with projects in Canada,
Russia, Belarus and Brazil.
Davenport Resources Ltd (South Harz, Germany): Close to key
domestic and European markets, South Harz also boasts a long Sulphate-of-potash (SoP): SoP fetches a premium over MoP but is a
production history. It is surrounded by high-quality infrastructure and is much smaller market, currently 7 mtpa. Using SoP and can improve a
likely to attract European and German development funding. plant’s ability to absorb essential nutrients like phosphorus and iron. It
Kore Potash plc (Sintoukola, Republic of Congo): One of the largest is particularly vital to high-value crops such as fruits, vegetables, nuts,
potash resources in the world, capable of producing 5 mtpa MoP. It is tea, coffee and tobacco which can be sensitive to chloride. Most SoP is
just 90km from the proposed port site and its Atlantic coast location produced via the Mannheim process. It involves pouring potassium and
means freight costs to Brazil, a key market, are low. It also enjoys strong other raw minerals into a muffle furnace to create a reaction between
Government support. potassium chloride and sulfuric acid. It accounts for more than 60% of
global SoP production but given its high energy intensity it sits high on
Phosphate: In the form of rock phosphate, phosphate is a key ingredient the cost curve.
in three fertilisers; SSP, TSP and MAP. Annual global production is The sector is also coming under increasing environmental pressure.
around 200 mtpa but is dominated by a handful of largely state-owned In contrast, SoP can be produced by using salt mixtures from natural
companies. While the US and China retain all production for domestic brines which requires brine with high sulfate levels, such as typically
use, Morocco is the world’s largest phosphate exporter, accounting for found in the WA salt lakes. Processing is less energy intensive than the
35% of global export supply. Around 85% of production comes from five Mannheim process, allowing for lower cash costs.
majors, who are vertically integrated.

rus pandemic has placed a huge caveat quality and yield will drop,” he said. “If Investors are wary of nascent sectors
over those predictions. All fertiliser prices they skip a season it hurts them the very of the Australian mining scene following
have come off in line with the pandemic, next. The demand for potash is growing the bursting of the lithium bubble last year
but SoP prices have proven slightly more with global population growth and it has but Eidne believes they will eventually be
resilient. While supply chains are affect- been pretty steady growth of 2-3% per convinced of case for SoP.
ed, the rush on supermarkets has shown annum in a big market place.” “It is an exciting, if still unproven, sec-
the global restrictions will do little to ease Swiericzuk agrees, pointing to a 4% tor,” he said. “Hopefully, we a few compa-
demand for food. price deviation over the last decade as nies get up and we get some confidence
Kore Potash’s newly installed chief ex- evidence of SoP’s stability. into the market. We are at the ground
ecutive Brad Sampson sees a rebound in “SOP prices haven’t changed in floor of a long-term industry. What would
the near term. three months but then they have barely you have done to be in at the ground floor
“Potash prices have been smashed changed in 10 years. That reinforces the of the iron ore industry?”
but, farmers can’t go too long without special nature of SOP and the markets
putting potassium into the ground or their which demand it,” he said. – Dominic Piper

aUSTRaLIa’S PaYDIRT MaY 2020 Page 27