Potash and Other Fertilizers
The term “potash” is a common name for the group of potassium (“K”) bearing minerals and compounds. Potash is mined from salt beds and contains a water-soluble form of potassium, which is essential in improving water retention, colour, texture, taste, and the nutritional value of food crops. Potash contains Potassium, one of the three primary nutrients required for plant growth. The other two are: Nitrogen (“N”) and Phosphate (“P”). These elements are often combined and distributed as NPK formula fertilizer (fertilizer containing nitrogen, phosphate and potassium). Any natural or manufactured material that contains at least 5% of one or more of the three primary nutrients can be considered a fertilizer. Industrially manufactured fertilizers are sometimes referred to as "mineral" fertilizers.
The three primary nutrients of Nitrogen, Phosphate, and Potassium are included in the five macronutrients. The other two macronutrients are Magnesium (“Mg”) and Sulphate (“S”). Sulphate of Potash (“SOP”), which IC Potash intends to produce, contains both Potassium and Sulphate. Sulphate of Potash Magnesia (“SOPM”) or langbeinite, which the Company also intends to produce, contains Potassium, Sulphate, and Magnesium.
Commercial fertilizers containing Nitrogen, Phosphate, or Potassium can improve plant yield by 40-60%. There are also a number of other micronutrients, which are beneficial to plant growth including, calcium, boron, copper, iron, manganese, molybdenum, cobalt, and zinc. There are several sources which can provide nutrients to plants; the two most important are organic manure and mineral fertilizers. When manure and crop residues are used, mineral fertilizers supply the outstanding nutrient balance needed for good crop yields. In most parts of the world, the balance to be supplied by mineral fertilizers is substantial.
Fertilizer production entails gathering raw materials from nature, treating them in order to purify them or increase their concentration, converting them into plant-available forms, and often combining them into products that contain more than one nutrient.
How are fertilizers manufactured?
Nitrogen Production:
78% of the earth's atmosphere is nitrogen. However, the nitrogen we breathe is in a chemically inert form that plants (except legumes) cannot use. Large amounts of energy are required to convert this nitrogen to a form that can be used by plants. The most important nitrogen-based fertilizers are urea and ammonium nitrate. The production of ammonia from atmospheric nitrogen was made possible in the first part of the 20th century by the development of the Haber-Bosch process. In this process, hydrogen is obtained from natural gas by a catalytic process. In some countries, though far less commonly, coal is used as the source of hydrogen through a process called coal gasification. The final stage involves the production of ammonia using an iron catalyst promoted with potassium oxide, calcium oxide, and aluminum oxide. This is done at a pressure of 200 atmospheres and at temperatures between 300 degrees Centigrade and 550 degrees Centigrade.
Phosphate Production:
Phosphorus, in the form of phosphate, is mined from naturally occurring mineral deposits of phosphate rock formed sediments of ancient seas. The phosphate rock is the raw material used in the manufacture of most commercial phosphate fertilizers. However, due to low availability of phosphorus, high transport costs, and low crop responses, very little rock phosphate is currently used in agriculture. Phosphate rock processing consists of the separation of phosphate from the mix of sand, clay and phosphate that makes up the matrix layer.
Potash
The potassium used in fertilizers is found in a salt form called potash. Potash deposits are derived from evaporated sea water. They occur in beds of sediment at only a few places in the world. Canada, Germany and Russia contain large deposits of potash otherwise known as sylvite or Muriate of Potash (“MOP”). Typically, the ore is extracted from potash deposits by electrically operated mining machines and conveyed to the surface, where it is crushed. Using a flotation process, salt and clay particles are removed, the brine solution is dried, and the potash is sized by screening. The resultant coarse grade product is then ready for distribution. Fine particles remaining from the screening process are compacted into sheets that are crushed and screened to particle sizes suitable for blending.
Muriate of Potash
Muriate of Potash (“MOP”) is the most common form of potash. It is particularly effective when used in the commercial cultivation of the carbohydrate crops including wheat, oats, and barley. MOP is composed of potassium and chlorine in the forms of charged atoms, and therefore in the form of a salt which is soluble in water. MOP has a total global market size of approximately 55 million tonnes.
Sulphate of Potash
Sulphate of Potash (“SOP”) is the second major form of potash, which is particularly effective when used for the cultivation of horticultural crops, tobacco, and chloride-sensitive plants like citrus fruits. SOP is a potassium sulphate compound, which has the chemical formula K₂SO4. This sulphate-based potash product has a total global market size of approximately 6 million tonnes.
SOP provides the potassium needed to nourish crops, strengthen plants, ward off disease, improve transportability, and add flavour. These benefits of SOP fertilization are very important because crop growth efficiency and yield provide sustainable food supplies for the rapidly expanding global population, shrinking available agricultural land, and a growing global middle-class.
Sulphate of Potash Magnesia
Sulphate of Potash Magnesia (“SOPM”) is a specialty type of SOP applied to soils with magnesium deficiencies and/or on crops that are heavy magnesium consumers. While magnesium is an essential element for all plants, these crops have been found to be especially responsive: alfalfa, blueberry, beet, broccoli, cabbage, cauliflower, celery, clover, conifers, corn, cotton, cucumber, eggplant, lettuce, onion, pepper, potatoes, pumpkin, spinach, squash, tobacco, tomato, and watermelon. SOPM has the chemical formula K2SO4 2MgSO4. Soils in many parts of the world are magnesium deficient, including those found in Eastern USA, Latin America, Europe and Southeast Asia. This specialty potash product has a total global market size of approximately one million tons.
MOP vs. SOP
SOP is superior to MOP because it does not contain chloride, which has a toxicity impact on many plants, particularly fruits, vegetables, horticultural plants, and tobacco. When fertilizer is chloride-free it enhances plant health. As a result, a solid demand for SOP is created, given the chloride-free nature of the product. An abundance of research has concluded that the demand for specialty fertilizers (specifically SOP) has averaged a substantial annual growth over the last five years. When KCl is used, soils fall victim to increasing levels of chloride salt, which hurts plant yields. Many contend that because of this, farmers will likely gradually replace KCl use with SOP use.
(Source: sopib.com)
(Source: CRU Strategies, April 2011)
SOP sells at a significant premium to the more widely produced MOP. The chart below illustrates this price premium.
In addition, SOP has a lower salinity index than MOP. The higher salinity of MOP can cause plants to have difficulty absorbing water and nutrients from the soil thereby diminishing the quality and quantity of the crop. SOP has a salinity index of 46, the lowest of the potassium fertilizers, while MOP has a salinity index of 116. For these reasons, producers of high value crops use SOP over MOP. The photos below visually depict the benefits of using SOP on oranges.
SOP Production Method
Unlike MOP, SOP is not a naturally occurring mineral and must be produced by chemical methods. This is one of the reasons why SOP sells for a premium to MOP. Currently, SOP is produced using one of the following three methods: the Mannheim Process, the combination of Potassium Chloride and Sulphate Salts, and the evaporation of naturally occurring brines. IC Potash’s production method would be the fourth and is forecast to produce SOP at the lowest cost globally.
Mannheim Process
The most common method of producing potassium sulphate is the Mannheim Process, which is the reaction of potassium chloride with sulphuric acid at high temperatures. The raw materials are poured into the centre of a muffle furnace heated to above 600ºC. Potassium sulphate is produced along with hydrochloric acid in a two-step reaction via potassium bisulphate. This method for creating SOP accounts for 50% to 60% of global supply. The Mannheim Process is also the most expensive of the processing techniques due to the high input costs associated with purchasing MOP and sulphuric acid. This means that the final product costs about $500 per ton.
Potassium Chloride and Sulphate Salts
Potassium chloride can be reacted with various sulphate salts to form a double salt that can be decomposed to yield potassium sulphate. The most common raw material employed for this purpose is sodium sulphate. Sodium sulphate, either in the form of mirabilite (also known as Glauber’s Salt) or sulphate brine, is treated with brine saturated with MOP to produce glaserite. The glaserite is separated and treated with fresh MOP brine, decomposing into potassium sulphate and sodium chloride. These methods of production are the second greatest source of global supply at 25% to 30%. The cost of these processes are approximately $350 per ton or higher.
Naturally Occurring Brines
Some operations produce SOP from the salt mixtures harvested from natural brines. Three companies produce potassium sulphate in such a way on a large scale: GSL Minerals (Great Salt Lake, Utah), SQM (Salar de Atacama, northern Chile) and Luobupo Potash (Lop Nur, north-west China). This method requires brines with high sulphate levels such as those found within these salt lakes. The sulphate is typically present in the harvest salts in the form of the double salt kainite, which is converted to Schoenite by leaching with sulphate brine. The leach process is hampered by high sodium chloride content in the harvest salts and the halite is first removed by flotation. After thickening, the Schoenite is decomposed by simply adding hot water, whereupon the magnesium sulphate enters solution leaving SOP crystals. This process is currently the lowest cost method to make SOP. As lakes with sufficient brine mineral levels are rare, this method only accounts for 15% to 20% of global supply and costs approximately $200 per ton.
IC Potash Process
The IC Potash processes to convert polyhalite into SOP use unit operations common to the industrial minerals industry. Processing polyhalite to produce SOP and SOPM involves 7 main steps: primary crushing of the ore, wet grinding and halite salt removal, calcination, leaching, evaporative crystallization of SOP, evaporative crystallization of SOPM, drying, and granulation of the products. This method is expected to have an operating cost of approximately $162 per LT or $147 per ST.
SOP Grades
SOP is available in four main agricultural grades including standard, low chloride, granular, and soluble.
Standard SOP is used for direct application on hardy crops and the manufacturing of compound fertilizers. It contains 50% potassium oxide, 45% sulphur trioxide, and maximum 1% chloride. It appears as fine crystals with a typical particle size range of 0.21 mm to 1.68 mm.
Low-chloride SOP is used for direct application on sensitive crops and horticulture plants as well as the production of NPK mixtures. It contains 51% potassium oxide, 45% sulphur trioxide, and maximum 0.5% chloride. It appears as fine crystals and has the same particle size as standard SOP.
Granular SOP is the most important and most widely used grade in the United States and many other parts of the world. This grade is used in bulk blends, for mechanized spreading, and for manual application on crops that have even soil nutrient distribution. It contains 50% potassium oxide, 45% sulphur trioxide, and maximum 1% chloride. It appears as small granules with a typical particle size range of 0.84 mm to 3.36 mm. Granular SOP is produced by mechanically compressing the product, and then breaking and screening it to achieve a desired particle size. Granular grade can also be produced by granulating the material and using a binding agent. The price premium for granular SOP is $20 to $30 per tonne.
Soluble SOP is used in open field fertigation, foliar feeding, and greenhouse and hydroponic systems. It contains 52% potassium oxide, 45% sulphur trioxide, and maximum 0.5% chloride. It appears as a fine powder, which dissolves rapidly in water, with a typical particle size range of 0.106 mm to 0.30 mm. This form of SOP holds less than 5% of the SOP market and sells for a substantial premium to the other forms of SOP.
