Robin Brumby potash article in The Australian

http://www.theaustralian.com.au/bus...043054824?nk=ca27af0c3267e50f017c6fcff6db7b43

Dividend tidal wave more a ripple
THE AUSTRALIAN SEPTEMBER 01, 2014 12:00AM
Robin Bromby
Business columnist Sydney

Potash on rebound
ONE piece of good news is that potash prices have begun moving upwards, signalling the effects of the crisis caused by a bust-up among the partners in the Russia-Belarus cartel may finally be subsiding. The fertiliser feedstock bottomed out at $US295 a tonne in January. In July spot prices hit $US310 a tonne, up from $US302.50 a tonne in June.

Toronto-based Scotiabank, in its monthly commodities note, points out that the pricing is not the only good news: the size of global shipments have rebounded significantly, and could come in 7 per cent higher than last year. The sales have been boosted by strong demand in North America, record fertiliser application in Brazil — linked to higher soybean plantings and robust coffee prices — and a modest pick-up in purchases by palm oil growers in Indonesia and Malaysia. Brazilian potash imports increased 24 per cent in the first six months compared to the first half of 2013 Scotiabank is expecting another jump early next year when China negotiates new contracts: analyst Patricia Mohr predicts a 10 per cent leap from the present $US305 a tonne.

So last week was not too bad a timing for Triumph Tin (TRI) to venture into this commodity. The former Avenue Resources, which has been pinning its hopes on a tin project in Brazil, has now picked up a potash project in that country. Brazil has been desperate to get a potash industry going as it still imports 91 per cent of its needs. Triumph says 3D seismic has confirmed its ground holds a possible northern extension of the potash being mined by Vale. But market interest is muted: only $6400 worth of TRI stock has been traded in the past 30 days.

Meanwhile, Global Resources Corp (GRM) has issued 7.5 million shares to Reward Minerals (RWD) for all the technical data covering the Lake Mackay potash brine project in Western Australia. (Reward at present is fully occupied with the scoping study of its own brine project at Lake Disappointment.) As Pure Speculation has noted previously, potash in old salt lakes have a much lower cost profile than the underground propositions. For example, Chinese and Japanese interests are looking at developing a potash mine in New Mexico, the expected development time being seven years.

Brine deposits are very shallow and the potash can be extracted by evaporation. GRM’s new presentation underlines what this column has been harping on about for years: with 71 million new mouths a year around the world requiring feeding, and arable land areas shrinking, fertiliser’s future is assured. Moreover, this project will produce sulphate of potash, a non-chlorine product and vital for some types of plants (including strawberries and tea). World production of SoP stands at six million tonnes a year compared with 55 million tonnes of chloride-heavy muriate of potash. SoP not only commands a much higher price, but Scotiabank says all grades of SoP are in short supply.

And South Boulder Mines (STB) has begun a new round of drilling at its large potash resource in Eritrea.