DOMESTIC production of phosphate-based fertilisers could be at risk with Australia’s largest manufacturer, Incitec Pivot Limited, flagging the potential closure of its Phosphate Hill plant in north-west Queensland.

However, several new phosphate projects both under way and in the pipeline across north-west Qld, the Northern Territory, and the Kimberley region of Western Australia are hoping to increase domestic production levels.

During an investor event held in Salt Lake City on Monday, IPL chief executive officer and managing director Mauro Neves said the company was “undertaking a full review” of the fertiliser businesses’ assets and “considering all the options available to us”.

“We start to identify assets that are not contributing and real estate that can be monetised,” Mr Neves said.

“Meanwhile, our operational focus will be on delivering on safe operations and continuous improvements of asset performance.

“We will conduct an asset strategic review within the next six to 12 months.”

IPL chief financial officer Paul Victor said the company was working with the “assumption” that Phosphate Hill would be closed in the near future, but was still evaluating how this would be done.

He said these options included putting “it on care and maintenance”, “outright close it” or to “utilise other parts of the asset in still a very productive manner”.

When asked about prospective closure costs, Mr Victor said this would depend on when and how this was done.

He said the company was “looking at the asset and the way that we operate it and the way that we envisage…when the end date would be, which is still kind of the current assumption we’ve made”.

“If the scenario changes and of course if it becomes closer or earlier it has impact on the [net present value] in the way you provide for it and how much you provide for it.”

Mr Neves said the Incitec Pivot Fertilisers team was working with the Queensland Government to determine the possible costs to remediate the site.

He said these actions were “very high in the works” for the company.

“The team…are doing fantastic work to collaborate with the Queensland Government.

“It’s underway and we will have some more technical information by the end of this calendar year.”

Mr Neves said IPL was continuing efforts to find a buyer for IPF, which would include Phosphate Hill.

“We truly believe that under different ownership IPF should benefit from greater synergies and operational efficiencies.

“This includes a full sale of the business or the selling of the business in its parts.

“We also know that speed is key and we are looking to deliver this as soon as practical.”

This comes after the company announced in July that negotiations had ended with prospective buyer, Indonesian company PT Pupuk Kalimantan Timur.

At the time, Mr Neves said IPL made this decision after it became evident that the transaction could not be finalised in a “timely manner”.

Operating for around 25 years, Phosphate Hill has the capacity to produce over one million tonnes of ammonium phosphate fertiliser per year.

The facility has been plagued by manufacturing issues in recent years due to flooding, rail line and gas supply disruptions, and a drop in commodity prices.

IPL had projected total production to be 730,000-770,000t for the financial year ending September 30.

This output was already a drop from previous figures of 780,000-820,000t.

Australia imports, exports

According to GrainGrowers Inputs of the Future – Fertilisers report, Australia’s total agricultural use of pure phosphorus in 2020 was 957,903t, with 33 percent of this coming from domestic supplies.

“Due to the long distance between Australian phosphate rock deposits and cropping regions, Australia imports most of its nutrient phosphorus rather than relying on its own abundant supply,” the report said.

“It should be noted that Australia also exports phosphorus-based fertiliser.”

The main source of imported phosphorus-based fertiliser in 2021 was China, followed by Saudi Arabia, the United States, and Morocco.

Ardmore Indian shipment milestone

Also located in north-west Qld, Centrex’s Ardmore Phosphate Rock Mine is the only other site producing significant volumes of phosphate concentrate.

The company predicts it will hit its Stage 1.5 annual production target of 625,000t of beneficiated phosphate concentrate by December, and hopes to eventually reach its total output goal of 800,000t.

Centrex has said it plans to supply about 500,000-600,000t to Australian and New Zealand customers and around 200,000t-300,000t to other markets when Ardmore hits maximum production.

On September 12, the company announced it would become the first Australian company to export phosphate to India after revealing a shipment of about 25,000t was scheduled for loading late this month.

“For many in northern Australia, it’s been a long-held dream that the immense phosphate endowment of the Georgina Basin could one day help feed Asia’s burgeoning economic and population growth,” Centrex managing director and CEO Robert Mencel said.

“Centrex’s first shipment of high-grade, low-impurity phosphate concentrate into this strategic market is beginning to turn this dream into reality.”

This came on the same day the Qld Government announced Centrex would receive a $2 million grant to put towards the capital expenditure requirements of the ongoing Stage 1.5 Expansion at Ardmore.

Other NQ projects in development

Just behind Centrex, is New Zealand-based company Chatham Rock Phosphate and North West Phosphate, which are both progressing several projects in north-west Qld.

Located 130km north-west of Mount Isa, North West Phosphate’s Paradise South project was granted a mining lease in May.

Projected to excavate up to 2Mt of phosphate ore per annum, the site will include a processing plant to process the raw material into phosphate concentrate.

Thanks to a Qld Government grant of $5.77M, the project timeline is expected to be accelerated up to six months, with construction to commence within the next year.

Northwest Phosphate executive chairman John Cotter said the company would work with the Qld Government to “get this project off the ground as soon as possible”.

“As many in the north-west region would know, this project was first talked about decades ago, but it is the cutting edge project design underpinned by world class technology that has been put together by the North West Phosphate project team that will make sure this project becomes a reality,” Mr Cotter said.

The company also has mining leases for two other projects in the region, Paradise North and D Tree, but is currently focusing on progressing Paradise South.

Chatham Rock Phosphate’s nearby Korella North and Korella South projects are also being progressed alongside a proposed Cloncurry Phosphate Distribution Hub.

In July, the company announced it anticipated Korella North would “be in production in Q4 2024”.

Korella North is yet to secure a mining lease, but all other approvals including road and rail agreements, and environmental approvals, were granted this year.

Kimberley, NT in works

Alongside the Qld projects, early work is under way to develop two NT phosphate mines and another at Halls Creek in WA’s Kimberley region.

Verdant Minerals Ammaroo Phosphate Project, located 200km south-east of Tennant Creek, is the only mine of this kind to be granted Federal Government major-project status, announced in February.

Touted as the “one of the largest undeveloped phosphate resources in the world”, Ammaroo is believed to contain more than 1 billion tonnes of phosphate ore.

On its website, Verdant Minerals said at capacity “the project will produce up to 2Mt per annum of phosphate rock for export” which would be converted into approximately 1Mt per annum of ammonium phosphate fertilisers.

The final investment decision is expected on 21 January 2025, with the anticipated date for the starting of construction being March 31.

Considered as having a “significant deposit of phosphate”, ASX-listed RareX is in the approvals stage of advancing its Cummins Range rare earth and phosphate project located in the Kimberley.

The company has indicated Stage 1 of the project will focus on phosphate production, with Stage 2 featuring an expansion into rare earths.

Memorandum of Understandings are in place with Nitron6, the world’s second-largest fertiliser distributor, and with OrdCo, the local fertiliser distributor in Kununurra, for phosphate-product related work.

Scoping studies are under way for Avenira’s Wonarah Phosphate Project located in the NT’s Barkly region with the aim of producing yellow phosphorous.

Mining agreements with the NT Government and the Arruwurra Aboriginal Corporation have been finalised and negotiations are progressing with logistic partners Aurizon and Port of Darwin.

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