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PHOSPHATE demand keeps rising - as do prices, with phosphate rock now commanding about $US200 a tonne.

But the local phosphate sector has been very quiet of late - unlike the frenzy that afflicted those stocks back in early 2008.

But the global food crisis has not gone away. Nor has the loss of arable land (either in terms of degradation, or being smothered by urban sprawl).

In fact, we have the reverse of 2008. Then, the fertiliser stocks leapt ahead of food prices and fertiliser costs; now those same stocks are lagging behind the other indicators. That was when phosphate rock went through $US400/t and was followed by potash hitting $US1000/t.

But there is some action. Today, Golden Cross Resources (GCR) announced it has begun drilling at its Mt Isa phosphate projects. It certainly needs some sort of circuit breaker to get out of the share-price doldrums.

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Related CoverageLaundry detergents to lose the phosphate The Australian, 12 Jun 2011Sultan Corp chases phosphate prize The Australian, 8 Jun 2011India joins forces with Minemakers The Australian, 2 Jun 2011Minemaker shares jumps on India talks Perth Now, 18 May 2011Minemakers jumps 18pc on Indian talk The Australian, 18 May 2011End of sidebar. Return to start of sidebar.
The company has a phosphate resource at one prospect and is now defining that. The rig will then move to two other targets. All three have phosphate but there is as yet no JORC-compliant resource. The company is looking to early production.

While Phosphate Australia (POZ) seems to focus its attention on other commodities, we should be hearing updates soon from Krucible Metals (KRB), which has the good fortune to have rare earths, dominated by yttrium, overlying its phosphate in Queensland, and Celamin Holdings (CNL), with ambitions in Tunisia.

Meanwhile, broker Intersuisse has put a 'buy' on Minemakers (MAK), which is trading at 36c today. This was the stock that hit $2.78 during that 2008 boom. Intersuisse has valued the company at $2.06 a share. The company is moving toward a joint venture with an Indian company to develop the Wonarah project in the Northern Territory.

Minemakers also has a 48 per cent stake in a marine phosphate deposit, with plans to dredge the seabed off Namibia. First production is timed for 2013.

The market - as with so many commodities - is being affected by China, which has been an exporter of the fertiliser feedstock but is now in transition to a net importer, a process that will be completed by 2013. Many supply sources are nearing exhaustion.

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The writer implies no investment recommendation and this report contains material that is speculative in nature. Investors should seek professional investment advice. The writer does not own shares in any company mentioned.