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Phosphate |
AIMR 2011 |
Phosphate
Phosphate rock is a general term which refers to rock with high concentrations of phosphate minerals, most commonly of the apatite group. It is the major resource mined to produce phosphate fertilisers for the agriculture sector. Phosphorous also is used in animal feed supplements, food preservatives, anti-corrosion agents, cosmetics, fungicides, ceramics, water treatment and metallurgy.
There is no alternative for phosphate.
Australia’s commercial resources of phosphate are in northwest Queensland (Qld) at Phosphate Hill, 140 kilometres (km) southeast of Mount Isa and on the remote offshore territory of Christmas Island in the Indian Ocean. Phosphate Hill is a world-class rock phosphate resource which is close to the surface and easy to access and mine. The rock is ideal for the manufacture of high analysis mono-ammonium phosphate (MAP) and di-ammonium phosphate (DAP) fertilisers for domestic and international use.
Christmas Island is a source of quality rock phosphate which is exported to the Asia–Pacific region with products used widely in the palm oil sector of the region. Higher-grade rock phosphate is used by Australian manufacturers of MAP fertiliser.
DAP and MAP fertilisers have different ratios of phosphorous (P) and nitrogen (N), and have slightly different applications. Both products are generally produced as granules with a diameter of between 2-4 millimetres. DAP (20% P and 18% N) is used on broad-acre crops such as cereal, legume, fodder and horticultural crops as well as for dairy and newly-established pastures. MAP (22% P and 10% N) assists with early crop growth and enhances phosphorous uptake in broad-acre crops.
Resources
Excluding Christmas Island resources, Australia’s total Economic Demonstrated Resources (EDR) of phosphate rock in 2010 was 492.1 million tonnes (Mt), compared with 248.6Mt in 2009. Australia’s EDR occur in sedimentary phosphate rock (phosphorites) at Phosphate Hill (Qld) which has an average grade of about 24% P2O5, at Paradise South (Qld), which has an average grade of about 15% P2O5, and Wonarah in the Northern Territory (NT) which has an average grade of about 21.3% P2O5.
There is no publicly available information on phosphate rock resources for Christmas Island
About 46% of Australia’s total demonstrated resources of 1196Mt occurs in the Georgina Basin in Qld and the NT and are classified as paramarginal. The remaining 33% of demonstrated resources occur in Western Australia (WA) within carbonatite at Mount Weld, 26 kilometres (km) southeast of Laverton, and at Balla Balla magnetite deposit 100km west- south-west of Port Hedland.
About 80% Australia’s inferred phosphate resources, which total 1274Mt, occur as phosphorites in the Georgina Basin. These resources are distributed between Qld and the NT. The remaining 20% occur in WA, mainly associated with the Mount Weld deposit.
Accessible EDR
All of Australia’s EDR of phosphate is accessible.
JORC Reserves
Joint Ore Reserve Committee (JORC) Code Reserves comprise total phosphate in Proved and Probable Ore Reserves as defined in the JORC Code. In 2010, JORC Code Reserves of 137 Mt (81.6Mt in 2009) accounted for approximately 28% of Accessible Economic Demonstrated Resources (AEDR).
Exploration
Although specific data on phosphate rock exploration expenditure are not reported by the Australian Bureau of Statistics, there has been an increase in company exploration for phosphate, particularly in Qld and the NT, as a consequence of increased world demand for fertilizers.
Arafura Resources Limited announced the results of its drilling at Nolans Bore in the NT including 143m at 3.6% rare earth oxides (REO), 19.8% P2O5 and 0.56lb/t U3O8 from 23m, 27m at 4.1% REO, 25.6% P2O5 and 0.58lb/t U3O8, and 19m at 5.4% REO, 27.1% P2O5 and 0.90lb/t U3O8.
Minemakers Ltd reported the results of its drilling in the March quarter 2010 at the Wonarah deposit, 200km east of Tennant Creek, NT, including 8m at 35.4% P2O5 including 7m at 37.3% P2O5, 9m at 30.3% P2O5 , including 3m at 35.2% P2O5, 12m at 30.4% P2O5, including 6m at 37.6% P2O5 and 9m at 33.1% P2O5, including 7m at 36.5% P2O5.
Swift Venture Holdings Corporation, a Singapore-based company, has acquired a 70% option over GBM Resources Ltd’s phosphate resources at the Bungalien project, Qld, which is located 50km north of the Phosphate Hill deposit. Drilling at Bungalien has returned phosphate values ranging from 10% to 22% P2O5.
Production
There are two main locations for the production of phosphate rock, Phosphate Hill (Qld) and Christmas Island in the Indian Ocean.
The Queensland Department of Mines and Energy estimates that Incitec Pivot’s production from Phosphate Hill in 2009-10 amounted to 2.132Mt of phosphate rock (compared with 1.958 in 2008-09). Phosphate Resources Ltd produced 420 205 tonnes of phosphate rock and 42 300 tonnes of phosphate dust in 2009 from its Christmas Island operation.
Several small operations near Bendleby in South Australia (SA) produced about 2547 tonnes of phosphate rock in 2010 (5670 tonnes in 2009), which is used mainly in domestic industrial applications.
World Ranking
The United States Geological Survey (USGS) estimated that total world resources of phosphate rock are 65 000Mt. Australia’s EDR comprises less than 0.01% of the world’s resources. Morocco and Western Sahara jointly hold about 76%, followed by China with 6%, Algeria 3%, and Syria with 2.8%.
USGS estimated that world production of phosphate rock totalled 176Mt in 2010 (166Mt in 2009), with China producing 65Mt, the USA 26.1Mt and Morocco and Western Sahara 26Mt.
Industry Developments
Phosphate rock prices, which were influenced by the global financial crisis in 2008, fell substantially in early 2009 to US$110 a tonne but were still significantly above the long term average price of US$50. By early 2010, the price for Moroccan 31-33% P2O5 rock had increased from US$100 and US$110 a tonne Free-on-Board (FOB) to between US$140 and US$150 a tonne FOB. The Chinese demand for phosphate grew by about 18% in 2009 continued and to strengthen in 2010 as a result of China importing phosphate rock to supplement domestic production. By early 2011, the price for Moroccan 31% to 33% P2O5 was reported in the range of US$180 and US$205 a tonne FOB.
Legend International Holdings Inc. (Legend) plans to commence mining of rock phosphate as early as 2012 at its Paradise North (Qld) deposit containing 7.3Mt grading 28.1% P2O5 for direct shipping ore, direct application rock phosphate and single superphosphate. The company will seek tenders for the construction of up to a 1 million tonnes per annum (Mtpa) rock concentrate flotation beneficiation plant at its Paradise South deposit capable of producing 32-34% P2O5 phosphate rock concentrate. Legend has reported that the combined resources of the Paradise North and Paradise South deposits are 81Mt grading 18.1% P2O5. Both Paradise North (formerly known as Lady Jane) and Paradise South (formerly known as Lady Annie) deposits are located about 70km north of Mount Isa.
Legend is seeking prospective joint venture partners for a proposed Phosphate Fertiliser Complex to be constructed at Mount Isa. The Mount Isa Complex will consist of a sulphuric acid plant, phosphoric acid plant, ammonium phosphate plant and an aluminium fluoride plant. The complex will have an initial combined production capacity of MAP and DAP in the order of 600 000 tonnes per annum (tpa).
The Wengfu Group Ltd of China (Wengfu), which completed an extensive feasibility study in June 2010 into the potential of doubling production at the proposed Paradise Phosphate Project, confirmed that development of the project was technically and economically viable. The feasibility study, which included designs for a 2Mtpa phosphate rock flotation beneficiation plant to be built at Paradise South, covered two development scenarios with the production volumes of:
- 600ktpa MAP/DAP, 15ktpa Aluminium Fluoride
- 1200ktpa MAP/DAP, 30ktpa Aluminium Fluoride
In mid 2011, Legend submitted an Environmental Impact Statement for assessment to the Queensland Department of Resource Management for the Paradise South project which covered mining, beneficiation, supporting infrastructure and transport. Approval is expected in first quarter 2012.
Legend has signed a Memorandum of Understanding (MoU) with Xstrata Zinc regrading the supply of sulphuric acid to the company’s proposed phosphoric acid plant in Mt Isa.
In mid 2011, the company also signed a MoU with Alcoa of Australia Limited to investigate the viability of supplying Alcoa with aluminium fluoride produced at Legend’s proposed Paradise Phosphate project with Legend receiving from Alcoa aluminium hydroxide for the aluminium fluoride production process. Legend International is proposing to build either a 15ktpa or 30ktpa aluminium fluoride (AlF3) unit at the site of its proposed chemical plant. The current demand for aluminium fluoride in Australia is approximately 30 000 tonnes which is typically sourced from China.
Following the completion of its scoping study in April 2010, Krucible Metals Ltd has submitted an Environmental Management Plan to the Queensland Government for approval and was negotiating with the Traditional Owners, the Yulluna People, for an approved Native Title Agreement to develop a quarry style operation for its Korella Phosphate deposit (formerly known as PHM South). The deposit is located 150km southeast of Mount Isa and immediately adjacent to Incitec Pivot Ltd’s Phosphate Hill Mine. The company reported an Inferred Resource of 19.3Mt grading at 19% P2O5 based on a cut-off grade of 10% P2O5 with a high grade zone containing 5Mt grading 30.8% P2O5 at a cut-off grade of 25% P2O5. Cadmium content is in the order of 2 parts per million (ppm) to 5 ppm.
Korab Resources Limited plans to commence development of a phosphate deposit located at GeolSec near Rum Jungle, 65km south of Darwin in the NT. Subject to receiving all the necessary approvals the company plans to develop a simple quarrying operation with no processing other than grinding and bagging to supply the agricultural sector with a finely ground-up rock phosphate to be used for direct application as an organic fertiliser. The proposed start-up cost is expected to be in the order of $200 000 to $300 000. Initial production will be about 15ktpa increasing to 30ktpa by 2013.
Phosphate Australia Limited is in contact with several international companies associated with the fertilizer industry with the aim to secure a strategic partner to assist with the pre-feasibility study of its Highland Plains project in the NT. The project has reported JORC Code compliant Inferred Resource of 56Mt at 16% P2O5 at a cut-off grade of 10%. Within this global resource, there is a higher grade zone (referred to as the Western Mine Target Zone) which comprises a JORC Code compliant Inferred Resource of 14Mt at 23% P2O5 at a cut-off grade of 15% P2O5. In 2011, the company signed an MoU with China National Electric Engineering (CNEEC) aimed at possibly establishing a binding agreement for the provision of engineering, procurement and construction services to the project. CNEEC has expertise in power plant design and construction as well as extensive experience in the design and construction of port facilities and pipelines. A key milestone for a binding agreement will be the completion of a bankable feasible study by Phosphate Australia Limited. The company is planning for the production of 3Mtpa of premium-grade beneficiated rock phosphate to be transported by a slurry pipeline to a barging facility on the Gulf of Carpentaria.
Minemakers Ltd has completed its direct shipping ore feasibility study into its Wonarah phosphate project in the Georgina Basin in the NT which found that the phosphate rock was suitable for fertiliser manufacture. However, because of a lack of control in the spot or short term contract markets in combination with future prices and a rapidly rising Australian dollar, the company has moved its emphasis from a simple direct shipping ore operation. It is also considering development of a downstream process involving either an on-site superphosphoric acid (SPA) production plant or full development, which would include a phosphate fertiliser and chemical production either on site near Tenant Creek or near Darwin. The project involves mining two deposits, known as Arruwurra and Main Zone. The project currently has JORC Code compliant resource of 620Mt grading 18% P2O5, based on a cut-off grade of 10% P2O5 with an Indicated Resource of 289Mt grading 18.5% P2O5 and an Inferred Resource of 331Mt grading 17% P2O5.
Minemakers owns 6.67% of JDCPhosphate Inc, a Florida-based company which has patented an improved dry kiln method of producing phosphoric acid (referred to as SPA) without using sulphuric acid. Merchant wet acid grade phosphoric acid production uses sulphuric acid. Operating and capital cost estimates are favourable compared to those associated with wet acid production. The process which appears to particularly suited to Wonarah phosphate would allow the company to mine a relatively lower grade product, undertake relatively simple beneficiation on site and also construct the kilns at Wonarah. The SPA could be transported in tankers to near Tennant Creek and then railed to Darwin. Asia currently imports more than 3Mt of P2O5 as acid, and demand is anticipated to increase. JDCPhosphate is raising capital to construct and operate a demonstration plant in Florida and aims to have it completed around the end of 2012.
A New Zealand fertiliser company has successfully produced a single superphosphate by blending Wonarah direct shipping ore with Moroccan phosphate rock.
Minemakers terminated its non-binding MoU signed with the Verte Group Pty Ltd who were to seek equity funding for the development of a direct shipping ore mine and a large rock phosphate beneficiation plant at the mine site as well as a 260km railway from Wonarah to the Adelaide to Darwin railway near Tennant Creek.
In February 2011, Minemakers and the Arruwurra Corporation who are the Traditional Owners signed a Mining Agreement giving approval to the development of the Wonarah phosphate deposits. The agreement provides a clear process for financial benefits to the Traditional Owners, the protection of sacred sites and skills training in the mining, processing and freight operations for local indigenous people.
In mid 2011, Minemakers signed a non-binding MoU with Bombay Stock Exchange listed NMDC Limited to establish a pathway for the development of Wonarah project. The MoU could lead to a full joint venture agreement between the two companies in which NMDC would acquire 50% equity in the project, as well as have responsibility for arranging project finance for the full development of the project.
Arafura Resources Ltd is preparing a bankable feasibility study on its Nolans Bore rare earth-phosphate-uranium-thorium deposit, located 135km northwest of Alice Springs in the NT. The study will consider establishment of the Nolans Bore Mine, a transfer station on the Darwin to Adelaide railway, and a proposed Rare Earths Complex at Whyalla in SA. The Whyalla complex will have two processing streams, one for rare earths and another for phosphate. Nolans Bore has a combined JORC Code compliant Measured, Indicated and Inferred Resource totalling 30.3Mt to a depth of 130m which grades at 2.8% REO, 12.9% P2O5, 0.44 pounds per tonne U3O8, and 0.27% Th using a 1% Rare Earth Element cut-off grade.
Kimberley Rare Earths Limited, which acquired 25% of the Cummins Range rare earth oxide-uranium-phosphate deposit, 130km southwest of Halls Creek, WA, in early 2011, plans to carry out an extensive drilling campaign to upgrade the resources from Inferred to Indicated. The deposit currently has a JORC Code compliant Inferred Resource of 4.17Mt at 1.72% total rare earth oxide (TREO), 11.0% P2O5, 187ppm U3O8 and 41ppm Th at a cut-off grade of 1% TREO. The mineralisation of principally apatite and monazite is up to 50m thick and occurs as a sub-horizontal feature within weathered regolith which has developed over carbonatite and pyroxenite rocks.
In August 2010, Atlas Iron Limited completed the merger with Aurox Resources Limited which owns the Balla Balla deposit, 110km southwest of Port Hedland, WA. The deposit consists of a significant titanomagnetite orebody containing resources of iron, vanadium and titanium, as well as a phosphate resource of 89.69Mt grading 3.74% P2O5. The phosphate, which is in the form of apatite, occurs in the waste rock immediately above the titanomagnetite and will require extensive beneficiation because most phosphate rock is sold worldwide at a grade close to 30% P2O5.
On Christmas Island, Phosphate Resources Ltd shipped around 616 000 tonnes of phosphate during 2010-11, compared with 566 645 tonnes during 2009-10. The company’s current resource statement and lease term provide for a 2019 completion date for mining operations. However, the company has not received Australian Government approval for land clearing on parts of its approved mining leases.