Phosphate-mining production is expected to grow by 2 percent through 2020. Find out which countries produced the most phosphate last year.
Phosphate and potash are primarily used to produce fertilizers for crops and animal feed supplements. Only about 5 percent of world production is used in other applications, such as construction, soaps and detergents.
According to the US Geological Survey’s most recent report on phosphate rock, global phosphate demand is estimated to have grown in 2017, while power outages and flooding caused by Hurricane Irma adversely affected phosphate rock and fertilizer production in Florida in September.
US phosphate-mining capacity is projected to remain the same in the years to come, while global output is seen growing by about 14 percent. Most growth will be focused in North Africa and the Middle East. That’s because new mines in Florida and Idaho will simply be replacements for existing ones.
For now, investors interested in the phosphate-mining space will want to keep an eye on current phosphate production. Below are the top phosphate-producing countries of 2017.
Mine production: 140 million MT
China’s phosphate-mining production increased in 2017 to reach 140 million MT, and has been well ahead of all other countries for years. However, China’s phosphate production in 2017 may have been overstated. According to industry analysts, the country produced just 85 million MT in 2017 instead of the 140 million MT reported by the government.
For its 2017 estimate, the US Geological Survey used information from government sources in China. The country has 3.1 billion MT of phosphate in reserve, making its reserves the second largest in the world. According to Michael Rahm, vice president of Mosaic (NYSE:MOS), China may be facing a drop in output in the coming years due to environmental compliance costs, higher production costs and shutdowns due to pollution concerns.
2. United States
Mine production: 27.7 million MT
In 2017, US phosphate-mining output increased slightly, rising to 27.7 million MT from 27.1 million MT the previous year. The top phosphate-producing states of Florida and North Carolina accounted for over 75 percent of domestic output. The other 25 percent of US output came from Idaho and Utah.
The majority of the phosphate rock mined in the US is used for manufacturing phosphoric acid and superphosphoric acid. These types of wet-process phosphate products are used for things like animal feed supplements. About half of this type of phosphate is exported in the form of merchant-grade phosphoric acid, granular diammonium and monoammonium phosphate fertilizer, as per the US Geological Survey. As previously mentioned, Hurricane Irma wreaked havoc on Florida, yet phosphate-mining production numbers still increased year-on-year.
3. Morocco and Western Sahara
Mine production: 27 million MT
Morocco and Western Sahara have 50 billion MT of phosphate in reserve, an amount that represents over 70 percent of global supply. Together they produced 27 million MT of phosphate last year.
Western Sahara is disputed territory between Morocco and the Polisario political movement, but last year a European court ruled that Western Sahara should not be considered part of Morocco in European Union and Moroccan deals. Morocco’s Office Cherifien de Phosphate mines phosphate in the Moroccan-held part of Western Sahara, and that has led to disruptions in phosphate shipments in the past.
Mine production: 12.5 Mt
Russia’s phosphate output jumped back to its 2015 numbers, coming in at 12.5 million MT in 2017. The country has 700 million MT of phosphate in reserve.
Health concerns over cadmium, a carcinogen, could be creating further opportunities for the phosphate-mining country. Proposed European Union fertilizer requirements limit the amount of cadmium residue permitted in phosphate imports. Polish MEP Tomasz Wlostowski said, “[t]he limits will only benefit Russian producers, which have monopolized low-cadmium apatite phosphate deposits and which already dominate the EU fertilizer market.”
Mine production: 8.2 million MT
Jordan’s phosphate-mining output jumped from 7.9 million MT in 2016 to 8.2 million MT in 2017. Its phosphate reserves stand at an estimated 1.3 billion MT.
The country’s sole state-owned phosphate producer, Jordan Phosphate Mines Company (JPMC), signed six new agreements with Indian firms in February 2018. The agreements and memorandums of understanding will allow JPMC to export 3 million MT of phosphate to India this year, as well as for the next three years. JPMC also signed a memorandum of understanding with the government of Bangladesh in February 2017 to export 270,000 MT of phosphate and phosphoric acid over three years.
Another Jordan-focused producer, Arab Potash Company, announced that it achieved record output in the first half of the year, amounting to 1.2 million metric tonnes. The firm is a privately owned company in which China’s SDIC holds a stake.
Mine production: 5.5 million MT
Last year, Brazil produced 5.5 million MT of phosphate, an increase from the 5.2 million MT it produced in 2016. Brazil has a booming agricultural sector and is the fifth-largest fertilizer consumer; demand in the country is expected to grow twice as fast as the rest of the world from now until 2025. Vale (NYSE:VALE) is the country’s largest producer of phosphate and nitrogen.
Mine production: 5 million MT
Egypt’s phosphate-mining production remained unchanged in 2017 from the previous year. In 2016 it was reported that the country will gain a new phosphate plant, although no news has been released on it since. According to the US Geological Survey, Egypt’s phosphate reserves now sit at 1.3 billion MT. More of those reserves may get dug up in the next few years as the country builds a new phosphate industrial zone in Aswan. It will also expand the Safaga Port.
8. Saudi Arabia
Mine production: 4.5 million MT
Saudi Arabia produced 4.5 million MT of phosphate last year, an increase in production from 4.2 million MT in 2016. The country is sitting on 1.4 million MT of phosphate reserves.
A Saudi Arabian Mining company chief executive told Reuters that the company expects to ramp up production in 2018 at its Waad al-Shamal facility, with a plan to reach full capacity by 2019. The company has been working with Fluor (NYSE:FLR) on the Waad al-Shamal facility, with Fluor providing project management consulting to further develop the project. Production of merchant-grade acid and fertilizer commenced as of August 2017. The project is expected to be one of the world’s largest phosphate-mining facilities on the globe.
Mine production: 4 million MT
Israel saw a slight rise in phosphate-mining production last year. Israel Chemicals (ICL) (NYSE:ICL) is a major firm involved in fertilizer production in the country.
In 2018, ICL said it intends to invest “tens of millions of dollars in the coming years in entrepreneurial initiatives, innovation and development of agricultural technologies.” The firm believes this strategy will improve its competitiveness in the minerals space. It comes at a time when the company has announced a new change in leadership — CEO Asher Grinbaum announced his wish to step down in February 2018, and the board appointed Raviv Zoller as the new CEO.
In its Q3 2018 report, ICL reported that production had fallen short by 30,000 tonnes because production at the ICL Boulby mine was terminated at the end of Q2 in order to transition to polysulfate production.
Mine production: 3.9 million MT
Peru’s 2017 phosphate-mining production remained nearly unchanged from the previous year, increasing by only 50,000 MT.
The country does not hold much phosphate in reserve, and most is located at the Mantaro phosphate deposit. Itafos (TSXV:IFOS) holds the Mantaro mine, located in that region. According to the company, the mine has a measured and indicated resource of 39.523 million tonnes grading 10 percent P2O5.
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Securities Disclosure: I, Amanda Kay, hold no direct investment interest in any company mentioned in this article.