Roberts - ASA Nutrient Cycling Symposium Potash

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Global Potassium

Reserves and PotassiumFertilizer Use

Terry L. Roberts,President, IPNI

Symposium – Global Nutrient CyclingMonday, October 6, 2008

2008 Joint Annual Meeting



Potassium (K) and Potash

• K present in most rocks

and soils

• Economic sources …

– sedimentary salt beds

remaining

from

ancient

inland seas (evaporite

deposits)

– salt lakes and natural

brines

• Potash refers to a

variety of K‐bearing

minerals



Common K Minerals

Mineral Composition K2O, %Sylvite KCl 63.1

Sylvinite KCl/NaCl mixture ~ 28.0

Carnallite KClMgCl26H2O 17.0Kainite 4KCl4MgSO411H2O 19.3

Langbeinite K2SO4

2MgSO4 22.7Polyhalite K2SO42MgSO42CaSO4H2O 15.6

Niter KNO3 46.5



Common K Minerals

• Sylvite (KCl) … abundant in

commercial deposits

• Sylvinite (KCl + NaCl) also

common

• Hartsalz … ore deposits with

SO4 salts (kieserite [MgSO4] or

anhydrite

[CaSO4])

are

limited

… Europe

• Langbeinite occurs New

Mexico and

Ukraine

KCl



World Potash Reserves

• About 100

large

buried

deposits + 100 brine

deposits of commercial

potential

• The world has an

estimated 250 billionmetric tons of K2O

resources

Source: U.S. Geological Survey



Potash Resources and Reserves

• Resources include proven, probable, and inferred

reserves

– Reserves: deposits

of

sufficient

quantity

and

quality

that

are

currently mined

– Reserve base: reserves + deposits that are marginally

economic or

sub

economic

• U.S. Geological Survey estimates global reserves at 18

billion t K2O

…

8.3

billon

t considered

commercially

exploitable.

Source:

U.S.

Geological

Survey,

Mineral

Commodity

Summaries

and

Potash,

January

2008



Potash Reserves and Reserve

Base

Reserve Base,

‘000 t K2O

Reserves,

‘000 t K2O

Source: U.S. Geological Survey, Mineral Commodity Summaries and

Potash, January 2008



Potash Deposits – North America

• World’s largest reserves

occur in Saskatchewan

• Ore is exceptionally high

grade (25‐30% K2O) at

depths of

950

‐1,100

m

increasing to > 3,500 m

• Uniform thickness (2.4‐3 m)

and mineralization

and

no

structural deformations

• Sylvinite, some

carnallite, and clay

Potash Reserves InSaskatchewan

Source: PPIC 1989



Potash Deposits – FSU

• FSU has extensive proven reserves of K minerals … second only

to the deposits in Saskatchewan

• Russia

– Verkhnekamsk

deposit

in

the

Urals

near

Solikamsk – Potash depth at 75 to 450 m in 13 potentially minable beds ranging in

thickness from 26 to 30 m (sylvinite) and 70 to 80 m (zone of sylvinite‐

carnallite).

– Mined beds

1.2

to

6 m

thick

with

15%

K2O

with

3 to

5%

insolubles

• Belarus – Starobinsk deposit is 2nd largest in ore body in FSU

near Soligorsk

– 30 potash

beds

in

4 horizons.

Most

mining

350

to

620

m

depth

in

second horizon (1.8 to 4.4 m thick)

– Sylvinite ore averaging 11% K2O and 5% insolubles

Source: Searls 2002, U.S. Geological Survey, Mineral s Yearbook; Stone, 2002, Canadian Minerals Yearbook



Potash Deposits – Western Europe

• Oldest deposits are the Hessen and Thüringen beds

in southern Germany

– contain 15

to

20%

sylvite,

kieserite,

and

carnallite

(~10%

K2O)

– Beds are relatively flat‐lying, but also folding, with some

barren zones,

sudden

thickness

changes,

etc.

making

mining difficult

• Also carnallite and kieserite deposits in central

Germany and

sylvite

and

carnallite

in

northern

Germany

• Sylvite deposits

in

England

and

sylvinite

in

Spain

Source: Searls 2002, U.S. Geological Survey, Mineral s Yearbook;

Stone, 2002, Canadian Minerals Yearbook



Potash Deposits

• Middle East:

K extracted

from

Dead

Sea

– contains an estimated 1 billion t KCl

• Latin America

– sylvinite and

carnallite

in

the

Sergipe

basin

in

Brazil

– KNO3 in Chile in Atacama Desert (est. 1 billion t NaNO3 and 100 million

t KNO3) and Salar de Atacama, a high‐attitude dry lake (brine est. at

120 million t KCl and 80 million t K2SO4

• Asia : Carnallite and K‐bearing brines in Qinghai and

Xinjiang Provinces

• Undeveloped Deposits

– Thailand, Argentina, Amazon Basin in

Brazil, Morocco, Poland, and additional deposits in the FSU

Source: U.S. Geological Survey, Mineral Commodity Summaries and

Potash, January 2008



Production of KCl and K2SO

4, Mt

Source: IFA Statistics



World Mine Production, 2007

‘000 t K2O




Canada: potash export by destination in

2007, ‘000 t K2

O

4,501

66

From Canada

1,900

3,340

580

214

Source: IFA Production and Trade Statistics



Russia: potash export by destination

in 2007, ‘000 t K2O

344

1,961

1,896

From Russia/Belarus

1,059

4,339


116

78



Germany: potash export by

destination in 2007, ‘000 t K2O

670

40

From Germany

109

430

126

52

1,515 92




Israel/Jordan: potash export by

destination in 2007, ‘000 t K2O

353

856

From Israel/Jordan

1,132

137

67

14496

3




World Potash Production and

Consumption,

Mt K2O




Regional potash consumption,

‘000 t K2O

0

1,000

2,000

3,000

4,0005,000

6,000

7,000

8,000

9,000

10,000

Western and Central EuropeEastern and Central AsiaNorth AmericaLatin

America

and

the

Caribbean

Africa

West AsiaSouth AsiaEast AsiaOceania




Potash consumption, ‘000 t K2O

• 4 countries accounted for two‐thirds of potash imports

– US 18%, Brazil 16%, China 21%, and India 9%




Global Fertilizer Consumption

Forecasts

to 2012/13 (Mt nutrients)

N P2O5 K2O Total

Ave. 2005/06

to 2007/08 (e)95.5 38.6 27.6 162.1

2012/13 (f) 115.6 45.7 33.0 194.3

Ave. Annual

Change

+3.2% +2.8% +3.0% +3.1%

Source: P.

Heffer,

2008.

Medium

‐Term

Outlook

for

World

Agriculture

and

Fertilizer

Demand

2007/08

–

20012/13. IFA Annual Conference, Vienna, Austria



Forecast Potash Demand Through

2012/13

0

1

2

3

4

5

6

% A v e . i n c r e a s e i n p o t a s h

u s e

% Average Annual Increase2005/06–07/08 vs. 2012/13

Source: P. Heffer, 2008. Medium‐Term Outlook for World Agriculture and Fertilizer Demand 2007/08 –

20012/13. IFA Annual Conference, Vienna, Austria



World potash supply/demand balance

15,000

18,000

21,000

24,000

27,000

30,000

33,000

36,000

39,000

42,000

45,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

‘ 0 0

0 t K 2 O

Supply of potash

Source: Prud’homme 2008. Global Fertilizers and Raw Materials Supply and Supply/Demand

Balances 2008‐2012.IFA Production and Trade




15,000

18,000

21,000

24,000

27,000

30,000

33,000

36,000

39,000

42,000

45,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

‘ 0 0 0 t K 2 O

Supply of potash Available for fertilizer






15,000

18,000

21,000

24,000

27,000

30,000

33,000

36,000

39,000

42,000

45,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

‘ 0 0

0 t K 2 O

Supply of potash Available for fertilizer Fertilizer Demand






• Supply/demand balance is considered very tight and

is expected to be so for the next few years …

triggered an

increase

in

world

potash

prices

100

600

500

400

300

200

2006 2007 2008

J F M MA JJ S O N DA J F M MA JJ S O N DA J F M MA JJ A

$ / t f . o . b .

V a n c o u v

e r

Potash prices,January 2006 – September 2008



New Potash Capacity

2008 to 2012

Year Mt K2O Country

2008 0.02009 0.84 Jordan, Russia, Israel, Canada, USA

2010 1.02 Canada, Russia, Israel

2011 1.14 Canada, Russia, Israel

2012 4.74 Canada, Argentina, Belarus, Jordan

Total 7.74





Tight supply/demand balance … new

interest in potash mining

• Saskatchewan is the world’s largest producer with

37%

of

supply

and

>

50%

of

global

potash

reserves – No potash exploration permits issued 15 years prior to

2004 … next 3 years the area under lease increased from

250,000

to

3

million

hectares – New companies … BHP Bilton, Potash One Inc., Potash

North Resource Corp., Athabasca Potash, Ivany Potash,

Sidon International Resources, Grizzly Diamonds Ltd., Alix

Resources Corp., Geo Minerals Ltd., and JSC Acron

• Estimated capital cost for a conventional mine … $2.8

billion,

excluding

infrastructure

outside

the

plant

gate

and with no production for 5‐7 years.



Why the increased demand for

fertilizer?• Increased food demand and less land to produce it

0

2

4

6

8

10

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

Population, billions

0.00

0.10

0.20

0.30

0.40

0.50

0.60

196119651969197319771981198519891993199720012005

Arable land per capita, ha

Source: FAO




fertilizer?

• Diets are changing …

more

protein• Requires more feed

grains to produce

protein – 7 kg/kg beef,

– 4 kg/kg pork, and

– 2 kg/kg poultry

0

10

20

30

40

5060

70

80

90

1995 1997 1999 2001 2003

Developed World Developing World

Source: FAO

Meat consumption, kg/capita/yr




fertilizer?

• Biofuels … continued expected growth … leads to

increasing demand

for

corn

and

other

crops

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2007 2009 2011 2013 2015 2017

M i l l i o n g a l l o n s

Ethanol

India

EU

China

Canada

Brazil

USA

0

1,000

2,000

3,000

4,000

5,000

6,000

2007 2009 2011 2013 2015 2017

M i l l i o n g a l l o n s

Biodiesel

Indonesia

EU

Brazil

Argentina

USA

Source: FAPRI

2008




fertilizer?

1998‐2007

y = ‐1.89x + 3816

R²

=

0.930

5

10

1520

25

30

35

40

1975 1980 1985 1990 1995 2000 2005 2010

% o f c o n s u m p t i o n

Year (2007 =2007/08)

World wheat plus coarse grains ending stocks

Source: USDA‐FAS, 12/2007



Low crop yields in the developing

world

(Ave. 2005 – 2007)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

Rice Corn Soybean

C r o p y i e l d , K g / h a

USA

ChinaIndia

Brazil

Source: FAO



Concluding Remarks

• Global potash supply/balance will remain tight

through

2012 – During this time demand will absorb capacity increases

– Potential surplus … 2.2 and 3.9 Mt K2O, which is considered

marginal given

plant’s

production

configuration

and

ramp

‐up stages

• 2012 … potential capacity should exceed demand



Concluding Remarks

• At present levels of production (33 Mt K2O per year)

and

with

current/planned

capacity,

the

industry

can

easily meet future demand

• Reserves (8.3 billion t) are sufficient to supply potash

for 250

years

…

another

250+

considering

the

reserve

base (18 billion t)

• Allowing for known resources (250 billion t) … there is

sufficient potash to meet demand for thousands of years



Thank You

Roberts - ASA Nutrient Cycling Symposium Potash

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