VINACHEM

As the number of humans on the Earth continues to grow, it is becoming more and more important for farmers to efficiently use their to feed the growing number of mouths around the world.

That’s where 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).

Here the Investing News Network explains the common uses for these two types of potash, also looking at methods of mining them and which companies are doing so.

Muriate of potash

Potassium chloride, or MOP, is the most commonly used potassium 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; however, if the soil or irrigation water being used has high levels of chloride, the added content can create toxicity. This means that the levels have to be carefully managed, and MOP must only be used for select crops.

Still, MOP remains the most commonly used potash fertilizer, with about 55 million tonnes being sold and used annually. Having said that, an issue with the popularity of MOP is that in recent years production has overcome demand, resulting in lower-than-desired prices for the product. According to CHF Investor Relations, “[a]s demand continues to increase, existing MOP producers will ramp-up idle capacity and re-evaluate mothballed brownfield expansions. These sources of supply will need to be absorbed by the market before greenfield MOP projects make economic sense.”

Highfield Resources (ASX:HFR) is a MOP exploration company that currently has four potash projects in Spain. It recently completed the definitive feasibility study for its flagship Muga project; the study revealed its low-capex potential and high margins.

While PotashCorp (TSX:POT,NYSE:POT) is the biggest MOP producer in Canada, there are juniors looking to break into the market. One example is Western Potash (TSX:WPX), a Saskatchewan-based company currently in the development stage at its Milestone property. The company completed a scoping study for a pilot plant-scale selective solution mining operation at the project just last month and also received funding from Beijing Tairui Innovation Capital Management. Specifically, the China-based company agreed to make an $80-million strategic investment in Western Potash.

Another Saskatchewan company looking to get a piece of the MOP market is Gensource Potash (TSXV:GSP). It just signed an LOI with Arizona Agropecuaria “to allow the direct manufacture and shipment of potash fertilizer from a scalable, dedicated mine in Saskatchewan to a specific market in Brazil.”

Sulfate of potash

Potassium sulfate, or SOP, is considered a premium-quality potash and has two nutrients: potassium and sulfur. Using it for growing produce 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 make food taste and look better and improves a plant’s ability to absorb other essential nutrients, such as phosphorous, iron and other micronutrients.

SOP is most commonly used on high-value crops like fruits, vegetables, nuts, tea, coffee and tobacco. SOP works better on crops that are sensitive to chloride, which can sometimes have a toxic impact on fruit and vegetable plants.

SOP comes at a higher price than MOP and is also in higher demand, according to CHF, as there is an inability to economically expand supply through existing production processes. That means that there is a deep need for more SOP production in order to meet supply shortfalls. Luckily, there are quite a few companies currently developing and exploring SOP mines.

Producing SOP

Unlike MOP, SOP is not a naturally occurring mineral, and usually must be developed through chemical methods. While there are some operations that harvest salt mixtures from natural brines to produce SOP, the most common method used to produce it is called the Mannheim process.

The process involves pouring raw materials into a muffle furnace that is heated above 600 degree Celsius; that creates a reaction between potassium chloride and sulfuric acid. This method accounts for roughly 50 to 60 percent of global SOP supply, according to IC Potash (TSX:ICP).

Another way to create SOP is to react potassium chloride with various sulfate salts to form what is called a double salt — the double salt can then be decomposed to create potassium sulfate. “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,” states IC Potash. This is the second-greatest source of global SOP supply, accounting fro about 25 to 30 percent.

IC Potash uses its own method of developing SOP, the Ochoa process. It involves processing polyhalite to convert it 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; it is essentially the extraction of SOP from glauconite. Potash West has applied for a patent for the process, “which uses a concentrated hot acid leach that breaks down the glauconite recovering all the potassium within the mineral in 6 to 8 hours. The next step is precipitation leaching and solid liquid separation to procure high magnesium potash, alum and iron oxide.”

As mentioned, there are some operations that produce SOP using salt mixtures from natural brines, which requires brine with high sulfate levels, typically found in salt lakes. Some examples of companies able to use naturally occurring brines are Compass Minerals International (NYSE:CMP), which operates out Great Salt Lake in Utah, and Sociedad Quimica y Minera (NYSE:SQM), located at Salar de Atacama, a salt flat in Chile.

Other companies that are focused on SOP production include Potash Ridge (TSX:PRK), which just acquired Valleyfield Fertilizer, a private company that has been working to advance the development of a SOP project in Quebec.

There is also Danakali Ltd. (ASX:DNK), an Australia-based company developing the Colluli SOP project in Eritrea, Africa. Danakali most recently reported that pump tests at Colluli found potassium-rich brines, which will negate the need for large footprint evaporation ponds, as well as time-consuming evaporative harvest salt generation.