18th AFA Int’l Annual Fertilizer Forum & Exhibition Feb., 7-9-2012, Sharm El-Sheikh , Egypt Maritim Jolie Ville Hotel
Phosphate Resources: Future for 2012 and Beyond
Mr. Mark Evans, Consultant, BC Insight UK
Phosphate Resources: 2012 and beyond Mark Evans, Fertilizer International, BCInsight Ltd
Organisers: AFA International
Background The amount of phosphate rock reserves and resources has become an issue of contention and speculation. Certain academic studies suggest that the production of phosphorus (P) will peak in the next 25 years or so and then decrease as reserves become depleted. Because P is critical to nutrition but is a non-renewable resource, the potential consequences for world agricultural production and food security are linked to the notion of “Peak Phosphate�. Let us examine the Peak Phosphate concept in the context of the estimates of world phosphorus reserves and resources.
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Outline of presentation • • • • • • • • • • •
Definitions: reserves vs. resources Main sources of P: sedimentary and igneous phosphate rocks The basis of the Peak Phosphorus debate Latest assessments of global phosphate reserves and resources Who’s who among the leading phosphate suppliers Recent market entrants Capacity expansions by the existing suppliers Junior mining projects Phosphate rock price trends Longer-term issues (recycling, P extraction from gypsum, per capita P consumption) Conclusions
Definitions Reserves: Phosphate rock that can be economically produced at the time of the determination to make suitable products, reported as tonnes of concentrate.
Resources: Phosphate rock of any grade that can be produced at some time in the future, including reserves. (S. Van Kauwenbergh, IFDC)
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Main sources of P Sedimentary Phosphate Rock: • • •
Carbonate apatite 80-90% of world production Present or former continental margins
Igneous Phosphate Rock: • • • • •
Fire-formed (fluor-chlor-hydroxl-apatite) 10-20% of world production Shield areas, rift zones Exploited mainly in Russia, Republic of South Africa, Brazil and Finland Often low in grade (<5% P2O5) but can be upgraded to 35-40% P2O5
The Peak Phosphorus Debate • The term was first coined in a paper by Déry & Anderson published in Energy Bulletin in 2007 • Authors sought to apply the Hubbert linearisation analysis to P reserve and production data, concluding that a peak had already been reached in 1988. • Production curve in 2007 was in decline (terminal?) • Global URR (ultimately recoverable reserve of P) was 8 billion tonnes.
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Taking the issue further: The Story of Phosphorus: Global Food Security and Food for Thought (Cordell, Drangert & White [2009].) • Assumed the inevitability of the Hubbert hypothesis • Unlike oil, which is part of a larger energy group, P cannot be replaced when it becomes too scarce • Fertilizer industry is less aware about long-term P security • The scarcity is more than physical, but extends to economic, managerial, institutional, geopolitical and data scarcities.
How much phosphate have we got? (Graph shows estimated reserves in billion tonnes) The basis of reserve estimates: •technical, potential markets, prices and costs of production; •studies and available manpower; •15-20-year long-term planning horizons.
On this basis: RESERVES ARE DYNAMIC – RESOURCES CAN BECOME RESERVES
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Phosphate reserves & resources 2010 Latest assessment of global phosphate reserves and resources The top 22 countries Country
Reserves million tonnes
Resources million tonnes
Algeria
260
Angola
130
600
82
3,500
260
2,800
5
125
100
3,350
23
330
Australia Brazil Canada Egypt Finland Iraq Israel
N/A
2,000
5,750
200
1,600
Jordan
1,500
1,800
Country
Reserves million tonnes
Kazakhstan
1,000(e)
Resources million tonnes 3,100
Morocco
5,700
170-340,000
China
3,700
6,800
Peru
100
10,000
Russia
200
4,300
Saudi Arabia
93
7,800
Senegal
80
250
1,500
7,700
100
2,000
South Africa Syria Togo Tunisia United States
60
1,000
100
1,200
1,100
49,000
Source: USGS via IFDC
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Welcome! New phosphate rock suppliers Country
Company
Location
Mine capacity Date on (000 t/a) stream
Peru
Vale
Bayóvar
3,900
September 2010
Saudi Arabia
Ma’aden
Al Jalamid
4,500
July 2010
Kazakhstan
Sunkar Resources
Chilisai
2,400 (trial production and sales)
2011
China
??
??
??
??
Phosphate exploration activity
Source: CRU/Markey
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Phosphate rock projects Established producers – capacity expansions and new sites Country
Company
Location
Planned mine capacity (000 t/a)
Planned start-up date
Algeria
Somiphos
Bled El Habda, Jebel Onk
7,000
2014
Brazil
Vale
Salitre, Minas Gerais
2,200
2014
Egypt
Misr Phosphate Co. Abu Tartur
2,000
Under study
Jordan
Jordan Phosphate Mines Co.
Eshidiya
2,000
2015
Morocco
OCP
Khouribga
20,000
2011-18
Mozambique
Vale
Evate
2,000
2017
Peru
Vale
Bayóvar II
1,900
2014
Country
Company
Location
Planned mine capacity (000 t/a)
Planned start-up date
Russia
JSC Acron
Oleny Ruchey
2,000
2012
Saudi Arabia
Ma’aden
Al-Khabra
5,000
2020
Syria
GECOPHAM
Charkiya
6,000
From 2013
Tunisia
Compagnie des Phosphates de Gafsa
Sra Ouertane
4-5,000
2012
Togo
SNPT
Kpalime
1,000
2012?
Forecast increase in phosphate rock capacity from existing suppliers (2011-15): 35 million t/a. Notes
• Phosphate rock prices are rising and new mines are being developed • It is a good climate for investment • Most expansions at existing suppliers relate to JVs and tie-ups for downstream phosphate production. Little additional export tonnage foreseen. (IFA) • China: known to be exploring new deposits as existing higher-quality reserves become depleted, but little first-hand information.
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Junior mining greenfield projects Country
Promoter/project
Estimated resource
Planned mine capacity (000 t/a)
Planned start-up date
Argentina
Marifil Mines, Neuquen, Mendoza
N/A
N/A
N/A
Australia
Minemakers Ltd., Wonarah, N. Territory
289 million tonnes @ 18.5% P2O5
N/A
N/A
Australia
Legend Int. Holdings Inc., Paradise Phosphate Project, Queensland
392 million tonnes @ 15.7% P2O5
1,250
2013
Australia
Korab Resources Ltd./GeolSec Phosphate, Rum Jungle, N. Territory
1.3 million tonnes @12% P2O5
30
2013
Australia
Arafura Resources, Nolans Bore, Northern Territory
3.9 million tonnes @ 12.9% P2O5
N/A
2013
Australia
Rum Jungle Resources, Ammaroo, Georgina Basin, Northern Territory
88 million tonnes @ 16% P2O5
N/A
N/A
Country
Promoter/project
Estimated resource
Planned mine capacity (000 t/a)
Planned start-up date
Brazil
Aguia Resources, Mata de Corda, Mina Gerais state
N/A
N/A
N/A
Brazil
Aguia Resources, Lucena, Paraiba state
N/A
N/A
N/A
MBAC Fertilizer Corp., Arrais-Campos, Belos Itarós, Tocantins state
58.8 million tonnes @ 5.01% P2O5
330
2012
MBAC Fertilizer Corp., Araxa, Minas Gerais state
N/A
N/A
N/A
Canada
PhosCan, Martison, Ontario
62.2 million tonnes @ 23.55% P2O5
2,000
N/A
Canada
Phosphate Canada, Lac-à-Paul, Quebec
78.34 million tonnes @ 7.24% P2O5
N/A
N/A
CongoBrazzaville
Cominco Resources Ltd., Hinda
107 million tonnes @ 13.3% P2O5
4,000
N/A
Brazil
Brazil
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Country
Promoter/project
Estimated resource
Planned mine capacity (000 t/a)
Planned start-up date
Kazakhstan
Sunkar Resources, Chilisai
293 million tonnes @ 10.6% P2O5
5,000
Some trial production under way
Namibia
Namibian Marine Phosphate (Pty) Ltd., Sandpiper offshore project, Walvis Bay
73.9 million tonnes @ 20.57% P2O5
3,000
2013
New Zealand
Chatham Rock Phosphate Ltd., Chatham Rise offshore
30 million tonnes @ 21% P2O5
100
N/A
Peru
Stonegate Agricom, Mantaro
39.5 million tonnes @ 10% P2O5
N/A
2013
Tunisia
Celamin Holdings, Bir El Afou
150-200 million tonnes @ 17-22% P2O5
N/A
2013
USA
Stonegate Agricom, Paris Hills, Idaho
19.0 million tonnes @ 30.6% P2O5
N/A
N/A
Phosphate rock price trends
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Phosphate rock price trends • Phosphate rock has historically been a relatively low-value bulk commodity. • Prices flat-lined before the commodities boom of 2007/08, but have stayed at firmer levels since 2009/10. • 2008/09 roller-coaster: surge from <$45/t in Feb 2008 to $430/t by Aug 2008 - comparable with surge in oil prices. • Currently less volatile and cyclical than other fertilizer and raw material prices. • Today in $80-110/t range. • Reduced volumes of rock trade as more production becomes committed to downstream production in integrated plants and in long-term supply contracts (e.g. Bayóvar) • Firm price trend expected to continue • New generation of mines require prices in $85-100/t to cover investment cost over life-of-mine period. (IFDC)
Medium-term output forecasts • IFA’s preliminary estimates of phosphate rock production in 2010 = 186.4 million tonnes, up 15% on 2009 and an all-time record. • Around 30 million t/a of rock traded. • Phosphate rock capacity forecast to rise from 203 million t/a in 2010 to 256 million t/a in 2015 – up 26%. • Increase in new capacity in North Africa, Middle East, Latin America and possibly Australia. US impasse, China unknown. • Expansions from current producers expected to add 35 million t/a out of total estimated increase in capacity of 53 million t/a. • Around 37 million t/a of new capacity to be earmarked for downstream processing. Additional 17 million t/a available for export. Source: Prud’homme, IFA
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Longer-term issues • Phosphate rock is a finite, non-renewable resource. • However, there is no evidence of a Peak Phosphorus event, nor is one foreseeable with the next 20-25 years. • Nevertheless the maximum recovery, utilisation and recycling of phosphate rock, fertilizers, by-products and wastes should be emphasised. • The industry has devoted only limited time and effort in recycling and extracting P from wastes, gypsum stacks, etc. • There is growing awareness of these longer term needs, but much R&D is required to create a better climate for enhanced P utilisation.
Conclusions • There is no real Peak Phosphate issue. • …but the debate has had the constructive purpose of focusing thoughts on making a more rational use of a non-renewable resource. • The world reserve of phosphate rock is not a static figure. • The cost of phosphate rock will increase as the lower-cost deposits are mined out and producers have to move more overburden, process lower-grade ores and harness increasingly more expensive technology to produce P concentrates. • Vertical integration with fertilizer production and JVs will be increasingly the norm. • Recycle – and cut P-containing waste. • More research is required – lots of it!
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Thank you for listening!
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