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Perth firm plans Aust's 1st potash output
Rebecca Le May
September 15, 2011 - 5:29PM
AAP

A Perth firm plans to produce potash from its West Australian landholdings in what would be a first for the nation.

Potash, a group of water-soluble potassium salts mainly used in fertiliser production, is not currently produced in Australia.

Perth-based Potash West hopes to break into this tightly held market, which is dominated by about 10 mainly Canadian companies and a marketing OPEC-like "cartel", Canpotex.

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Demand for the fertiliser input is set to rise as the world strives to meet food needs amid expanding populations.

Newly listed Potash West is exploring one of the world's largest potassium-rich glauconite deposits in WA's Perth Basin, near the potash consuming Wheatbelt region, and hopes to complete a scoping study by December next year.

Managing director Patrick McManus said global population was projected to hit nine billion by 2050 but the amount of arable land per person was set to fall, meaning farmers needed to make the most of their crops through the use of fertilisers.

However, WA farmers he had spoken with were on average using half of their potash needs due to its high cost.

Mr McManus told a recent media briefing in Perth that crops weren't affected immediately when a farmer stopped or reduced the use of potash.

"It (productivity) will just slowly taper off," Mr McManus he said.

"But they do need to replenish the soil."

Chinese and Indian consumption drove the potash price from $US100 a tonne in 2004 to almost $US900 a tonne in 2008/09.

The price slumped to about $US350 a tonne when the global financial crisis hit and is currently about $US500 a tonne.

"Demand has picked up again now," Mr McManus said.

"The potash market is very strong and growing, and the investment community is also looking at new opportunities in that business."

Assuming its project is viable, Potash West will in the short term target the Australian market, which consumes about 500,000 tonnes of potash a year, 80 per cent of which is used in WA and Queensland.

In the long term, it hopes to secure Indian and Chinese customers.

Potash West seeks to define a resource of 50 to 70 million tonnes on its landholdings, compared to global annual consumption of about 60 million tonnes.

? 2011 AAP