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T he world’s population continues to grow. One symptom of that growth is that more people want more and

better food, especially in countries like Brazil, India and China. Another symptom is increasing demand for agricultural fertil-izers, such as potash and phosphate.

Potash is important because it improves water retention, yield, nutrient value, taste, colour, texture and disease resistance of food crops. It has wide application to fruit and vegetables, rice, wheat and other grains, sugar, corn, soybeans, palm oil and cotton.

Phosphate rock is also important for crop nutrition because it contains phos-phorus. Phosphorus performs a key role in plant photosynthesis, nutrient trans-port and energy transfer. A plant with

the proper amount of phosphorus avail-able to it will grow more vigorously, mature earlier and provide higher yields than plants with inadequate phosphorus. Mixing a phosphorus-rich fertilizer with soil when planting helps the plant estab-lish a stable root system and aids in strong initial growth, better water-use efficiency, early maturity and higher crop yields.

Below are a number of companies engaged in potash and phosphate produc-tion and exploration.

POTASH Agrium Inc. [AGU-TSX] is a retailer and wholesaler of agricultural nutrients. The company operates through three business units: wholesale, retail and advanced tech-nologies. Agrium’s wholesale unit produces,

markets and distributes nitrogen, phosphate and potash. In 2008, Agrium produced 6.8 million tonnes of primary crop nutrients, about 3% of global capacity. The company is expanding its Vanscoy, Saskatchewan, pot-ash operation, which is projected to increase production capacity by almost 40%.

Allana Resources Inc. [AAA-TSXV] has the Ethiopia Potash Project, which has NI 43-101 compliant measured and indicated resources of 673 million tonnes containing 126 million tonnes of potassium chloride and additional inferred mineral resources of 596 million tonnes, including 119 mil-lion tonnes of potash chloride.

Allana also has potash claims in Argentina next to Vale’s Rio Colorado Project. The company recently acquired licenses for three mineral concessions

Outlook bright for potash and phosphate Increasing demand for fertilizers as demand for more and better food grows

by Peter Caulfield

S E P T E M B E R 2 011 www.resourceworld.com 29

totaling 150 km2 in Ethiopia’s northeastern Danakil Depression.

BHP Billiton Corp. [BHP-NYSE] is advancing its Jansen Lake Potash Project in Saskatchewan. In February 2011, the com-pany said it was in the feasibility study stage of the project. The company says the project, the world’s biggest potash mine, is expected to be in operation by 2015. Once at full pro-duction, Jansen is expected to produce about 8 million tonnes per year. The company has submitted an environmental impact state-ment for the proposed mine and set aside US $240 million for drilling and site preparation for the ground-freezing process required before sinking the production service shafts. Channel Resources Ltd. [CHU-TSXV] is advancing the Fox Creek lithium/potash brine project in west-central Alberta. Brine can be used to produce multiple industrial minerals, including lithium and potash. The Fox Creek project contains mineral rights over a 369 km2 area. The project is situated over oil and gas pools hosted in the Beaverhill Lake and the southern Woodbend carbonate reef complexes. Aquifers com-posed of formation water brines are spatially associated with these oil and gas pools and contain high concentrations of sodium and calcium chloride and anomalous concen-trations of lithium, potassium, boron and bromine.

Confederation Minerals Ltd. [CFM-TSXV] owns 50% of American Potash LLC, which is exploring potash prospects in Utah. The Green River Potash Project, located near Moab in southeast Utah, consists of 31 potash prospecting permit applications totaling 25,593 hectares and leases of nine state sections totaling 2,446 hectares. Green River is within the Paradox Basin, which extends across southeast Utah and southwest Colorado and which

has supported potash extraction from the Cane Creek mine since 1964.

Logs and reports for 38 historic oil and gas exploration wells drilled on the subject permit applications have been reviewed for indications of potash. They indicate that Cycles 5, 13 and 18 contain significant con-centrations of potash. The Cycle 5 potash horizon is currently being solution-mined by Intrepid Potash, Inc. at the Cane Creek Mine. In the Green River property area, potash ranges from 3.7-5.5 m (12-18 ft) in thickness, and, based on gamma ray logs, grades vary approximately between 15% and 25% potassium oxide.

Encanto Potash [EPO-TSXV] is focused on exploring for potash in five southeast-ern Saskatchewan prospects, working with the Chacachas, Day Star, Muskowekwan, Muscowpetung and Ochapowace First Nations to develop those properties. Encanto Potash has 100% potash mineral title to all of the properties and the First Nations have a 3% gross overriding roy-alty once production begins. Encanto’s Spar property has a NI 43-101 compli-ant resource calculation of an indicated resource of 12.49 million tonnes of potas-sium oxide and an inferred resource of 12.24 million tonnes of potassium oxide.

Grizzly Discoveries Inc. [GZD-TSXV] has acquired lands for potash exploration that total more than 1.47 million acres along the

Saskatchewan-Alberta border, a region with a history of potash occurrences, discoveries, exploration and production. The properties are delineated in three areas: Blocks 1 and 3 – approximately 212,000 acres; Blocks 2 and 4 – approximately 394,000 acres; Block 5 – approximately 866,000 acres. Blocks 1 and 3, near Provost, Alberta, are 30 km due south of Lloydminster and Blocks 2 and 4. Block 5 is about 120 km south of Blocks 1 and 3 and stretches from Oyen, Alberta to Medicine Hat, Alberta.

The presence of potash beds in the upper portion of the Prairie Evaporite in east-central Alberta, near and along the Saskatchewan border, is indicated by geo-logical maps produced by the Alberta and Saskatchewan governments. In addition, a number of Grizzly’s permits exist close to a reported occurrence of potash in a deep well in the Vermilion area of east-central Alberta.

Intercontinental PotashCorp [ICP-TSX] is focused on exploring and developing potassium sulfate minerals used in fertilizer. ICP’s flagship project is the Ochoa Project, located in Lea County, southeast New Mexico. The property consists of more than 100,000 acres of federal subsurface potas-sium permits and potassium mining leases. ICP plans to extract polyhalite ore, which will yield sulphate of potash (SOP), the highest-priced potash product on the mar-ket. SOP is necessary for maintaining such

LEFT: Underground potash mining machine at the PotashCorp Mine at Rocanville, Saskatchewan. Photo courtesy PotashCorp.

RIGHT: Night drilling operations at Allana Potash’s Danakhil Potash Project in Ethiopia. Photo courtesy Allana Potash Corp.

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chloride-sensitive crops as tobacco, pota-toes, beans, nuts, strawberries, citrus fruit, mangoes, cherries and peaches. When these crops are exposed to toxic chloride-based fertilizers, the result is poor leaf growth, reduced quality and lower yields. SOP improves the nitrogen uptake of phospho-rus, which assists in resistance to drought, disease and insects, resulting in healthy and profitable harvests.

President/CEO Sidney Himmel says the most widely used fertilizer is muriate of pot-ash (MUP). Also called potassium chloride, MUP holds a 89% market share. Although SOP has only a 10% market share, it sells for a 50% premium over MOP. Himmel says ICP intends to become a primary pro-ducer of SOP by mining its 100%-owned property and by becoming the lowest-cost producer of SOP. The company plans to start production in 2015. Other mines already operating in the region are the The Mosaic Company’s potash mine and Intrepid Potash, Inc.’s potash mines.

Intrepid Potash, Inc. [IPI-NYSE] has revitalized older mining operations and created some new opportunities. Intrepid owns and operates Intrepid Potash, Moab, LLC, Intrepid Potash, Wendover, LLC (both potash mines are located in Utah); and Intrepid Potash, New Mexico, LLC, with operations in Carlsbad, New Mexico.

K + S Potash Canada is part of the K+S Group [German stock exchanges], a sup-plier of standard and specialty fertilizers and the world’s leading salt producer. K + S Potash has the Legacy Project, a pot-ash mine and production facility that is being built near Bethune, Saskatchewan. It will be the first new potash mine in Saskatchewan in nearly 40 years. Construction of infrastructure has begun, with plant construction slated to begin in 2012. Production is due to begin in 2015. The company says the new mine and pro-duction facility could produce up to 2.7 million tonnes of potassium chloride per year.

Lara Exploration [LRA-TSXV] has prop-erties in South America and China. Lara has a portfolio of mineral properties in Brazil, with on-going exploration programs for

many minerals, including phosphate rock and potash. The company also has a port-folio of phosphate exploration claims in Colombia and is seeking to expand its pres-ence there. In Brazil, the Sergipe Potash Project contains two separate license blocks, with a total area of 14,114 hectares.

In November 2008, the company and Sprott Resource Corp. [SCP-TSX] agreed to form a 50:50 strategic alliance to acquire phosphate, potash and other resource opportunities. Lara undertook field recon-naissance work to complete a preliminary evaluation of the Alliance phosphate and potash properties. Lara is in the process of acquiring the 50% owned by Sprott, and has entered into an agreement with Talon Metals Corp. [TLO-TSX], whereby Talon has been granted an option to earn 75% interest in the project. To earn the inter-est, Talon must pay US $500,000 cash, and spend US $4.0 million on exploration over the next four years.

MBAC Fertilizer Corp. [MBC-TSX; MBCFF-OTCQX] has phosphate and pot-ash properties in Brazil. The Aneba Potash Project, located in the Amazon Basin, covers about 270,000 hectares. The Itafós Arraias SSP Project is near the border of Goias and Tocantins states where MBAC operates a small phosphate mine and grinding plant that sells natural phos-phate for direct application to local farms. MBAC is investing US $200 million to build a Single Superphosphate fertilizer plant close to its current operation. MBAC also holds the Santana Phosphate Project in Para State and the Carmo Phosphate Project in Minas Gerais.

MagIndustries Corp. [MAA-TSX] has three business units: MagMinerals, MagForestry and MagMetals. MagMinerals Potash Corp. and its Congolese subsidiary MagMinerals Potasses Congz SA (MPC) are developing a potash production plant near Pointe-Noire in the Republic of Congo. MPC owns exclusive rights to the project, one of the world’s largest undeveloped potash deposits. In June 2009, a NI 43-101-compli-ant technical report estimated proven and probable reserves of 33.2 million tonnes of potash, which can support a reserve life of

more than 54 years. The immediate focus of MPC is to construct and commission a 600,000 tonne-per-year potash plant that will produce agricultural-grade fertilizers. The facility is scheduled to start production in 2012.

Mesa Exploration Corp. [MSA-TSXV] has the Green Energy lithium project in Utah, a large brine deposit grading 40% minerals. The brine contains pot-ash, lithium, magnesium, boron, bromine and other potentially valuable miner-als. Mesa’s three potash projects in Utah (White Cloud, Salt Wash, Whipsaw) are in the Paradox Basin, estimated to contain 2 billion tons of potash. Two miles south of the White Cloud project is Intrepid Potash, Inc.’s Cane Creek Mine, which produces 60,000 tons of potash and 210,000 tons of by-product salt annually.

Orocobre Limited [ORL-TSX] says it is the leading lithium-potash developer in Argentina’s so-called Lithium Triangle. Orocobre has joined forces with Toyota Tusho to develop the Salar de Olaroz brine deposit. It expects to complete a definitive feasibility study in 2011 and to begin com-mercial production in 2012.

Orocobre also has a pipeline of future lithium and potash projects. The company says pit sampling at the recently discovered Salinas Grandes project shows the highest average lithium and potassium grades in Argentina, comparable to Atacama brines in Chile, the world’s largest and lowest-cost lithium producer from brines. And pit sam-pling results at the Guayatoyoc property indicate a high-quality potassium target. Orocobre intends to drill and sample at these sites in order to evaluate them.

Pacific Potash Corporation [PP-TSXV] is a potash exploration and development company whose permits are located along the Alberta-Saskatchewan border. The company’s Provost potash project consists of two permits totaling 43,938 acres 250 km southeast of Edmonton, Alberta. With Grizzly Discoveries Inc., the company has applied, on a 50/50 basis, for three additional permits totaling approximately 69,000 acres located south of the Provost property. Exploration plans in 2011 for the

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Provost Project and the Provost/Grizzly property and adjacent area are to permit two drill sites on the Provost property and to complete at least one drill hole in late summer or early fall.

Passport Potash Inc. [PPI-TSXV] has acquired land holdings of more than 70,000 acres in Arizona’s Holbrook Basin and is positioned to take advantage of the esti-mated 2.5 billion tons of potash in the basin. The Holbrook Basin has access to rail lines, Interstate 40 and a major power plant 25 miles from the project. Potash deposits in the Holbrook Basin are considered shallow by industry standards, with deposits rang-ing at depths of between 800 and 1,300 feet.

PotashCorp. [POT-TSX] says it is the world’s largest fertilizer company by capacity. It produces the three primary crop nutrients – potash (K), phosphate (P) and nitrogen (N). As the world’s leading potash producer, it is respon-sible for about 20% of global capacity. PotashCorp has operations and busi-ness interests in seven countries. The company has five main markets: China, India, other Asia, Latin America and North America. Together they account for nearly three-quarters of the world’s population and roughly 80% of total fertilizer consumption. Most of the growth in the fertilizer industry is occurring in those markets. Consumption has increased by 83% over the past 20 years, closely following food production trends during that period.

Ringbolt Ventures Ltd. [RBV-TSXV] has, through its 70% interest in BUA USA LLC, been granted State mineral leases for potash properties covering 6,277 acres in Utah and State mineral exploration permits covering 9,594 acres in Arizona. The State explo-ration permits in Utah are located in the Paradox Basin, an area which hosts the Cane Creek Potash Mine. In addition, 25 prospect-ing permits for over 51,966 acres are under application with the Federal Bureau of Land Management. In Arizona, Ringbolt Ventures has been granted 15 State mineral explora-tion permits in the Holbrook Basin, an area that hosts a significant amount of potash, according to an Arizona Geological Survey

Open File Report from 2008.The Mosaic Company [MOS-NYSE] says

it is the world’s leading producer and mar-keter of concentrated phosphate and potash. The company also says its potash annual capacity, of 10.4 million tonnes, is the sec-ond-largest in the world. Mosaic operates potash mines in Saskatchewan, New Mexico and Michigan. About 45% of the potash it produces is sold to North American custom-ers and the remainder is exported.

Vulcan Minerals Inc. [VUL-TSXV] owns a 100% interest in 1,100 min-eral claims (approximately 70,000 acres) in the Bay St. George Basin of western Newfoundland. It is part of the Maritimes Basin, a significant producer of potash and salt. The company says the claims have the potential to host an economically viable potash-salt deposit.

Western Potash Corp. [WPX-TSX] has over 860,000 acres of potash per-mits and applications in Manitoba and Saskatchewan. Its Milestone property is located 80 km southeast of The Mosaic Company’s Belle Plaine mining lease. The Belle Plaine Mine is home to one of the largest producing potash solution mines in the world. Western Potash has secured over 2,550 acres at the company’s pre-ferred plant site location. The site is large enough to contain all intended plant site facilities for the expected life of the mine. The Russell-Miniota Project lies in the southwest corner of Manitoba. The prop-erty is 55 km from the US border, with access to all necessary infrastructure. The Trans-Canada Highway and railway lines intersect the property.

PHOSPHATEAguia Resources Ltd. [AGR-ASX] is exploring and developing its potentially large phosphate projects and other phos-phate opportunities in Brazil. Its two main properties are the Mata da Corda Phosphate Project and the Lucena Phosphate Project. Mata da Corda is located within 150 km of the three largest phosphate mines in Brazil: Araxá (Vale S.A.); Tapira (Vale S.A.); and Catalão (Anglo/Vale S.A.). The three mines together account for 95% of the phosphate

production in Brazil. Within this trans-portation corridor there are 32 major bulk fertilizer blenders. Mata da Corda covers about 310,000 hectares and is located in southeast Brazil.

The Lucena phosphate project covers 73,361 hectares in northeast Brazil.

Plains Creek Phosphate Corp. [PCP-TSXV] is advancing the Farim Phosphate Project in Guinea-Bissau, West Africa. The company says the project contains measured and indicated resources of 84 million tonnes at 29.9% P

20

5 (phosphate rock) and addi-

tional inferred resources of 44 million tonnes at 29.8% P

2O

5 and a 25-year mining plan of

68 million tonnes at 29.9% P2O

5

In 2009, Plains Creek signed a comprehen-sive production agreement with the Guinea Bissau government. Features of the agree-ment include production license, mining lease and incentive agreement; 100% own-ership with no government participation; 25-year life of the agreement, renewable for 25 years; port, roads, no government taxes or license fees; 10-year tax holiday from start of commercial operations; 2% tax deductible royalty on production. A bankable feasibil-ity study is underway and is expected to be completed by Q4 2011.

PotashCorp. [POT-TSX] has a per-mit to mine phosphate for more than 30 years at Aurora, North Carolina. In 2010, PotashCorp.’s Aurora facility commissioned a new sulphuric acid plant and invested in truck-and-shovel mining equipment.

Stonegate Agricom Ltd. [ST-TSX] is engaged in the acquisition, exploration and development of agricultural nutri-ent projects. Stonegate is undertaking to explore and assess the potential for the development of its two principal assets, the Mantaro phosphate project in Peru and the Paris Hills phosphate project in Bear Lake County, Idaho. The Mantaro phos-phate property is located about 250 km east of Lima, Peru. The property contains 12,800 hectares that trend in a northwest-erly direction. The Paris Hills Phosphate Project in Idaho contains three patented lode mining claims and 16 contiguous fee parcels covering a total of approximately 2,114 hectares. Operators in the area

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include Agrium Inc., Monsanto Company and J.R. Simplot Company.

The Mosaic Company [MOS-NYSE] has its main phosphate production facilities in Florida and Louisiana. Florida provides 70% of the United States’ phosphate rock supply and 20% of the world’s phos-phate fertilizer supply. Mosaic says it is the world’s leading producer of fertilizer made from phosphate. Mosaic operates five phosphate mines and three fertilizer manufacturing facilities in Florida.

Vale S.A. [VALE-NYSE] produces phos-phate at the Bayóvar Mine in the province of Sechura, Peru. The Bayóvar Project has a mine that can produce 3.9 million tonnes per year, a phosphate concentration plant, a 32-km road, a conveyor belt system and a maritime terminal.

Vale is developing other phosphate proj-ects in Peru and has potash ventures in Argentina and Canada. n

Legumex Walker Inc. [LWP-TSX] was formed recently in Winnipeg when two large Prairie specialty crop companies and a Washington state canola-crushing operation merged. The new company will combine the Roy Legumex Group of Companies of St. Jean Baptiste, MB; Walker Seeds Ltd. of Tisdale, SK; and 85% of Pacific Coast Canola of Seattle, WA. Roy Legumex Inc. has four processing plants in St. Jean Baptiste, Morden, Plum Coulee (all in Manitoba) and Richardson, SK. Walker Seeds also has four processing plants, all in Saskatchewan. The PCC canola-crushing operation has not yet been built. Special crops generally include lentils, peas, beans and chickpeas as well as sunflower seed, mustard seed and canary seed. The Seattle-based CEO of Pacific Coast Canola, Joel Horn, will be CEO of the new company to be headquartered in Winnipeg.

Electra Gold Ltd. [ELT-TSXV] is exploring its 800-hectare Lang Bay Kaolin Project 15 km southeast of Powell River, British Columbia. Earlier exploration led to the discovery of quality primary kaolin and sec-ondary kaolins which laboratory testing and market research have identified as having filler and ceramic potential. The deposit is also known to contain gallium and ger-manium. Electra is testing and evaluating bulk samples and working with potential customers to develop a product that meets their specifications. n