Phosphate plays a major role in crop production, and investors interested in this vital material should know about phosphate mining in the US and Canada.
China is the largest producer of phosphate in the world by far, but significant operations can also be found across the globe in North America.
The US and Canada are the continent’s major phosphate hotspots. In fact, the US put out 27.8 million metric tons of the material in 2016, making it the world’s third-biggest producer.
Canada didn’t produce a significant amount of phosphate last year, but it’s home to a number of interesting exploration projects. What’s more, Canadian companies like Potash Corporation of Saskatchewan (TSX:POT,NYSE:POT) contribute significantly to phosphate mining in the US. Read on to learn more about why phosphate mining in the US and Canada is compelling.
Phosphate mining in the US
Led by Minnesota-based Mosaic (NYSE:MOS), the world’s largest phosphate producer, the US has a strong history of phosphate refining and production. The company has various operations in Florida and Louisiana, and it produced 2.5 million tonnes of phosphate in 2016.
Canada’s PotashCorp is the next-largest phosphate producer in the US, with operations based in North Carolina and Florida. In 2016, the company produced a combined 6.65 million tonnes of phosphate rock from its Aurora and White Springs projects in North America. Its phosphate production dropped over the previous year as a result of decreased demand for feed and liquid products.
In addition to being the world’s third-largest phosphate producer, the US is also the fourth-largest phosphate consumer. Most of the country’s phosphate reserves are located in Florida, North Carolina, Idaho and Utah, and most phosphate mining in the US takes place there as well. Florida and North Carolina accounted for approximately 75 percent of total US phosphate output in 2016, with the remainder coming from Utah and Idaho. American projects are able to supply most domestic demand.
Phosphate mining in Canada
Canada is the world’s top producer of potash, but as mentioned it is not a significant producer of phosphate — in fact, the latest US Geological Survey report on phosphate indicates that in 2014 and 2015 no phosphate was produced in the country. It also has limited economic reserves.
That being said, a couple of companies are pursuing phosphate exploration in Canada. For example, Arianne Phosphate (TSXV:DAN) is focused on advancing its Lac a Paul phosphate project in Quebec. Lac a Paul was approved by the Quebec government in 2015, and is expected to produce 3 million tonnes of phosphate concentrate per year over its 26-year mine life.
Arianne recently established agreements with several partners, including Rio Tinto (ASX:RIO,LSE:RIO,NYSE:RIO), SNC-Lavalin (TSX:SNC) and Quebec’s Ministry of Energy and Natural Resources. The project is expected to cost $1.2 billion, and will create 2,200 construction jobs in addition to 1,000 direct and indirect jobs.
Australia-based Fertoz (ASX:FTZ) has projects in both Canada and the US, but has mainly been focused on its flagship Wapiti phosphate project in BC. Wapiti’s combined inferred and indicated resource now sits at 1.54 million tonnes at 21.6 percent P2O5; it was calculated to a depth of 30 meters along a strike length of 12.5 kilometers and uses a cut-off of 7 percent. The company secured $4.35 million in the latter half of last year through private placements to accelerate the mining and marketing of phosphate from Wapiti as it works on securing distributors.
This is an updated version of an article originally published by the Investing News Network in 2012.
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Securities Disclosure: I, Sivansh Padhy, hold no direct investment interest in any company mentioned in this article.