The sinking dollar and surging global fertiliser prices have set the scene for a profitable start to processing activity at Australia's only high grade rock phosphate mining business.
Agriflex's new Ardmore mine in North West Queensland shipped its first 7200 tonne consignment of high grade phosphate rock in October to fertiliser processors in southern Australia.
Another consignment, via the Port of Townsville, is set to go to New Zealand before Christmas to become superphosphate, largely for the pasture market.
NZ imports about 600,000t of phosphate each year, while Australia brings in about 400,000t to be blended into cropping and pasture fertiliser lines - ready markets which Agriflex hopes to capture as it expands its mine, south of Mt Isa.
It already has initial supply contracts with all major fertiliser distributors within Australia, including offtake agreements covering production for the first three years of the mine's life.
Aiming for 800,000t
Depending on when access to bulk ship loading facilities at Townsville and bulk rail freight investment options can be secured, the goal is to lift local rock phosphate output to about 800,000t a year.
The Ardmore "demonstration" phosphate plant currently loads into shipping containers which are freighted to port by rail partner Aurizon, then emptied into bulk carriers.
The processing plant's capacity is restricted to 240,000t, although it is set for upgrades next year.
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Agriflex is the fertiliser division of listed Adelaide-based Centrex Metals, which kick-started production about seven months ago, having owned the site, keeping it "on ice", since 2014.
Centrex managing director, Robert Mencel, said the depreciating dollar's impact on import prices had helped stir extra support for the local product, which had already attracted attention from the agriculture sector given the past year's soaring global price trends.
A year ago Moroccan phosphate rock was trading around $230/tonne ($US150), but has been averaging $500/t ($320) since July.
Earlier this year prices hit record spot market highs above $1800, as rising energy costs and supply disruption scares, both largely caused by Russia's war on Ukraine, highlighted the cost of Australia's reliance on imported phosphate.
Although the 1000 kilometre freight journey from Ardmore to port was also an inescapable expense for the Queensland producer, Mr Mencel said having a local source for high grade product exponentially reduced the supply chain risk to Australian and NZ agriculture.
"Our prices follow the international trade, but we're certainly competitive," he said.
"I'm sure we'll also be able to withstand price pressures if the market drifts down again."
Ardmore is west of fertiliser kingpin Incitec Pivot's nearby Phosphate Hill mine, which produces lower grade phosphate to supply its Victorian fertiliser blending plant.
Fortunately for Centrex' start up plans, an unusually wet year has not caused flooding issues or significant disruptions at the new site, although mining and washed phosphate drying processes have slowed at times.
Direct to farm option
Mr Mencel said while most phosphate rock from Ardmore was destined for the commercial fertiliser industry, Agriflex had also mined an initial batch of 25,000t, crushed and processed for delivery to farms for direct application.
Agriflex agronomist, Walter van Leeuwen, said the availability of direct application phosphate rock could be fortuitous timing for irrigators and higher rainfall region producers.
"There's a lot of concern about what's happening in fertiliser markets, but we can offer an effective and affordable soil nutrition solution in the form of direct application phosphate rock which we deliver (via road) direct to farms," he said.
"Many farmers are unfamiliar with direct application phosphate rock but we encourage them to talk to us about its fantastic benefits."
Finely crushed phosphate rock (less than four millimetres diameter) provided a consistent slow release organic fertiliser which could help strengthen biotic microbial activity and release additional tied-up soil nutrients.
"It is a very cost effective way to augment crop nutrition," Mr van Leeuwen said.
Mr Mencel said the while Ardmore's life was likely to extend well beyond initial 10-year forecasts, the company was looking for more phosphate deposits to develop.
Potash feasibility
Centrex is also likely to begin developing and exporting potash from its Oxley site, south east of Geraldton in Western Australia, depending on current feasibility testing.
The miner wants to adopt a direct process route to higher value potash fertiliser products such as potassium nitrate and potassium sulphate.
However, given Australia is a relatively modest 80,000t a year market and several other hopeful potash ventures have been starting, too, Centrex has not confirmed any deadlines.
"We have not made any commitments yet, but we looking at our options ... the project could be underway in three to five years," he said.
ASX-listed Salt Lake Potash, once poised to be Australia's first sulphate of potash producer, recently sold to Czech family-owned energy funding business, Sev.en Global Investments, after going bankrupt last year owing almost $200m.
Its portfolio covers nine lakes, spread across WA's Goldfields region.
Other Australian companies also involved in sulphate of potash developments include Kalium Lakes in the Pilbara which did become Australia's first potash producer in August, supplying WA's big manufacturer and distributor, CSBP Fertilisers.
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