ASX-Listed Potash Stocks

- September 21st, 2020

Australian companies are exploring and developing potash projects around the world. Find out more about ASX-listed potash stocks here.

It’s been a slow few years for potash due to low prices, oversupply and farmers pinching pennies. The COVID-19 pandemic is applying further pressure, but major players, including ASX-listed potash stocks, remain confident in the long-term outlook for the potash market.

Demand for agricultural crops will continue to rise alongside global population growth, in turn spurring demand for potash fertilizers, which increase crop yields and food quality.

There are quite a few ASX-listed companies exploring, developing and producing potash both in Australia and in other parts of the world. To help those interested in the space learn which ASX-listed potash stocks are out there, we’ve put together a brief list.

All companies included had market caps of over AU$25 million as of August 11, 2020, and are listed in alphabetical order. Read on to learn more about these potash-focused companies — and if we missed an ASX-listed potash stock with a market cap above AU$25 million, please let us know in the comments.

ASX-listed potash stocks

Agrimin (ASX:AMN)

Market cap: AU$119.83 million

Agrimin owns the large-scale Mackay sulfate of potash (SOP) project, which is located on a Western Australian salt lake and covers 2,560 square kilometers. According to the company, Mackay holds the largest-known brine-hosted SOP resource in the world.

A definitive feasibility study (DFS) for the project released in mid-2020 shows a post-tax net present value (NPV) of US$655 million at an 8 percent discount, and an internal rate of return of 21 percent. With the DFS in hand, Agrimin believes Mackay can be the world’s lowest-cost producer of SOP. Mackay has a maiden ore reserve of 20 million tonnes (Mt) of SOP.

Australian Potash (ASX:APC)

Market cap: AU$36.98 million

The Lake Wells potash project in Western Australia is Australian Potash’s main asset, though the company also holds a number of gold and base metals projects. At Lake Wells, the company is exploring for SOP, and is targeting domestic demand from Australian farmers.

In August 2019, Australian Potash completed a DFS for Lake Wells, identifying a mine life of 30 years that could potentially extend to over 50 years. Strong project economics include a NPV of AU$665 million at an 8 percent discount. The project has a JORC-compliant measured mineral resource of 18.1 Mt of SOP.

In March 2020, Australian Potash secured a 10 year offtake agreement for potash products from Lake Wells. In June of that year, the potash company announced that the environmental review document for Lake Wells was accepted for final assessment by the Environmental Protection Authority (EPA).

BHP (ASX:BHP)

Market cap: AU$203.33 billion

BHP is a well-known global mining giant. It is an Australian-American company with assets in oil and gas, and an array of minerals, including potash. Since 2010, BHP has been investing in the Jansen potash project in Saskatchewan, and has been slowly developing the site.

In February 2020, BHP said it would ask its board for Stage 1 project approval in 2021. To date, more than US$2.7 billion has been spent on Jansen, which is estimated to be 84 percent complete. The capital cost to get Jansen into production is estimated to be between US$5.3 billion and US$5.7 billion.

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Danakali (ASX:DNK)

Market cap: AU$149.81 million

Danakali’s focus is on developing the Colluli potash project in Eritrea, which is wholly owned by Colluli Mining Share Company (CMSC). CMSC is a 50/50 joint venture between Danakali and Eritrean National Mining Company. With a JORC-compliant resource estimate of 1.289 billion tonnes at 11 percent K2O for contained SOP of 260 Mt, and a JORC-compliant ore reserve estimate of 1,100 Mt at 10.5 percent K2O for 203 Mt of contained SOP equivalent, the company believes Colluli is a world-class project.

The Colluli project is heading into the construction phase as Danakali seeks to secure financing, and the company expects the project to reach commercial production in late 2022.

Galaxy Resources (ASX:GXY)

Market cap: AU$5059.71 million

Known mainly for its lithium production, mining and chemicals, Galaxy Resources operates the Sal de Vida project in Argentina. Sal de Vida is estimated to hold combined proven and probable reserves of 1.1 Mt of retrievable lithium carbonate equivalent and 4.2 Mt of potash.

This reserve estimate translates to a mine life of 40 years for 25,000 tonnes per year of battery-grade lithium carbonate and 95,000 tonnes per year of potash on average.

In mid-2020, the ASX-listed company said that engineering and design work was progressing, with production at Sal de Vida slated for 2022.

Highfield Resources (ASX:HFR)

Market cap: AU$176.3 million

Highfield Resources has five projects that cover 550 square kilometers in Northern Spain’s Ebro potash-producing basin. The ASX-listed potash stock completed a definitive feasibility study for its Muga project in 2015, received an environmental permit in mid-2019 and now expects to receive a mining concession by the end of 2020. Already in 2020, the company has succeeded in securing an offtake agreement with Swiss-based agri-trader Keytrade.

Highfield Resources’ expansion drill campaign at Muga in the first half of 2020 has confirmed the continuity of the Vipasxa ore deposit, which remains open to the west. The company has also been completing exploration work at its Pintanos and Sierra del Perdon potash projects.

Kalium Lakes

Market cap: AU$116.33 million

Kalium Lakes holds the Beyondie SOP project located in Western Australia, where the company is aiming to produce SOP for foreign and domestic sale. By Q3 2021, Kalium Lakes hopes to bring the project into production. In August 2020, the company announced that the Beyondie project is more than halfway complete and said construction had commenced on an SOP purification plant.

Beyondie holds SOP ore reserves of 1.65 Mt proven and 3.49 Mt probable, as well as SOP drainable mineral resources of 1.98 Mt measured, 9.6 Mt indicated and 13.79 Mt inferred. Kalium Lakes has secured a binding offtake agreement with the world’s largest supplier of potash fertilizer, K+S. Beyondie is expected to be a low-cost, high-margin producer with a mine life of more than 30 years.

Reward Minerals (ASX:RWD)

Market cap: AU$28.45 million

Reward Minerals’ flagship project is the advanced-stage Lake Disappointment SOP project in Western Australia. The company claims it is Australia’s largest high-grade brine SOP deposit.

Lake Disappointment is projected to produce 400,000 tonnes of SOP per year for sale to Australian farmers and international markets over a 27 year mine life. The project is expected to require CAPEX of AU$451 million, and should go on to generate life-of-mine revenues of AU$6 billion. In June 2020, the company announced that Lake Disappointment had received a green light from EPA regulators.

Salt Lake Potash (ASX:SO4)

Market cap: AU$185.48 million

Salt Lake Potash is another mineral exploration company focused on potash assets in Australia. Located in Western Australia’s Northern Goldfields region, the company’s Goldfields Salt Lakes SOP project includes nine salt lakes that cover over 4,750 square kilometers.

The project has a high-grade SOP probable ore reserve of 5.4 Mt of SOP, plus a drainable SOP mineral resource estimate of 11.4 Mt, giving it a projected 20 year mine life. The company announced in July 2020 that the project is on track for first production in Q1 2021.

This is an updated version of an article first published by the Investing News Network in September 2015.

Don’t forget to follow us @INN_Resource for real-time news updates!

Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.

What do market experts forecast for the 2020 potash and phosphate market?

 

 

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