As the world’s population continues to grow, so too do the number of mouths needing to be fed. As a result, it is becoming increasingly important for farmers to grow more crops more efficiently.
That’s where potash fertilizers come into play — they not only increase the quality of food being grown, but also increase crop yields. Farmers use various fertilizers to grow crops, but the two most common are sulfate of potash (SOP) and muriate of potash (MOP).
For investors interested in the potash space, it’s important to know the difference between these two types of potash fertilizers. Read on for an explanation of their common uses, as well as a look at methods of producing them and which companies are doing so today.
Potash fertilizers: Muriate of potash
MOP, or potassium chloride, is the most commonly used potash fertilizer and can be used to farm a variety of foods, particularly chloride-loving vegetables like sugar beets, celery, Swiss chard and other plants that are resilient to chloride. Its chloride content can be beneficial for soils that are low in chloride, making them more disease resistant.
There are some drawbacks to MOP. For example, if high levels of chloride are present in the soil or irrigation water being used to grow crops, adding MOP can create toxicity. That means levels of the fertilizer have to be carefully managed, and MOP must only be used for select crops.
Still, MOP remains the most popular potash fertilizer, with over 55 million tonnes being sold and used annually. Forecasts suggest MOP shipments will reach at least 61 million tonnes in 2017. Having said that, the popularity of MOP in recent years has led to production that outpaces demand, resulting in lower-than-desired prices for the product.
Potash Corporation of Saskatchewan (TSX:POT, NYSE:POT) is a major producer of MOP, but because the fertilizer is so crucial in the world today, many smaller companies are exploring for the material.
For example, Highfield Resources (ASX:HFR) is a MOP exploration company that currently has five potash projects in Spain. It has been liaising with the country’s Ministry of Agriculture, Fishing, Food and Environment to discuss the environmental impact of its Muga potash project.
Saskatchewan-based Western Potash (TSX:WPX), which recently received environmental assessment approval for its Milestone project, is pursuing MOP as well. Gensource Potash (TSXV:GSP), which is also based in Saskatchewan and focused on MOP, has established a joint venture with an Indian conglomerate to develop the Vanguard One project — a small, scalable potash production facility in Central Saskatchewan.
Potash fertilizers: Sulfate of potash
SOP is considered a premium-quality potash. It contains two key nutrients for growing crops: potassium and sulfur. Using SOP not only improves quality and crop yields, but also makes plants more resilient to drought, frost, insects and even disease. SOP has also been known to improve the look and taste of foods and can improve a plant’s ability to absorb essential nutrients like phosphorous and iron.
Most often SOP is used on high-value crops like fruits, vegetables, nuts, tea, coffee and tobacco. The fertilizer works better on crops that are sensitive to chloride, which can sometimes have a toxic impact on fruit and vegetable plants.
Unlike MOP, SOP is not a naturally occurring mineral, and usually must be produced through chemical methods. Because of the resource-intensive production processes used to create it, SOP is priced higher than MOP.
The most common method used to produce SOP is called the Mannheim process. It involves pouring raw materials into a muffle furnace that is heated above 600 degrees Celsius, creating a reaction between potassium chloride and sulfuric acid. It accounts for roughly 50 to 60 percent of global SOP supply.
The next most common way to produce SOP, accounting for about 25 to 30 percent of supply, is by reacting potassium chloride with various sulfate salts to form what is called a double salt. “The most common raw material employed for this purpose is sodium sulfate. Sodium sulfate, either in the form of mirabilite (also known as Glauber’s Salt) or sulfate brine, is treated with brine saturated with MOP to produce glaserite. The glaserite is separated and treated with fresh MOP brine, decomposing into potassium sulfate and sodium chloride,” explains IC Potash (TSX:ICP) on its website.
Some companies are looking to develop their own methods of producing SOP, and IC Potash is one of them. Its process is called the Ochoa process, and it involves converting the mineral polyhalite into SOP through crushing and washing, calcination, leaching, crystallization and granulation.
Potash West (ASX:PWN) also has its own method of producing SOP. It is called the K-Max process, and the company developed it with its partner Strategic Metallurgy. Essentially, the process involves the extraction of SOP from glauconite.
There are also some operations that produce SOP using salt mixtures from natural brines. This requires brine with high sulfate levels, typically found in salt lakes. Australia-based Agrimin (ASX:AMN) is known for this type of production and holds 100% ownership of the largest mineral resources of brine hosted SOP in the world in its Mackay project. Some other examples of companies able to use naturally occurring brines are Compass Minerals International (NYSE:CMP), which operates out of Overland Park in Kansas, and Chile’s Sociedad Quimica y Minera (NYSE:SQM), which has operations in the Salar de Atacama.
All companies listed in this article had market caps of over $15 million as of July 13, 2017. If you think we missed a company that should be included, please let us know in the comments. And don’t forget to follow us @INN_Resource for real-time updates!
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.
Editorial Disclosure: Danakali and Gensource Potash are clients of the Investing News Network. This article is not paid-for content.