Demand for both phosphate and potash fertilizers is anticipated to continue growing as the world’s population increases and the amount of arable land decreases.
The phosphate market is expected to witness a compound annual growth rate of 5.3 percent between 2023 and 2030 to reach US$78.4 billion. Driving this growth will be increasing pressure on global food supply brought on by rising populations and climate change, as well as inflation and downstream costs. Phosphate is also increasingly becoming a sought-after battery material for the electric vehicle industry due to its use in lithium-iron-phosphate (LFP) batteries.
Thankfully, phosphate-mining production around the globe is expected to increase, with the largest areas of growth being Africa and the Middle East. Phosphate mining companies with project developments in Brazil, Kazakhstan, Mexico, Peru and Russia are all expected to contribute to increased phosphate rock production as well.
In fact, global phosphate mine capacity for contained phosphate is expected to increase from 63.6 million metric tons (MT) in 2023 to 69.1 million MT in 2027, according to the US Geological Survey’s latest phosphate report.
1. Arianne Phosphate (TSXV:DAN)
Market cap: C$43.62 million
Arianne Phosphate is moving forward at its development-stage Lac à Paul phosphate project in Québec. The company has secured initial offtake and marketing deals, and the project is fully permitted and construction-ready. High-purity phosphate production from Lac à Paul has the potential to supply not only the fertilizer markets, but the clean energy markets as well.
Arianne Phosphate is conducting a research program in collaboration with the Environmental and Biotechnology Research Group of Cégep de Rivière-du-Loup with the goal of developing a new breed of fertilizers using organic waste and the company’s phosphate concentrate. In October 2023, the research partners received a grant of C$727,500 from the Natural Sciences and Engineering Research Council of Canada to further their work.
In addition to agriculture, Arianne Phosphate is exploring the possibility of supplying high-quality materials to the energy sector, including for use in hydrogen fuel cells and LFP batteries.
In mid-2024, the company released favorable results from a pre-feasibility study for a downstream facility to transform igneous-based phosphate concentrate from Lac à Paul into a battery-grade phosphoric acid for use in LFP batteries. Highlights from the study include a pre-tax net present value of US$4.5 billion, an internal rate of return of 32 percent and a payback of 3 years.
2. Avenira (ASX:AEV)
Market cap: AU$5.64 million
Avenira owns the Wonarah phosphate project in Australia’s Northern Territory.
The site is considered one of the largest-known phosphate deposits in Australia, with two orebodies, Arruwurra and the Main Zone. At a 15 percent contained phosphate cut off, the site contains measured resources of 64.9 million metric tons at 22.4 percent phosphate, indicated resources of 133 million MT at 21.1 percent and inferred resources of 352 million MT at 21 percent.
Avenira is another phosphate company looking to supply the material to the LFP battery market in addition to the fertilizer industry. Last year, the company released a scoping study for an LFP cathode manufacturing project, and is planning to commence a feasibility study by December 2024. The company plans to initially use third-party feedstock for the plant.
Avenira’s Wonarah project also has the potential to supply high-grade yellow phosphorous to the agriculture sector, and the company is currently working with its strategic partner Sichuan Hebang Biotechnology (SHA:603077) to advance this goal.
3. Centrex Metals (ASX:CXM)
Market cap: AU$31.71 million
Centrex Metals owns the Ardmore phosphate rock mine in Queensland through its wholly owned subsidiary Agriflex.
The site has a JORC-compliant mineral reserve of 10.1 million MT at 30.2 percent phosphorous pentoxide that is contained within an existing mineral resource of 16.2 million MT. In Centrex’s half year ended December 31, 2023, Ardmore produced 66,035 metric tons of beneficiated phosphate.
Last year, Centrex inked a number of important offtake and partnership agreements, including binding offtake deals with Ameropa Australia and Ballance Agri-Nutrients for the purchase of phosphate from Ardmore. It also set up a memorandum of understanding between Agriflex and Neutrog Australia; together they will develop new organic and biological fertilizer products.
Centrix’s Stage 1.5 expansion is underway and expected for completion by the end of this year. ‘During December 2024, upon the conclusion of the Stage 1.5 Expansion, Ardmore will unlock a production run-rate of 625ktpa, transforming it into a highly cashflow positive asset for the Company,’ stated Centrex CEO and Managing Director Robert Mencel.
Looking over to the LFP market, Centrex has signed an MOU with Lithium Australia (ASX:LIT) for the potential development of an LFP and lithium manganese ferro phosphate (LMFP) cathode material manufacturing plant in Australia.
4. Chatham Rock Phosphate (TSXV:NZP)
Market cap: C$7.26 million
Chatham Rock Phosphate is focused on building a 2 million metric ton per annum international phosphate-mining and trading house targeting low-cadmium, organic phosphate. Chatham intends to be a major supplier of direct-application phosphate to the New Zealand and global agricultural sectors.
The company’s pipeline of prospective phosphate operations includes the fully permitted Korella phosphate and rare earths mine in Queensland, Australia. Last year, Chatham signed a lease for a 22 hectare site to establish the Korella phosphate distribution hub in Cloncurry. The hub will be an essential component of the company’s “pit-to-port logistics solution,’ which will address the challenge of transporting phosphate rock from Chatham’s Korella North, Korella Central and Korella South mines to the Port of Townsville.
In July, Chatham scored a major milestone with the Environmental Approval of its mining lease for the Korella North phosphate mine, and the company is targeting Q4 2024 for first production.
5. Fertoz (ASX:FTZ)
Market cap: AU$5.64 million
Fertoz markets and develops a range of organic fertilizer products in North America and Australia. The company feeds this business with phosphate rock from its operations in Montana, US, as well as Mexico.
Fertoz also has Wapiti and Fernie, two wholly owned rock phosphate projects in British Columbia, Canada, at which the company is currently working on mine permit renewals and bulk sample applications.
At Fernie, the company is projecting the second half of 2024 for the approval of four permits for production of 150,000 metric tons per year. The company is working towards bringing production online to allow it to supply its Canadian customers with Canadian phosphate fertilizers.
Through its products, Fertoz promotes sustainable agricultural practices that earn farmers carbon credits to offset emissions. The firm recently expanded its line of low-carbon and carbon-sequestering fertilizers and products. In its quarterly activities report for the period ending in March, Fertoz reported Q1 sales of 1,450 MT compared with 460 MT in Q1 2023.
6. Itafos (TSXV:IFOS)
Market cap: C$256.14 million
Itafos is a phosphate-based fertilizer and specialty products company with operations in Brazil and the US, as well as projects in Brazil and Guinea-Bissau.
Its Conda operation in Idaho, US, produces monoammonium phosphate, superphosphoric acid, merchant-grade phosphoric acid and specialty products, while its Arraias operation in Tocantins, Brazil, produces single superphosphate.
The vertically integrated company has five other phosphate-focused projects at various stages of exploration and development, including the construction ready, high-grade Farim phosphate mine project located in Guinea-Bissau and the vertically integrated high-grade Santana phosphate mine and fertilizer plant project in Pará, Brazil.
Itafos highlighted revenues of US$128 million in its Q1 financials report, up 7 percent over Q1 2023 on increased sales volumes. In April, the company released an updated technical report for the Conda fertilizer project, including an increased mineral reserve estimate and an extended mine life through 2037.
7. Minbos Resources (ASX:MNB)
Market cap: AU$50.29 million
Phosphate exploration and development company Minbos Resources is focused on building a nutrient supply and distribution business targeting the agricultural sector of the Middle Africa region. The company’s Cabinda phosphate fertilizer project is located in Angola.
Minbos holds a mining license for Cabinda, as well as a commercial site for its phosphate granulation plant in Angola. The company reached an important milestone in October 2023 with the receipt of a term sheet for a US$14 million loan facility from the Industrial Development Corporation of South Africa.
This July, Minbos provided an update about successful progress toward meeting the term sheet conditions as well as news that it will soon be converting its memorandum of understanding with Grupo Carrinho into a formal offtake agreement.
‘In light of these developments and progress regarding funding facilities, the Company is contemplating the immediate expansion of the plant,’ stated the press release.
8. Mosaic (NYSE:MOS)
Market cap: US$9.53 billion
Mosaic is one of the world’s largest producers and marketers of concentrated phosphate and potash crop nutrients. It has various phosphate operations in Florida, Louisiana and South America.
In April, Mosaic announced an agreement to exchange its 25 percent stake in Saudi fertilizer giant Ma’aden’s Wa’ad Al Shamal Phosphate Company for US$1.5 billion in Ma’aden shares.
Mosaic is a dividend stock, with its latest quarterly payout to shareholders taking place on June 20, 2024, at US$0.21 per share.
9. Nutrien (TSX:NTR,NYSE:NTR)
Market cap: C$34.35 billion
Nutrien, Canada’s largest potash company, is the product of the 2016 merger between phosphate-mining giants Agrium and the Potash Corporation of Saskatchewan.
The company is one of the world’s largest providers of crop fertilizers and services, with an agricultural retail network that services more than 500,000 grower accounts. In addition to its expansive portfolio of potash assets, Nutrien operates two large integrated phosphate-mining and processing facilities and four regional upgrading plants in the US.
Nutrien also pays a quarterly dividend to its shareholders. On July 19, the company paid out a US$0.54 per share dividend.
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
