Seven companies now locked into SoP race

Seven companies now locked into SoP race


Agribusiness
The search for potassium-rich brine beneath remote WA salt lakes, suitable for the production of Sulphate of Potash fertiliser, has intensified. This is a picture of Agrimin Ltd's drilling program on Lake Mackay on the WA/Northern Territory border.

The search for potassium-rich brine beneath remote WA salt lakes, suitable for the production of Sulphate of Potash fertiliser, has intensified. This is a picture of Agrimin Ltd's drilling program on Lake Mackay on the WA/Northern Territory border.

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Seven companies are looking to tap into the market for the SoP market.

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AT a global price of US$500-$600 per tonne for SoP since 2014 and average premium of US$270/t over chloride-carrying MoP, relatively low-cost production possibilities in WA have sparked a flurry of interest in fertiliser.

The global market for SoP is about seven million tonnes a year and growing.

Australia imports just 40,000t of that.

Main producer and user China is looking to outsource more of its SoP supplies as tougher domestic environment legislation hits decidedly non-green production methods used for about half its supply.

With outback WA salt lake brine and blue sky solar evaporation cutting estimated SoP production costs to as low as US$178/t free on board at port ready for export, sales and profit margin potential has seen a core group of four Perth-based companies investigating SoP swell to at least seven.

While much of a global SoP market could in theory be taken over by multiple WA producers exporting a premium product, in reality pre-production capital costs - somewhere north of A$120 million at this stage - required to identify a resource and develop evaporation and process facilities to exploit it, is likely to see not all make it into production.

Apart from APC, one of the leaders, this is what some of the other prospective local SoP companies are up to.

Salt Lake Potash (SO4)

SO4 holds tenements at Lake Wells, like APC, but last year transferred plans to be first to produce commercial SoP to Lake Way near Wiluna, initially pumping hypersaline brine from a former gold mine open cut pit to fast track the process.

It claims 73mt of SoP identified in a 30 kilometre long palaeochannel (ancient river bed) along the eastern side of Lake Way, plus 32,000t of SoP dissolved in brine in the Williamson pit.

SO4 has non-binding MoUs with China's largest fertiliser maker and distributor Sinofert Holdings Ltd and with Japan's Mitsubishi Corporation's global chemicals division.

It has harvested field-evaporated salts at Lake Wells and was first to create SoP samples from them with 5.5kg produced at SGS Laboratories, Perth, in April 2017.

Kalium Lakes (KLL)

KLL is on track to bring its Beyondie SoP project into production early next year and is the only company to have completed a definitive feasibility study on its project.

In the past fortnight it has secured access to A$102m in debt funding with a German bank, in addition to a $74m debt funding package approved by the Northern Australia Infrastructure Facility for construction of a processing plant at a string of salt lakes 160 kilometres south east of Newman.

KLL has just signed a 10-year sales agreement with international potash producer and distributor K+S to market 90,000t of its SoP globally, including in Australia, with an estimated income of $650m.

It has a 5.1mt SoP resource and plans production of 90,000tpa, ramping up to 180,000tpa and has produced SoP samples from evaporation-pond harvest salts.

It is also senior joint venture partner with BC Iron in a prospective SoP project at Lake Carnegie 250 kilometres east of Wiluna.

Agrimin (AMN)

AMN is investigating creating a 388km haul road corridor north from its Lake Mackay SoP project on the WA/Northern Territory border to Wyndham and establishing a SoP processing plant there.

During the last quarter 2018 AMN also lodged five exploration licence applications covering 2792 square kilometres of the Percival Lakes system in the Great Sandy Desert about 450km south east of Broome.

Historic sampling there recorded highest known potassium grades for an Australian salt lake.

AMN has harvested field-evaporation salts from a Lake Mackay trial and produced SoP samples from them.

Reward Minerals (RWD)

RWD has a deal with Martu people and the Western Desert Corporation going back to 2008 for its SoP project at Lake Disappointment beside the Canning stock route 300km east of Newman.

In the last quarter of 2018 an in-fill drilling program on the lake was delayed by amphibious equipment becoming bogged and breaking down.

Two new swimming pool-sized evaporation ponds were installed in November.

RWD has previously harvested field-evaporation trial salts.

Parkway Minerals NL (PWN)

PWN has an exploration licence for an area 123km south of Sandstone and also has the Dambadgee SoP exploration project near Dandaragan.

It has patented a potash extraction method.

BCI Minerals (BCI)

BCI Minerals is transitioning out of iron ore into SoP.

Apart from a junior partnership in a joint venture with KLL at Lake Carnegie, BCI has its own SoP project near the Pilbara coast at Mardie where it has completed a positive pre-feasibility study on a solar evaporation operation producing 3.5mtpa salt and 75,000tpa SoP.

A definitive feasibility study is underway with all approvals and a final investment decision targeted by late next year.

Trigg Mining (yet to list)

Trigg has tenements up to 200km east of Laverton based on salt lakes Throssell, Rason and Hope Campbell, plus palaeochannels closer to Laverton.

It plans a capital-raising share issue later this year to develop its holdings for SoP production.

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