Australian SOP fertilizer production race enters final lap

Andy Hemphill

18-May-2021

LONDON (ICIS)–The chequered flag is being unfurled as the race to be first to market with potassium-rich sulphate of potash (SOP) fertilizer drawn from the barren wastes of Western Australia nears its conclusion.

Five developers are currently developing capacity to be able to sell SOP from Western Australia’s underground, brine-rich salt lakes.

Salt Lake Potash looks set to be the first firm to achieve commercial production, which is expected in Q2 of this year. Just behind, Kalium Lakes’ Beyondie operation is aiming for Q3.

Following are Australian Potash and Agrimin, with a first production target of mid-2023, and 2024, respectively.

Reward Minerals’ Lake Disappointment is yet to set a firm date.

All five producers are keen to take advantage of an expected wave of demand for SOP and high-potassium blended fertilizers over the coming years – with a particular focus on China, and the growing Asian markets.

‘Potash’ is an umbrella term used for fertilizers with a high potassium content. The most common form is muriate of potash (MOP), which is suited to mass-produced crops such as rapeseed.

MOP accounts for 95% of global potash trade. The SOP trade is far smaller, at 8-9m tonnes/year.

SOP is a chloride-free fertilizer suited to high-cost products like tobacco, fruit and some vegetables, and can be produced through the Mannheim process, which reacts MOP with sulphuric acid, or via brine extraction.

Extraction draws salt-rich water from beneath dry lake beds or inland seas, which is then evaporated to leave salts. This salt is processed into SOP, to be shipped around the world.

Developmental SOP producers in Western Australia

Company Location Estimated SOP resources (tonnes/year) Offtake agreements (tonnes/year) Expected first sales
Salt Lake Potash Goldfields 245,000 · Indagro, 70,000, five years, Americas/Europe/Africa.
· Unifert, 60,000, five years, Middle East/Africa.
· Helm, 50,000, 10 years, Asia/Middle East.
·  Fertisur, 30,000, five years, South America.
· WeGrow, 10,000, five years, Americas.
· Mitsui, 4,000, five years, unspecified.
Q2 2021
Kalium Lakes Beyondie 180,000 100% offtake from phase one project:
90,000 to German MOP major K+S, 10-year term.
Q3 2021
Australian Potash Lake Wells 150,000 100% contracted:
· 20,000 to Helm, for US.
· 30,000 to Helm, for Europe.
· 30,000 to Mitsui, for southeast Asia.
· 50,000 to Migao, for China.
· 20,000 to Redox, for Australia/New Zealand.
Mid-2023
Agrimin Lake Mackay 450,000 150,000 for China, via Sinochem Fertilizer Macao (Sinofert); 10 years 2024
Reward Minerals Lake Disappointment 400,000 None confirmed None confirmed

Earlier this week, fourth-placed Agrimin secured a 150,000 tonne/year binding offtake agreement with an arm of Sinofert Holdings, which is one of China’s largest potash fertilizer importers.

The agreement allows Agrimin to supply Sinochem Fertilizer Macao over a 10-year term, with pricing negotiated quarterly based on a Chinese SOP price index.

The agreement covers one-third of Agrimin’s expected Lake Mackay SOP production capacity of 450,000 tonnes/year, with the high-potassium fertilizer to be distributed only in China.

Focus story by Andy Hemphill

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