Potash production is on the rise, with potash companies on pace to produce 61 million MT by 2019. Canada leads the top potash-producing countries.
Potash fared a bit better in 2017 than it did the year before. Prices got a boost, increasing around 20 percent. That said, the industry is still vulnerable to oversupply, which the World Bank says has been worsened by declining demand.
Nonetheless, 2017 had some wins for potash producers. Chinese demand bounced back, and the country’s agreement with potash giant Uralkali (OTCMKTS:URAYY) established a much higher benchmark price for the year. Major producers also cut output, allowing prices to improve.
While many potash operations have closed in recent years, some are waiting on the sidelines for better days. These include projects such as BHP Billiton’s (ASX:BHP,NYSE:BHP,LSE:BLT) Jansen asset in Canada, which is on hold until it is able to pass “strict investment hurdles.”
Though potash supply is on the decline, in part owing to the closure of an underground mine in New Mexico, the US Geological Survey claims that between 2018 and 2021, new mines are set to “start production in Belarus, China, Russia, and Spain.” These new projects could add an additional 15 million MT of ouptut by 2021.
The organization estimates that consumption will increase to 45.6 million MT by 2021, and suggests that Asia and South America will be the largest potash consumers.
With that in mind, it’s worth looking at the top countries for potash production in 2017. Here’s an overview of the 10 countries that produced the most of the fertilizer, as per US Geological Survey data.
Mine production: 12 million MT
First on the list for top potash production is Canada. The country’s potash production jumped from 10 million MT in 2016 to 12 million MT in 2017.
Canada is home to Nutrien, the largest potash company by capacity. The company is newly formed, having been created via the merger of Potash Corporation of Saskatchewan and Agrium. The two companies came together in January 2018 to “create a global agricultural giant” valued at $36 billion.
Mine production: 7.2 million MT
Potash production in Russia also hopped back in 2017. It put out 7.2 million MT of potash compared to 6.48 million MT in 2016. Uralkali is a major potash producer in Russia. The company has five mines and seven ore treatment mills. It exported 10.9 million tonnes of potash in 2017, a figure that represents growth of 16 percent year-over-year.
Mine production: 6.4 million MT
In Belarus, 2017 potash production was slightly below the amount put out in 2016. Potash production came in at 6.4 million MT last year compared to 6.18 million MT the year prior.
Belarusian Potash Company was once the most powerful potash firm in the industry, with some calling it a cartel. Since Uralkali pulled out of Belarusian in 2013, its former partner, state-owned Belaruskali, has had a rocky road to recovery. Belaruskali has six mines and four processing factories. Its reserves are estimated to be 247.5 million tons. Despite a recent accident at one of its mines involving a rock slide and two missing workers, Belaruskali’s production has not been affected.
Mine production: 6.2 million MT
Looking over to China, potash production remained the same from 2016 to 2017, at 6.2 million MT. Potash is extremely vital in China — the country is the largest consumer of the fertilizer, accounting for approximately 20 percent of world consumption.
Mine production: 2.9 million MT
In Germany, potash production stayed nearly the same from 2016 to 2017, going from 2.8 million MT to 2.9 million MT.
K+S (ETR:SDF) has a number of projects, operating six mines in three districts of Germany. The company began production at its new Bethune mine in Saskatchewan in 2017. K+S states that it is ramping up to have an annual capacity of 2.86 million tonnes of potash from the Bethune facility alone.
Mine production: 2.2 million MT
Potash production in Israel ramped up a bit in 2017. The country produced 2.2 million MT compared to 2.05 million MT the year before. The country is sixth in terms of potash production, and it also hosts the world’s sixth-largest potash-producing company: Israel Chemicals (TLV:ICL). The company has about 6 million MT of annual capacity, and produces roughly a third of the world’s bromine.
Mine production: 1.3 million MT
While potash production in Jordan increased a bit from 2016 to 2017, the country fell short of Israel last year and got bumped down to seventh place. Arab Potash Company, located in Jordan, is the eighth-largest producer of potash by volume, and is the sole producer of potash in the Arab region. It has helped make Jordan a key potash supplier for India and Asia.
Mine production: 1.2 million MT
Chile recorded production of 1.2 million MT of potash in 2017, the same as the year before. One of the largest producers of potash in the country is Sociedad Quimica y Minera (NYSE:SQM), which is also a leading producer of lithium. South America in general is a large consumer of potash.
Mine production: 680,000 MT
Spain remained in ninth place for potash production in 2017. Last year, the country produced 680,000 MT of potash, up from 670,000 MT the year prior. Spain has reserves of 44 million MT of potash. Geoalcali has a few potash projects in Spain, including: Izaga, Muga and Sierra Del Perdon.
10. United States
Mine production: 480,000 MT
The US bumped the UK from the 10th spot on the list in 2017. According to the US Geological Survey, total potash production for the US was worth $400 million in 2017, which represents a 25-percent decrease from the previous year. Production came mostly from Southeastern New Mexico and Utah.
The country put out 480,000 MT of potash for the year, a relatively steep drop from 2014, when it put out 850,000 MT of the mineral. The center of US potash production is New Mexico, where four mines are operated by two companies; Utah also has three potash operations. US potash goes largely to the fertilizer industry, with leftover output finding its way to the chemical and industrial sectors.
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Securities Disclosure: I, Amanda Kay, hold no direct investment interest in any company mentioned in this article.