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Americas mega fertilizer deals spur commodities boom by qrt etget
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Americas mega fertilizer deals spur commodities boom |
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Business,Business News,Business Opportunities
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The United Nations estimates that the world’s population will reach 7.7 billion by 2020 and 9.3 billion in 2050. Another United Nations estimate says that only 30% of the arable land in use in the 1950’s will be available per person in 2050.
“Just when we need more soil to feed the 10 billion people of the future, we’ll actually have less—only a quarter of an acre of cropland per person in 2050, versus the half-acre we use today on the most efficient farms.� David Montgomery, author of the 2007 book Dirt: The Erosion of Civilizations Fertilizers are going to become increasingly important to improve crop yields. 2010 is going to be the remembered as the year of the fertilizer deal. BHP Billiton acquired Athabasca Potash for C$341 million. Vale paid US$3.8 billion for the South American fertilizer assets of US commodity supply chain company Bunge and at the same time acquired a 16 per cent stake in Fertilizantes Fosfatados of Brazil. The recent $38 billion all-cash bid for Potash Corp (POT-TSX) by BHP Billiton (BHP-NYSE) a mere two days after I published “Potash Sector Heating Up…Again� has stirred up the fertilizer sector and reminded the investment community of potash’s uniquely attractive economic fundamentals.
There are two junior potash developers in Saskatchewan, and one in Brazil, on my radar screen. Amazon mining Corp. (TSX.V – AMZ) was founded by Brazilians in 2005. The company is focused on the development of its Cerrado Verde project. Cerrado Verde is source of a potash rich rock from which Amazon plans to produce a slow-release, non-chloride, multi-nutrient, fertilizer product. Brazilian soils are generally poor in potash and Brazil only produces 10% of its current potash needs.
Their leading exports - sugar cane, soy beans, orange juice, coffee, tobacco, beef, poultry and corn - all require potash rich environments. Brazil is one of the few countries left with potential to materially increase arable land and that has an abundance of freshwater (Brazil, Canada, China, Colombia, Indonesia and Russia have half the world's supply of freshwater. Asia has the lowest water supply per capita) – increasing the size of the country’s agricultural land base will drive further potash demand. Independent Engineering work began on the Preliminary Economic Assessment (“PEA or Scoping Study�) for the Cerrado Verde project in July, 2010.
The work is being completed jointly by ECM.S.A - Projetos Industriais and SRK Global Mining Consulting, results could be as early as October. Amazon is in the midst of lab scale testing of preliminary ThermoPotash products. To date, the company has received excellent results from solubility tests and nutrient availability tests. Tests are also being conducted to demonstrate ThermoPotash’s resistance to leaching (The combination of acid soils and torrential rains in Brazil reduces the efficiency of traditional chloride based potassium because it dissolves too quickly) and how effective ThermoPotash is on reducing limestone requirements to reduce the acidity of soil. The Company has entered into an agreement with the University of Lavras, Minas Gerais, Brazil, to complete a full slate of tests required to register the ThermoPotash product as a fertilizer in Brazil.
The goal is to complete the requirements and register the product in Q3 2011. An interesting development to Amazon’s remarkable story is the discovery of Natural Gas close to their Cerrado Verde project - a development that might have economic implications and bears watching. "We are pleased to see that the discovery of natural gas will also be a boon to the agricultural sector because it will lower costs for the local production of potash. We are undertaking talks with Amazon Mining in order to reach an agreement that will ensure the flow of benefit in the near future." State Secretary Mr. Ribeiro Analyst coverage includes: • Clarus Securities • Kaiser Bottom-Fish Online Saskatchewan is the largest potash producer in the world, typically accounting for 30 percent of total production.
The value of Saskatchewan potash sales was $3.1 billion in 2009 Encanto Potash (TSX.V - EPO) is steadily working towards its maiden 43-101 resource calculation. And EPO’s flagship property, the Muskowekwan, is on trend with all the major players in the potash basin.
Last week EPO published its initial interpretations of the 65 square kilometre 3D survey over project area. The data supports findings from its original 2D survey indicating that the potash bed is continuous and structurally intact. Saskatchewan's competitive advantage is the exceptional extent and quality of its ore reserves. The high-grade ore lies in basically flat beds, allowing the use of highly efficient mining techniques. The province's industry is widely considered to have the lowest production costs in the world. EPO’s first drill hole at its Muskowekwan property in Saskatchewan returned values of 25.2% K2O (39.9% KCl) over 3.6 metres in the Patience Lake potash bed, and 25.5% K2O (40.4% KCl) over 2.4 metres in the Belle Plaine potash bed.
Drilling in the lower Esterhazy Member returned values of 5.3 metres of 12.4% K2O (19.6% KCl). According to a research report dated August 30th 2010 from Industrial Alliance, EPO’s first drill hole shows depth, grade and thickness on par with both Potash Corp’s Rocanville and Allan producing mines and Athabasca Potash’s (Now BHP Billiton) Burr Property in the feasibility stage, recently bought out by BHP for $341 million. The 2010 drill program, beginning in the next couple of weeks, will verify grade distributions throughout the property. EPO expects an initial resource estimate around Christmas or just into the new year. According to Boyd PetroSearch, less than 10% of the 69 square mile 3D survey shows anomalies in seismic response, indicating that the potash could be continuous over 30,000 acres. Western Canada's potash deposits occur in the Middle Devonian Prairie Evaporite formation at depths in excess of 900 m.
Start up costs can run in access of $2b. Very few junior companies will have the experienced management team and the requisite financial backing necessary to pull off building a conventional underground potash mine. Encanto Potash has the backing of the Endeavor Financial Group so access to capital should not be a problem.
First Nations involvement and having the projects on their traditional territory lessens the number of stakeholders in negotiations and consultations. Western Potash Corp. (TSX.V - WPX) has a NI 43-101 compliant Mineral Resource Estimate for its Milestone property in southern Saskatchewan. The estimate consists of 41 million tonnes of Measured Resource (contained KCl), 133 million tonnes of Indicated Resource, and 560 million tonnes of Inferred Resource. The resource estimate at Milestone was prepared by Agapito Associates Inc. (“AAI�) of Grand Junction, Colorado.
Mineral resources for the potential solution mining intervals (Patience Lake, Belle Plaine, and Esterhazy Members, excluding interbeds, are estimated to be as follows.. I am an expert from China Chemicals Products, usually analyzes all kind of industries situation, such as best pda gps software , motorola razr v3c battery.
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