proedgewire article

PHOSPHATE: Interest is rising as to who is going to get the nod to develop a 2 billion tonne phosphate deposit in the West African nation of Togo. Already some big guns have linked up with the small number of companies that were invited by the Togolese government to submit tenders.

One of those tenderers, Australia’s Balamara Resources (ASX:BMB), is now aligned with India’s Deepak Fertilisers and Petrochemicals Corporation. This $10 billion Indian company has extensive experience in the production and sale of fertiliser products, including phosphoric acid. Deepak is among the largest producers of fertilizer in Western India and one of the largest producers of technical ammonium nitrate in the world, and it is a significant consumer of phosphoric acid.

The Indian market is also among the fastest growing fertilizer markets in the world.

Meanwhile, London-based Elenilto, one of the leading African mining developers and also selected as one of the short-listed companies, has brought in China’s Wenfu Group, described as one of the biggest Chinese phosphate and fertilizer makers. It uses what is described as “high-end” technology. Wenfu has committed to financing 40% of the project if Elenilto is successful.

Togo has required that tenders have a downstream, end-user alliance partner.

While poor and with just 7 million people, Togo is the world’s fourth largest phosphate producer but it wants to triple output as part of its plan to boost the economy and standard of living. The country intends to produce phosphoric acids or fertilizers rather than ship phosphate. You can see by looking at the industry guide, the Morocco prices (per tonne): phosphate is worth $180 to $200, diammonium phosphate $555 to $585 while merchant grade merchant grade Phosacid (MGA) commands between $835 and $1,100 a tonne.

Even more valuable is superphosphoric acid which now fetches up to $1,265 a tonne. The great advantage of the liquid fertilizers is that, unlike the granular ones, they don’t need irrigation or rain to make them effective.