Resource World Magazine

ESSENTI A L M I N ER A L S Potash helps feed the world USE AS FERTILIZER EXPECTED TO RISE AS GLOBAL DEMAND FOR MORE AND BETTER FOOD INCREASES by Peter Caulfield W hat makes potash an essential mineral? To get an answer, Resource World talked to Mike Blady, an executive with Vancouver-based Pacific Potash Corporation [PP-TSXV]. "Almost all, 95%, of potash is used as one of the main plant nutrients in agricultural fertilizer," said Blady. "Potash has no viable commercial alternative," Blady said. "Common substitutes, such as manure and glauconite, are low in potassium, and can be transported profitably for only short distances to the crop fields where they are applied." Potassium is the seventh most abundant element in the earth's crust. It is an essential salt and can be found in every cell of all plants and animals. "However, very few people had heard of potash until 2006-07, when the price spiked," Blady said. Potash is known as "the reg- 34 www.resourceworld.com ulator" in crop production; it regulates such essential processes as enzyme activation, photosynthesis, water use efficiency, starch formation and protein synthesis. Crops that are fertilized with potash have the strength to fight stress, disease, pests and wilting. Potash helps plants develop strong root systems and retain water. It helps animals grow and stay healthy, and helps increase milk production in cattle. In agricultural areas where the soil has been depleted and where natural potassium levels are low, potash is added to the soil to boost the level of nutrients, to improve crop quality and to increase crop yields. "There will always be a demand for potash, because human energy, which is powered by food, comes before all other kinds of energy," Blady said. Different countries use potash in different amounts. In the United States, for example, 45% of the mineral is used to fertilize corn. In China, 50% goes to help grow fruits and vegetables and 28% goes to rice production. In Brazil, approximately 75% of the potash that is consumed goes to soybean, sugar cane and corn production. And in Malaysia and Indonesia, more than 70% is used to fertilize the oil palm tree. Potash is becoming increasingly essential as world population increases, especially in what used to be known as The Third World, as the amount of farmland acreage decreases, and as meat and dairy production increase. "All of this puts more pressure on crop yields," Blady said. "More crops are needed to sustain economic growth and a rising population in emerging markets and Third World countries. As consumers' purchasing power increases, diets shift to better-quality food, especially meat, more cropland is lost to pasture and more livestock needs to be fed. The upshot of all this is that potash prices are expected to rise at steady rate." Although some potash deposits are near the Earth's surface, most lie several thousand feet underneath it. Millions of years ago, when the ancient sea that covered the Earth evaporated, potash ore deposits remained on the land's surface. After many years, the potash was buried by sediment, and today most potash must be mined and brought to the surface. The ore is removed by conventional mining techniques or by solution mining. In some cases it can also be harvested from salt lakes or seas. The ore or brine is processed in surface mills into the finished product. According to the United States Geological Survey Minerals Commodity Summary for 2011, Canada is the world's largest producer of potash. Most of Canada's reserves are located in Saskatchewan and to a lesser extent in New Brunswick and Newfoundland. At 56 billion tonnes, Canada's supply of potash is enough for several thousand years at the current rate of production. In 2011, Russia, the second largest producer, produced just under 7 million tonnes, and neighboring Belarus was responsible for about 5 million tonnes. Potash Corporation of Saskatchewan Inc. [POT-TSX; NYSE], a Canadian company with its headquarters in Saskatoon, Saskatchewan, and more commonly known as PotashCorp, is the largest producer in the world, accounting for about 20% of world's production. Uralkali [URKA-LSX], of Russia, is the second largest producer, with just under 20%. Belaruskali, with headquarters in the Republic of Belarus, JULY 2013

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