AUSTRALIA'S potassium fertiliser sector quite literally faces a major turnaround from the first half of next year.
Instead of Australia's agriculture and horticulture potassium fertiliser requirements being imported - about 250,000 tonnes combined of Muriate of Potash (MoP) and Sulphate of Potash (SoP) a year - local production of SoP fertiliser will begin in March at Lake Way, near Wiluna.
By the end of the financial year, Western Australian company Salt Lake Potash Ltd - SO4 on Australian Securities Exchange listings - expects to be exporting Lake Way SoP to the rest of the world, bagged in containers via Fremantle port and bulk through Geraldton port.
A second WA company expects to begin producing SoP at a chain of salt lakes north-west of Wiluna in September next year.
Over the next 18 months Australia will transition from a net importer of potassium fertilisers to a net exporter.
All of it will be low emissions SoP, produced from remote WA salt lake brine with the aid of abundant outback sunshine.
Initially, the first two producers expect to meet local demand and export a total of about 300,000t a year of SoP.
At current exchange rates and a conservative US$600/t international price for SoP, the annual value of those exports will be about A$250 million.
But that will be just a start for WA's and Australia's newest export industry.
SO4, which has tenements it is investigating at a number of other salt lakes through the Goldfields, believes the global market for SoP is currently constrained by supply.
The likely second company into production expects to double its output within five years and at least three other prospective WA salt lake SoP producers hope to begin production and exports within that time frame.
But as first into production and a pioneer of a local SoP export industry, SO4 will have the pick of markets, as well as the kudos and recognition that come with being first.
Potassium is one of three essential macronutrients required by healthy crops and pastures and supplied by the NPK (nitrogen, phosphorus and potassium) fertiliser grouping.
It is recognised as promoting stronger plant growth and some drought and pest resistance while improving flavour of edible crops.
Potassium is normally applied as MoP because of a lower price, but MoP contains chloride.
The last thing some of the world's food-producing soils - including about a third of WA's Wheatbelt - need is added salt in the form of Chloride.
While SoP has the lowest salt index of all Potassium fertilisers, its price to date has restricted its use to higher value crops.
But that too could change next year.
As potassium-rich brine processors, SO4 and the other WA companies will be among the world's lowest cost SoP producers.
SO4's cash production cost per tonne is expected to be US$205 at an annual production rate from the end of next year of 245,000tpa.
About half of the world's producers are operating at a loss if the global SoP price sinks below US$400/t.
Headed by SO4, the Australian push into global SoP markets is expected to shift market division - currently about 70mtpa MoP to 7mtpa SoP - in favour of SoP, but no one yet knows by how much.
But SO4 knows the global SoP market it will enter as a new player next year with two fertiliser products, a premium fertigation grade water-soluble powder and a base, but better-than-standard grade, water-soluble powder, is growing at 12pc a year.
It might add a third granular SoP product later if the cost of additional equipment to granulate it can be justified by market demand.
The local push is strategically timed as tightening environment laws begin to strangle some 60 per cent of current global SoP production.
Much of the world's SoP, particularly in China and Europe, is made by converting MoP - mixing Potassium Chloride and sulphuric acid at extreme temperature in a Mannheim furnace to produce Potassium Sulphate and unwanted and difficult to dispose of hydrochloric acid.
Since 2018 agribusiness commentators have warned the growing global demand for SoP, as population grows and food production methods intensify, cannot continue to be met by Mannheim processing as regulations to protect the environment become tighter and discerning consumers focus on 'cleaner' and 'greener' food.
In 2018 a new management team at SO4 sat down to map out a timetable to production.
A previous management team had taken the momentous decision to shift SO4's headline SoP project from Lake Wells, north-east of Laverton in the Goldfields where it shared a brine resource with another prospective SoP producer, to Lake Way.
The attraction at Lake Way, as previously explained in Farm Weekly, was the former gold mine Williamson Pit filled with hypersaline brine at the north end of the dry salt lake.
It could enable SO4 to fast track its project ahead of at least four other WA companies looking to produce and export SoP, but it was up to the new management team headed by managing director and chief executive officer Tony Swiericzuk to make that happen.
Mr Swiericzuk had come to the SoP fertiliser industry from iron ore mining and he brought former iron ore colleagues with him.
From 2012 to 2017 as general manager, he had overseen record-time construction, commissioning and production ramp-up of Fortescue Metals Group's Christmas Creek mine in the Pilbara and pioneered low-cost iron ore mining along the way.
Mr Swiericzuk's background was in setting up low-cost mining facilities and making it happen quickly.
During a tour last week of SO4's 65pc completed project - 450 hectares of brine evaporation ponds on Lake Way and a giant Meccano set that is the processing plant construction site - he was confident a schedule of February commissioning, March production and exports by end of the financial year will be met.
Institutional and retail share issues in August raised the $98.5m equity needed to complete the construction and commissioning phase to move the project into income producing production, he said.
There are currently about 150 workers on site and accommodated in the recently completed 100 permanent room Lake Way village supplemented by temporary rooms for the construction phase.
From early this month there will be 250 people on site - including 35 electricians - for the October-December main processing plant assembly, Mr Swiericzuk said.
Major components constructed in the United States and China - including giant schoenite and SoP chrystallisers - had arrived three weeks ahead of time and the COVID-19 pandemic, if anything, had sped up the process as contracted suppliers raced to beat possible industry or transport shutdowns, he said.
Mr Swiericzuk said process plant design and construction contractor GR Engineering Services had assured him the first test run would be in January.
He said while SO4 was still awaiting environmental approval for future trenches at the southern end of Lake Way, that would not delay start up or the first 18 months' production.
The move from Lake Wells to Lake Way had saved SO4 at least six months by providing a ready brine resource which served as feedstock for its first train of evaporation ponds just south of Williamson Pit.
Since then, evaporation pond trains two and three had been completed north of the pit and a start made on train four.
Six evaporation trains are planned and the Williamson Pit will again become a brine storage once a short-term gold mining operation is completed there in February.
More than 62 kilometres of brine accumulation trenches across the northern end of the lake have been completed as well as three bores out of a planned six pumping brine at 39 litres a second.
Initially trenches will supply more brine, but across the 20-year life of SoP fertiliser production at Lake Way bores will eventually take over.
"It was a pretty ballsy move (to Lake Way)," Mr Swiericzuk said.
"We built the first 3.5 kilometres of trenching and 125ha of solar ponds on somebody else's leases (Blackham Resources' leases).
"But that got us going, got the momentum happening and let us trial all these different construction methodologies (for solar evaporation ponds and brine collection trenches).
"We fast learned what was the quickest and cheapest to do and we executed stage one (of on-lake development) within three months and executed stage two from November last year to February.
"So now we are at a stage where we are talking to our clients to find out what their preferred method of delivery is," he said.
SO4 has distribution agreements to deliver 60,000tpa over five years into Africa and the Middle East - Egypt is the world's third biggest user of SoP, behind China and North America -another 60,000tpa over five years into South America and other contracts to deliver 50,000tpa of SoP into North America and Europe over five years and into South East Asia and the Middle East over 10 years.
It also has an agreement to deliver 4000tpa into Asia over five years, but it has deliberately avoided exporting to China - not wanting to go up against the main global SoP player on its home turf.
"China is a hard market, because they represent 50pc of the global SoP production and 50pc of its use, but at the lower end of the profit spectrum," Mr Swiericzuk said.
"We decided we wouldn't go in there if we didn't have to and we don't have to."
Some 21,000tpa of its SoP production has been earmarked by SO4 for the local market, but exactly how it will be distributed in Australia is still evolving.
"We're keeping an open mind - there's the option of going out through distributors or dual market rates and obviously alternatives like from the mine gate," Mr Swiericzuk said.
"I think the local market will move quickly once they (farmers) realise it's a premium product."
Mr Swiericzuk and his team are rightly proud of the rapid development happening just off the Goldfields Highway about 12 kilometres south of Wiluna.
"It's extremely satisfying, we set out to have a crack and we're creating a new industry for WA and Australia," he said.
"But it's satisfying not only from the perspective of overcoming the challenges of creating a new industry, but from being able to produce a premium fertiliser product that will help improve people's lives around the world by enabling them to grow food."
