Potash project listing 2023

PROJECT LISTING

Potash project listing 2023

Fertilizer International presents a global round-up of current potash projects.

NOTES:

Greenfield projects (G): generally, these must have reached the detailed/bankable feasibility study (FS) stage for inclusion.

Brownfield expansions (B): capacity indicates incremental additions, not total capacity.

PROJECT TYPE:

G Greenfield

G* Greenfield ramp-up/expansion

B Brownfield expansion

CM Conventional mine

SM Solution mine

LBE Lake brine extraction

PRODUCT:

MOP Muriate of potash, KCl

SOP Sulphate of potash, K2 S04

START-UP DATE:

N/A Not available or provided

PROJECT STAGE:

FS Feasibility study

P Permitted

UC Under construction

C Completed/commissioned

BRAZIL POTASH

The Autazes potash project

Brazil Potash is developing the Autazes potash project in Brazil’s Amazonas state near the town of Autazes, 120 kilometres from the city of Manaus. The 2.2 million t/a capacity project, although located deep in the country’s interior, is advantageously, situated just eight kilometres from the Madeira River, the Amazon’s biggest tributary.

If it gets the go ahead, Autazes’ output could eventually supply 20 percent of Brazil annual potash consumption of around 12.6 million tonnes. Importantly, the project’s ‘in-market’ position, close to Brazil’s major farming regions, and the potential for river barge transportation, provides Brazil Potash with a cost and transit time advantage over international suppliers.

The company is forecasting a delivered MOP cost of $166/t (cfr Mato Grosso) for the project with product transit times to domestic farming regions of just 2-3 days. That compares to delivered costs in the $270398/t range for its overseas competitors who can face transit times of 100 days or more, including port demurrage days.

Brazil is currently import dependent for 98 percent of its potash demand. Mosaic Fertilizantes is the country’s only major potash producer currently, operating the 500,000 t/a capacity Taquari mine in Sergipe.

The Autazes project involves the construction of an underground mine, an ore processing plant, a loading port, and the expansion of the road linking the mine site to the port.

The project is well advanced, having completed both a bankable feasibility study (BFS) and environmental and social impact assessments, with $240 million having been raised for its development to date. Most of the necessary permits are said to be in-hand and the required land mostly purchased.

Autazes will require a further capital investment of $2.5 billion (after tax) and a 4-5 year installation and construction phase before it can enter production. The project has sufficient reserves for a 23-year operational life at a nameplate production capacity of 2.2 million t/a.

“If it gets the go ahead, Autazes’ output could eventually supply 20 percent of Brazil annual potash consumption of around 12.6 million tonnes.

Autazes has the potential to generate annual earnings (EBITDA) of $1 billion and offers a post-tax internal rate of return (IRR) of more than 20 percent, according to the project’s feasibility study. The project’s capital intensity is less than $1,021/t with an estimated operating cost (opex, f.o.b. port) of $87/t at its full run rate.

Brazil Potash plans to have 80 percent of Autazes production output covered by offtake agreements. The company already has several agreements in place with Amaggi Group, one of the world’s largest private soybean producers.

These include:

• A binding ‘take of pay’ offtake agreement for around 500,000 t/a of potash
• A marketing agreement to sell the project’s remaining potash tonnages annually
• A river Barge transportation agreement to ship the initial potash output from Autazes to inland ports close to major farming regions in Brazil.

Brazil Potash is also committed to potash industry leadership on sustainability and innovation, and highlights the following aspects of the project:

Potash ore core sample, Autazes potash project, Amazonas, Brazil

PHOTO: BRAZIL POTASH

• Substituting local potash supply for overseas sources could potentially avoid 1.2 million tonnes of CO2 equivalent emissions
• The plan is to sell a portion of the project’s potash production at subsidised rates in exchange for commitments by farmers not to burn the Amazon rainforest
• Providing a domestic source of potash helps ensure food security
• Construction on cattle land at Autazes minimises its rainforest impacts.

Having already been granted a Preliminary License (LP), Brazil Potash is currently in the process of securing an installation license (LI). This will provide the necessary authorisation to begin construction and is contingent on the approval of the project’s mine development plan (PAE) and basic environmental plan (PBA).

Although not located on indigenous land, Autazes is sited within 10 kilometres of two indigenous reserves which therefore have a legal right to be consulted. In September, the local Indigenous people, the Mura, signalled their support for the Autazes potash project by voting in support of its construction as part of a consultation process.

As a final hurdle, Autazes will also require an operational license (LO) from Brazil’s Mining and Energy Ministry before it can start production. This is to ensure the mine and plant are compliant with domestic industry codes.

ASIA-POTASH

Laos emerges as a major potash player

An Asia-Potash technician uses an innovative industrial smartphone to make a video call from a cavern 300 metres underground at its potash mine in Laos.

PHOTO: HUAWEI

In a milestone for Southeast Asia, Chinese developer Asia-Potash (Sino-Agri International Potash Co Ltd) successfully completed and commissioned the first one million t/a capacity phase of its potash mining project in Khammoung province, Laos, in 2021. The project’s potash capacity was subsequently expanded to two million t/a in March 2023.

Asia Potash has mining rights in Khammoung province covering 215 km2 (Dongtai and Phonexay-Nong Bok mines) and exploration rights for a further 49 km2 (Nonglome mine). This area encloses more than six billion tonnes of ore reserves. After processing, these have the potential to generate more than one billion tonnes of saleable, high-quality muriate of potash (MOP).

Asia-Potash has plans to incrementally raise the project’s potash production capacity in two further phases – to three million t/a by 2024 and then to 5-7 million t/a output during 2025-26. The company believes that its potash production in Laos could ultimately expand to 7-10 million tonnes, depending on market demand.

Khammoung is in central Laos. Asia-Potash’s mine site in the province is located 380 kilometres south of the capital Vientiane, 180 kilometres from the Laos-Vietnam border to the east, and 40 kilometres from the Third Thai-Laos Friendship Bridge to the west.

The mine has good access to the 1,409 kilometre long Asian Highway 13 (AH13) that runs from Thailand through Laos to Vietnam. This transnational road heads north to Vientiane, offering links to the China-Laos railway. The mine has other eastwards road connections with the Vietnamese ports of Vung Ang, Glo and Hai Phong, some of which have wharves supporting potash shipments. Mine-to-port transport should also improve in future as the route of the planned Vientiane-Vung Ang railway will pass near the mine site.

Asia-Potash has developed and installed innovative proprietary ore mining and processing technologies at its Laos potash operations. These include innovative dissolution and crystallisation systems and solid-liquid separation equipment. The company says it is committed to ‘smart mining’ and the introduction of digital and fully automated potash mining operations in Laos in future.