Chatham Rock Phosphate Ltd. has advised shareholders that a final decision has been taken by the European Parliament and the European Council to limit the sale of phosphate-based fertilizers containing high levels of heavy metals everywhere in the European Union from 2022 and to introduce voluntary green labelling for fertilizers with less than 20 milligrams cadmium per kilogram P2O5 (phosphorus pentoxide), starting this year.
The decision is aimed at improving the safety and sustainability of agriculture in Europe as well as reducing risks to human health and the environment around the world.
The decision of the European Council is the final step to establishing the cadmium limit in phosphate-based fertilizers across Europe. European Union-wide cap on cadmium levels will come into full effect in three years.
A number of European countries as early as the 1980s already recognized the importance of this issue and unilaterally introduced strict cadmium limits for fertilizers. Limits are currently in place in 21 European Union countries, with the strictest in Switzerland, which limits cadmium to 21 milligrams per kilogram P2O5 in 1986, Sweden (44 milligrams per kilogram P2O5), the Netherlands (31 milligrams per kilogram P2O5), Hungary and Slovakia (20 milligrams per kilogram P2O5), and Finland (22 milligrams per kilogram P2O5).
The implications for Chatham Rock Phosphate
Shareholders will recall that the company referred last year to an article by Richard Taylor in International Policy Digest that commented on the effects of the proposed lowering of accepted cadmium levels in phosphate rock imported into European Union countries.
In this article, it was estimated that a lowering of the limit to 20 milligrams per kilogram will effectively bar 95 per cent of phosphate ore from entering the European Union market.
Chatham Rock Phosphate cannot confirm that estimate, but the company does know that the reduced cadmium limits will affect a significant proportion of traded rock phosphate, including rock sourced from Egypt, Israel, Boucraa and Youssoufia (Western Sahara/Morocco), Senegal, Togo, Tunisia, Nauru, and Christmas Island.
As the European Union ban on high cadmium levels has arisen due to food safety concerns, it would be logical to assume that similar restrictions will occur in other regions. There have been voluntary restrictions in place in New Zealand for many years.
According to Chatham Rock Phosphate managing director Chris Castle, “The good news for Chatham Rock Phosphate shareholders is that cadmium levels in Chatham Rise rock phosphate are among the lowest in the world.”
Mr. Castle said the rock, located on the Chatham Rise seabed east of New Zealand, showed an average of 2.2 parts per million (expressed as milligrams per kilogram of phosphorus) from a range of samples gathered by Chatham Rock Phosphate in 2012 from 11 separate locations. The lowest value was 1.3 parts per million with a high of 5.3 parts per million.
Rock phosphate is already the scarcest of the three fertilizer constituents used to sustain world food and primary sector production. And if worldwide sales restrictions are placed on 95 per cent of that resource the likely effect on the market value of the remaining 5 per cent of traded phosphate rock (and its producers) can only be imagined.
About Chatham Rock Phosphate Ltd.
Chatham Rock Phosphate is the custodian of New Zealand’s only material resource of ultralow-cadmium, environmentally friendly pastoral phosphate fertilizer.
