Mak gets a mention in the weekend australian article by robin bromby
Thanks to the poster on the PEK thread then on the RWD thread
In a rush to arrive at the potash party Weekend Australian (Australia) - Saturday, January 15, 2011 Author: ROBIN BROMBY
We have to play catch-up in response to the surge in demand for fertiliser
BHP Billiton tried to buy North America's biggest potash producer last year, India is experiencing a shortage of potatoes and onions, and the UN is warning that world food prices will rise further.
All of these are indicators that one of the big issues of 2011 will be agricultural production.
And that means fertiliser, particularly the two mineable commodities potash and phosphate.
Food pressures are being felt everywhere. Last week it was reported the prices of the Indonesian staple the chilli pepper have been rising so fast that many people can no longer afford them. This followed the potato-onion shortages in India and of cabbage in South Korea.
Last year drought compelled Russia to stop exporting wheat. This year, the Queensland floods are likely to add further pressure to food supplies and prices, and not just locally.
And then there are the less noticed disasters: food prices have soared in Colombia in recent weeks after horrific flooding and mudslides that killed nearly 300 people.
Last week the UN's Food and Agricultural Organisation reported that, in December, its food price index was at its highest point since records began in 1990. It predicts there will be crises ahead with surging prices of cooking oils, cereals and sugar.
Food price riots have been occurring with increasing frequency, the most recent taking place in Algeria after prices for staples rose more than 20 per cent.
Now World Bank president Robert Zoellick has added his voice, warning this month that rising food prices are a threat to global growth and social stability.
At the same time, there are now predictions of a phosphate crunch in the US as farmers try to restore soil quality. Many could not raise finance to buy fertiliser during and after the global financial crisis, and now have to put back nutrients into the soil after recent cropping seasons.
The Washington-based Fertiliser Institute estimates that phosphate use will be up 10 per cent this year after leaping 30 per cent in 2010 as agricultural prices rebounded. Potash use is forecast to rise by up to 12 per cent this year.
There are few recourses other than to fertiliser. The world's arable land area is shrinking, and if the climate alarmists are right, processes such as desertification will accelerate. Then there is the demand from biofuel manufacturers for more crops grown on land once used for food production
Yet the world is demanding more food as the global population grows, and not just more food but better food, as living standards rise. Chinese rural dwellers eat about 10 times the amount of meat they did a generation ago. All this makes the need to improve crop yields all the more urgent.
The latest commodity report from Toronto-based Scotiabank says the three crops that use the most potash per hectare -- corn in the US, palm oil in Malaysia and Indonesia, and sugar cane in Brazil and elsewhere -- are all high, and so should lead to farmers increasing their fertiliser application this year. It also predicts that India will lift its potash prices this year.
Unfortunately, Australia is late to the game.World potash production is dominated by Canada, with a 53 per cent market share, followed by Russia (22 per cent) and Belarus and Germany with 9 per cent each. In phosphate, China produces 37 per cent of world output (although it is about to become a net importer as it meets its own food needs), with Morocco on 32 per cent (and dominating the seaborne trade), and the US with 7 per cent.
But our mining sector is trying to make up for lost time.
The most advanced player is Minemakers with its 1.2 billion tonnes of phosphate-bearing ore at its Wonarah project in the Northern Territory and its plan to mine phosphate from the seabed off the coast of Namibia.
Not far from Wonarah is a project being developed by Phosphate Australia, but that company has spent the better part of a year searching for a cashed-up partner to get that plan into action.
Korab Resources says it has a deal for a buyer to take 100,000 tonnes a year of phosphate from its Northern Territory project, Krucible Metals is well advanced towards getting its Korella deposit near Mount Isa into production, while Superior Resources is applying itself to a phosphate lode near the old Queensland cattle shipping town of Dajarra.
It used to be Rum Jungle Uranium, but that last word in the name has been changed to Resources, as the company works on both phosphate and potash in the Northern Territory.
New players keep arriving, too. Diversified industrial investor Luminus Systems has just pegged several phosphate prospects north of Mount Isa. BHP, while missing out on the acquisition of the giant Potash Corp of Saskatchewan, is now working on its own Jansen project in Canada.
Africa has been a big drawcard for Australian explorers.
On the phosphate side, Minbos Resources has ground in Congo-Kinshasa and Angola, Celamin Holdings in Tunisia and Peak Resources in Tanzania.
Two of the more exciting Australian-owned potash projects in Africa are South Boulder Mines' shallow deposit in Eritrea and the ground now being drilled in Congo-Brazzaville by Elemental Minerals.
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