Demand for both phosphate and potash fertilizers is expected to continue growing as the world’s population increases and the amount of arable land decreases.
Indeed, the US Geological Survey predicts that world consumption of P2O5 (phosphorus pentoxide) fertilizers will increase from 44.5 million tons (Mt) in 2016 to 48.9 Mt in 2020. Asia and South America are expected to to lead the increase in demand.
Thankfully, phosphate rock production around the globe is expected to increase 2 percent per year through to 2020, with the largest areas of growth being Africa and the Middle East. The expansion of phosphate rock mines and facilities in Morocco alone should double the world’s phosphate rock production by 2020. Project developments in Algeria, Brazil, Egypt, Jordan, Kazakhstan, Peru, Russia and Senegal are all expected to contribute to increased phosphate rock production as well.
With those numbers in mind, the Investing News Network decided to take a look at phosphate mining companies that are already producing the material or are developing phosphate projects. Companies included are listed on the TSXV, TSX, ASX or NYSE, and all had market caps of over $10 million at the time of publication. Please let us know in the comments if we missed any stocks that meet those criteria.
Aguia Resources (ASX:AGR)
Market cap: AU$46.88 million
Aguia Resources continues is advancing its Tres Estradas phosphate project in Brazil. The company recently completed a 14,000-meter infill drilling program, and is currently revising its mining plan as part of a bankable feasibility study. The study is currently over 50 percent complete.
Market cap: C$18.49 billion
Agrium is a major global producer of agricultural products, including phosphate, nitrogen and potash. The company is set to merge with fellow agriculture giant Potash Corporation of Saskatchewan (TSX:POT,NYSE:POT), and recently gained unconditional regulatory clearance from Canadian competition regulators. The transaction is expected to close by the end of Q4 2017.
Arianne Phosphate (TSXV:DAN)
Market cap: C$74.39 million
Arianne Phosphate is moving forward at its Lac a Paul phosphate project in Quebec, and has received support from the province through the Plan Nord program. The company is still in the development stage, and has been focusing on establishing partnerships with supply chain partners, project management consultants and logistics.
A recent press release from Arianne states that it will be advancing the project this year by reducing cash operating production costs, securing construction financing and signing an impact and benefit agreement with First Nations groups. The $1.2-billion project is expected to create 2,200 construction jobs and 1,000 direct and indirect jobs in the province.
Market cap: AU$36.7 million
Avenira, formerly known as Minemakers, owns the Wonarah phosphate project. The site is considered the largest phosphate deposit in Australia, with a measured resource of 78 Mt at 20.8 percent phosphate and an indicated resource of 222 Mt at 17.5 percent phosphate with a cut-off grade of 10 percent.
The company also owns Baobab Mining and Chemical, and along with it the Baobab rock phosphate project in Senegal. Avenira recently submitted an application to convert its small mine permit to a full exploration permit; if approved, it will allow the company to expand production levels.
GrowMax Resources (TSXV:GRO)
Market cap: C$22.09 million
GrowMax Resources is a Canadian exploration company whose main asset is its Bayovar property in Peru. According to the company’s most recent quarterly report, it has been focusing on building community relations, optimizing the project and finding growth opportunities.
The company also said in the report that although the market is difficult for publicly traded fertilizer juniors, GrowMax’s large cash balance of C$42.7 million has allowed it to grow sustainably and differentiate itself from others in the space.
Market cap: C$135.31 million
Itafos is an international phosphate fertilizer producer with several projects in Brazil, as well as the US and Guinea-Bissau. None of the company’s six projects are currently in production, but its Arraias project in Brazil is expected to begin commercial operations in the fourth quarter of 2017. The mine is expected to produce 510 Kt of phosphate annually.
Market cap: US$7.66 billion
Mosaic is one of the world’s largest producers and marketers of concentrated phosphate and potash crop nutrients, and has various phosphate operations in Florida and Louisiana. For Q2 2017, the company reported a sales volume of 2.6 Mt of phosphate and $975 million in net sales.
The company has a positive outlook for its phosphate division. According to Mosaic CEO Joc O’Rourke, “[w]e are seeing positive developments in the phosphates industry following a challenging 2016, Chinese exports in the first half of 2017 have been higher than we originally estimated, but we continue to expect China to export fewer tonnes of phosphates this year compared to last year. China phosphate industry restructuring remains key to our near term outlook.”
Verdant Minerals (ASX:VRM)
Market cap: AU$27.95 million
Verdant Minerals holds several phosphate and potash projects, including the Ammaroo phosphate project in Australia’s Northern Territory. The site is expected to produce 2 Mt of phosphate rock per year. Verdant is currently conducting a bankable feasibility study and acquiring environmental approvals to move the project forward.
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This is an updated version of an article originally published by the Investing News Network in 2015.
Securities Disclosure: I, Sivansh Padhy, hold no direct investment interest in any company mentioned in this article.