Chatham Rock Phosphate Ltd. notes with interest the continuing strong market prices of rock phosphate. This is despite declining nitrogen and potash market prices.
An article in World Fertilizer Magazine (May/June, 2023), helps explain why:
“Except for a small amount of production in Finland, there is no commercial mining of phosphate in the [European Union]. Traditionally, Europe has relied on two main sources: Russia accounts for almost 60 per cent, and Morocco around 40 per cent. While phosphate fertilizer imports from Russia have not technically been banned, complications arising from financial payment restrictions and transportation insurance premiums have greatly impeded their movement, not only to Europe, but to many consuming nations. Morocco, which has the world’s largest phosphate reserves, has been increasing its production to take advantage of the gap. State-owned [Office Cherifien des Phosphates] has announced that it will boost shipments by 50 per cent, and is building three one million [tonne-per-year] granular phosphate units at Jorf Lasfa. While farmers are calling for increased imports from Morocco, there is a complication. Production from the North African nation is relatively high in cadmium. The toxic trace element and its compounds can cause cancer, attacking the renal, digestive, reproductive and respiratory systems. Fertilizer is one of the major sources for the buildup of cadmium in soils, and, in 2022, the EU emplaced a cap of 60 milligrams per kilogram on cadmium levels in fertilizers. Producers were able to meet the cap by mixing Russian-sourced phosphate (which is significantly lower in cadmium than Morocco’s products), but now that option has largely disappeared.”
Conclusions that can be drawn from this state of affairs are:
Phosphate rock prices are not likely to fall for quite some time.
Low-cadmium rock phosphate is going to become increasingly highly sought after.
- Phosphate rock prices are not likely to fall for quite some time.
- Low-cadmium rock phosphate is going to become increasingly highly sought after.
All of Chatham’s rock phosphate that will be mined in Korella (Queensland), Makatea (French Polynesia) and on the Chatham Rise is ultralow in cadmium.
As such the company’s diversely located phosphate reserves are likely to be viewed by phosphatic fertilizer producers as increasingly attractive strategic products/assets.
Chatham’s reserves are expected to be able to sustain forecast production levels of four million tonnes per annum for decades.
