Mining Phosphate When Global Supply Is Low — Seems Like A Good Play, But Who's Doing It?

Food security — the ability to supply enough people with enough food in the world — is a long-term problem. It’s also one with immediate challenges as one key ingredient in fertilizer faces a global supply shortage.

Phosphate is one of the big three ingredients in fertilizer, the other two being nitrogen and potassium. Phosphate, 85% of whose production is used in fertilizer, is ideal for stem and root development in crops.

When two of the largest producers in the world are unable or unwilling to supply  the mineral, it leads to increasing fertilizer and food prices, impacting the farmers growing crops and consumers struggling with ever-higher costs of living. Rising natural gas prices also haven’t helped — natural gas is widely used in fertilizer production.

While China halted exports of phosphate fertilizer, the ongoing conflict in Ukraine has limited the Russian supply of the product as sanctions against the country kick in. Russia and China are responsible for about 40% of the world’s phosphate fertilizer production.

Russia is also a significant producer of natural gas, compounding supply and subsequent pricing problems.

Offering Solutions?

 

One Canadian company says it is focusing on a significant homegrown project it hopes will offer a solution to phosphate shortages in the future.

Quebec-based Arianne Phosphate Inc. DAN DRRSF is developing its Lac à Paul mining project in the province, describing it as “one of the most prolific phosphate projects in the world.”

Established in 1997, the mining company reactivated the project back in 2008 and, with a feasibility study five years later showing possible phosphate mining activity for up to 50 years, now has multiple agreements with potential product buyers once the mine is fully operational.

Major North American producers of fertilizer products, including phosphate, are Saskatchewan-based Nutrien Ltd. NTR NTR and Florida-based The Mosaic Co. MOS.

As well as its dominant use in fertilizers, phosphate is used in a variety of other products, including specialty applications such as food preservatives, animal feed, cosmetics and detergents. It also has a growing use in lithium iron phosphate (LFP) batteries as well as in semiconductors. 

The global phosphate rock market is reportedly expected to reach 300 million tons by 2030 with a value estimated at $45 billion. From 2020 to 2025, the global market is expected to grow at a compound annual growth rate (CAGR) of 2.8%.

Arianne Phosphate, known as Arianne Resources Inc. until the late 1990s, describes itself as a “development-stage” company. It reported a net loss of CA$1.3 million ($1 million) for the first three months of 2022.

This post contains sponsored advertising content. This content is for informational purposes only and is not intended to be investing advice.

Featured photo by Raphael Rychetsky on Unsplash

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