US Stonegate expects permit for Idaho phosphate project by Q4

06 March 2014 22:14 Source:ICIS News

HOUSTON (ICIS)--Stonegate Agricom expects the permit for its Paris Hills phosphate project in Idaho to be received by Q4 2014 and it should commence operations shortly thereafter, the fertilizer company said on Thursday.

Located in southeastern Idaho, the project is near the centre of a historically know phosphate field. Feasibility studies have shown that the area has mineral reserves of approximately 16.7m tonnes of concentrate-quality phosphate rock.

The life of the underground mine is anticipated at 19 years and the company expects the operation to have a capital cost of $120m. Production capacity has been estimated at 904,000 tonnes annually of saleable phosphate rock concentrate.

Stonegate CEO Mark Ashcroft said that the project is exciting for the company not only because of its approach to producing high quality phosphate rock, but also because the phosphate market has begun to rebound since the end of last year. Ashcroft said it is an ideal time to be a domestic producer of phosphate as the US remains a net importer.

Essential to the company’s projected success at the Paris Hills project is that the site has been proven to contain a very high grade of the phosphate in the ore body. Measured at 30% phosphorus pentoxide (P2O5), the resources are equivalent to concentrate grade and are considered the highest grade deposit in the Americas.

The resource quality will greatly assist the operations, as Stonegate will mine the ore and bring it to the surface where there will be no need for a processing facility as typically required. The product will be trucked and shipped to customers as phosphate rock concentrate. The lack of the processing plant benefits the company as it lowers capital cost and construction time.

“We are a bit unique in that we have a very high grade of phosphate that we can send as rock concentrate, and we are close to infrastructure, and we have all the variables you need to put a project together. We are also very unique in that our permit process is by the state, so we have a lot of certainty with this project,” said Ashcroft.

Ashcroft said the Paris Hills site, located south of Soda Springs near the Utah border, was the area where the first phosphate was recovered in the state and that, through the use of modern, established mining techniques, the company is able to increase the commercial viability of the existing phosphate deposits.

Encouraging to the company’s outlook is the revitalisation of the phosphate market, which, like other fertilizers, faced a decline towards the close of last year.

Stonegate is counting on North America remaining a net importer of phosphate, and Ashcroft said that, considering the current geopolitical tensions in other rock producing regions of the world, it is an optimum opportunity for domestic producers and phosphate development companies.

“The phosphate market is beyond the verge of coming back, it has improved especially the prices of DAP [diammonium phosphate] over the past 12 weeks,” Ashcroft said. “One of the interesting aspects is that there is limited overcapacity and there remains an absolute need for rock concentrate. The US is a net importer and requires over 3m tonnes per year and Canada needs 1m tonnes per year.”

Ashcroft said that the company is currently in negotiations for an off-take agreement with potential customers. In its most recent corporate presentation, Stonegate mentions potential customers as being large fertilizer producers, trading companies and end-user groups seeking secure supply.

By Mark Milam