Global Potassium Reserves and Potassium Fertilizer Use
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Global Potassium Reserves and Potassium Fertilizer Use Terry L. Roberts, President, IPNI Symposium – Global Nutrient Cycling Monday, October 6, 2008 2008 Joint Annual Meeting Potassium (K) and Potash • K present in most rocks and soils • Economic sources … – sedimentary salt beds remaining from ancient inland seas (evaporite deposits) – salt lakes and natural brines • Potash refers to a variety of K‐bearing minerals Common K Minerals Mineral Composition K2O, % Sylvite KCl 63.1 Sylvinite KCl/NaCl mixture ~ 28.0 Carnallite KClxMgCl2x6H2O 17.0 Kainite 4KClx4MgSO4x11H2O 19.3 Langbeinite K2SO4x2MgSO4 22.7 Polyhalite K2SO4x2MgSO4x2CaSO4xH2O 15.6 Niter KNO3 46.5 Common K Minerals • Sylvite (KCl) … abundant in commercial deposits KCl • Sylvinite (KCl + NaCl) also common • Hartsalz … ore deposits with SO4 salts (kieserite [MgSO4] or anhydrite [CaSO4]) are limited … Europe • Langbeinite occurs New Mexico and Ukraine World Potash Reserves • About 100 large buried deposits + 100 brine deposits of commercial potential • The world has an estimated 250 billion metric tons of K2O resources Source: U.S. Geological Survey Potash Resources and Reserves • Resources include proven, probable, and inferred reserves – Reserves: deposits of sufficient quantity and quality that are currently mined – Reserve base: reserves + deposits that are marginally economic or sub economic • U.S. Geological Survey estimates global reserves at 18 billion t K2O … 8.3 billon t considered commercially exploitable. Source: U.S. Geological Survey, Mineral Commodity Summaries and Potash, January 2008 Potash Reserves and Reserve Base Reserves, Reserve Base, ‘000 t K2O ‘000 t K2O Source: U.S. Geological Survey, Mineral Commodity Summaries and Potash, January 2008 Potash Deposits – North America • World’s largest reserves occur in Saskatchewan • Ore is exceptionally high grade (25‐30% K2O) at depths of 950‐1,100 m increasing to > 3,500 m • Uniform thickness (2.4‐3 m) and mineralization and no Potash Reserves In structural deformations Saskatchewan • Sylvinite, some carnallite, and clay Source: PPIC 1989 Potash Deposits – FSU • FSU has extensive proven reserves of K minerals … second only to the deposits in Saskatchewan • Russia – Verkhnekamsk deposit in the Urals near Solikamsk – Potash depth at 75 to 450 m in 13 potentially minable beds ranging in thickness from 26 to 30 m (sylvinite) and 70 to 80 m (zone of sylvinite‐ carnallite). – Mined beds 1.2 to 6 m thick with 15% K2O with 3 to 5% insolubles • Belarus – Starobinsk deposit is 2nd largest in ore body in FSU near Soligorsk – 30 potash beds in 4 horizons. Most mining 350 to 620 m depth in second horizon (1.8 to 4.4 m thick) – Sylvinite ore averaging 11% K2O and 5% insolubles Source: Searls 2002, U.S. Geological Survey, Mineral s Yearbook; Stone, 2002, Canadian Minerals Yearbook Potash Deposits – Western Europe • Oldest deposits are the Hessen and Thüringen beds in southern Germany – contain 15 to 20% sylvite, kieserite, and carnallite (~10% K2O) – Beds are relatively flat‐lying, but also folding, with some barren zones, sudden thickness changes, etc. making mining difficult • Also carnallite and kieserite deposits in central Germany and sylvite and carnallite in northern Germany • Sylvite deposits in England and sylvinite in Spain Source: Searls 2002, U.S. Geological Survey, Mineral s Yearbook; Stone, 2002, Canadian Minerals Yearbook Potash Deposits • Middle East: K extracted from Dead Sea – contains an estimated 1 billion t KCl • Latin America – sylvinite and carnallite in the Sergipe basin in Brazil – KNO3 in Chile in Atacama Desert (est. 1 billion t NaNO3 and 100 million t KNO3) and Salar de Atacama, a high‐attitude dry lake (brine est. at 120 million t KCl and 80 million t K2SO4 • Asia : Carnallite and K‐bearing brines in Qinghai and Xinjiang Provinces • Undeveloped Deposits – Thailand, Argentina, Amazon Basin in Brazil, Morocco, Poland, and additional deposits in the FSU Source: U.S. Geological Survey, Mineral Commodity Summaries and Potash, January 2008 Production of KCl and K2SO4, Mt Source: IFA Statistics World Mine Production, 2007 ‘000 t K2O Source: IFA Statistics Canada: potash export by destination in 2007, ‘000 t K2O From Canada 66 4,501 3,340 580 1,900 214 Source: IFA Production and Trade Statistics Russia: potash export by destination in 2007, ‘000 t K2O From Russia/Belarus 1,896 344 78 4,339 1,059 1,961 116 Source: IFA Production and Trade Statistics Germany: potash export by destination in 2007, ‘000 t K2O From Germany 1,515 92 40 430 126 670 109 52 Source: IFA Production and Trade Statistics Israel/Jordan: potash export by destination in 2007, ‘000 t K2O From Israel/Jordan 353 3 67 1,132 856 137 496 14 Source: IFA Production and Trade Statistics World Potash Production and Consumption, Mt K2O Source: IFA Statistics Regional potash consumption, ‘000 t K2O 10,000 9,000 8,000 Western and Central Europe 7,000 Eastern and Central Asia 6,000 North America 5,000 Latin America and the Caribbean 4,000 Africa 3,000 West Asia South Asia 2,000 East Asia 1,000 Oceania 0 Source: IFA Production and Trade Statistics Potash consumption, ‘000 t K2O • 4 countries accounted for two‐thirds of potash imports – US 18%, Brazil 16%, China 21%, and India 9% Source: IFA Production and Trade Statistics Global Fertilizer Consumption Forecasts to 2012/13 (Mt nutrients) NP2O5 K2OTotal Ave. 2005/06 95.5 38.6 27.6 162.1 to 2007/08 (e) 2012/13 (f) 115.6 45.7 33.0 194.3 Ave. Annual +3.2% +2.8% +3.0% +3.1% Change Source: P. Heffer, 2008. Medium‐Term Outlook for World Agriculture and Fertilizer Demand 2007/08 – 20012/13. IFA Annual Conference, Vienna, Austria Forecast Potash Demand Through 2012/13 % Average Annual Increase 2005/06–07/08 vs. 2012/13 6 5 4 3 2 1 0 % Ave. increase in potash use increase Ave. % Source: P. Heffer, 2008. Medium‐Term Outlook for World Agriculture and Fertilizer Demand 2007/08 – 20012/13. IFA Annual Conference, Vienna, Austria World potash supply/demand balance 45,000 42,000 39,000 36,000 33,000 O 2 30,000 27,000 ‘000 t K 24,000 21,000 18,000 15,000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Supply of potash Source: Prud’homme 2008. Global Fertilizers and Raw Materials Supply and Supply/Demand Balances 2008‐2012.IFA Production and Trade World potash supply/demand balance 45,000 42,000 39,000 O 2 36,000 33,000 ‘000 t K 30,000 27,000 24,000 21,000 18,000 15,000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Supply of potash Available for fertilizer Source: Prud’homme 2008. Global Fertilizers and Raw Materials Supply and Supply/Demand Balances 2008‐2012.IFA Production and Trade World potash supply/demand balance 45,000 42,000 39,000 36,000 33,000 O 2 30,000 27,000 ‘000 t K 24,000 21,000 18,000 15,000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Supply of potash Available for fertilizer Fertilizer Demand Source: Prud’homme 2008. Global Fertilizers and Raw Materials Supply and Supply/Demand Balances 2008‐2012.IFA Production and Trade World potash supply/demand balance • Supply/demand balance is considered very tight and is expected to be so for the next few years … triggered an increase in world potash prices Potash prices, 600 January 2006 – September 2008 500 400 300 200 $/t f.o.b. Vancouver 100 J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A 2006 2007 2008 New Potash Capacity 2008 to 2012 Year Mt K2O Country 2008 0.0 2009 0.84 Jordan, Russia, Israel, Canada, USA 2010 1.02 Canada, Russia, Israel 2011 1.14 Canada, Russia, Israel 2012 4.74 Canada, Argentina, Belarus, Jordan Total 7.74 Source: Prud’homme 2008. Global Fertilizers and Raw Materials Supply and Supply/Demand Balances 2008‐2012.IFA Production and Trade Tight supply/demand balance … new interest in potash mining • Saskatchewan is the world’s largest producer with 37% of supply and > 50% of global potash reserves – No potash exploration permits issued 15 years prior to 2004 … next 3 years the area under lease increased from 250,000 to 3 million hectares – New companies … BHP Bilton, Potash One Inc., Potash North Resource Corp., Athabasca Potash, Ivany Potash, Sidon International Resources, Grizzly Diamonds Ltd., Alix Resources Corp., Geo Minerals Ltd., and JSC Acron • Estimated capital cost for a conventional mine … $2.8 billion, excluding infrastructure outside the plant gate and with no production for 5‐7 years. Why the increased demand for fertilizer? • Increased food demand and less land to produce it 0.60 Population, billions Arable land per capita, ha 10 0.50 8 0.40 6 0.30 4 0.20 2 0.10 0 0.00 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 1961 1965 1969 1973 1977 1981 1985 1989 1993 1997 2001 2005 Source: FAO Why the increased demand for fertilizer? 90 Meat consumption, kg/capita/yr • Diets are changing … 80 70 more protein 60 50 • Requires more feed 40 30 grains to produce 20 10 protein 0 1995 1997 1999 2001 2003 – 7 kg/kg beef, Developed World Developing World – 4 kg/kg pork, and Source: FAO – 2 kg/kg poultry Why the increased demand for fertilizer? • Biofuels … continued expected growth … leads to increasing demand for corn and other crops 35,000 6,000 Ethanol Biodiesel 30,000 5,000 25,000 India 4,000 Indonesia 20,000 EU EU China 3,000 15,000 Brazil Canada Argentina Million gallons 2,000 10,000 Brazil Million gallons USA USA 5,000 1,000 0 0 2007 2009 2011 2013 2015 2017 2007 2009 2011 2013 2015 2017 Source: FAPRI 2008 Why the increased demand for fertilizer? World wheat plus coarse grains ending stocks 40 35 30 25 20 consumption 15 1998‐2007 of 10 % y = ‐1.89x + 3816 5 R² = 0.93 0 1975 1980 1985 1990 1995 2000 2005 2010 Year (2007 =2007/08) Source: USDA‐FAS, 12/2007 Low crop yields in the developing world (Ave.