Phosphate

Allison Britt (allison.britt@ga.gov.au)

Phosphate rock is a general term referring to rock with high concentrations of phosphate minerals. It is the major resource mined to produce chemical fertilisers for the agriculture sector and 90% of phosphate rock goes towards this purpose. Plants require three major nutrients for life – nitrogen (N), potassium (K) and phosphorous (P). Phosphorous is used in the control of energy transfer and storage at the cellular level as well as playing an important role in metabolic processes.

Phosphorous is also used in animal feed supplements, food preservatives, in baking flour, pharmaceuticals, anti-corrosion agents, cosmetics, fungicides, insecticides, detergents, ceramics, water treatment and metallurgy.

There is no substitute for phosphate in agriculture.

The most common source of phosphate rock is phosphorite, which is a marine sedimentary deposit. The other source is guano, which is the accumulation of bird or bat excrement. The most common phosphate minerals belong to the apatite group, Ca5(F,Cl,OH)(PO4)3, with main minerals being collophane, francolite and dahlite.

Australia's commercial resources of phosphate are in northwest Queensland (Qld) at Phosphate Hill, 140 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 that 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 as direct application fertiliser 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 and nitrogen, and have slightly different applications. Both products are generally produced as granules with a diameter of between 2-4 mm. DAP (20% P and 18% N) is used for broad-acre products 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. Ideally, phosphate rock for fertiliser production will contain approximately 30% phosphorus pentoxide (P2O5), around 5% calcium carbonate and less than 4% iron and aluminium oxides.

Resources

Australia's total Economic Demonstrated Resources (EDR) of phosphate rock in 2011 was 945.4 million tonnes (Mt), compared with 492.1 Mt in 2010. Upgrades at Paradise South (QLD), Wonarah (NT) and Mt Weld (WA) account for the bulk of the increase.

Australia has a total demonstrated resource of 1390 Mt, of which 445 Mt (32%) is classified as paramarginal. All of the phosphate occurrences in Queensland and the Northern Territory occur as phosphorites in the Georgina Basin, which hosts 89% of Australia's demonstrated resources. The remaining 11% occurs at Christmas Island and in Western Australia within carbonatite at Mount Weld and at the Balla Balla magnetite deposit.

About 1646 Mt (90%) of Australia's Inferred phosphate Resources, which total 1813 Mt, also occurs in the Georgina Basin. The remainder occurs in WA, mostly at the Mount Weld deposit but small amounts (less than 5 Mt) occur also at Balla Balla and Cummins Range.

Australia's EDR of phosphate occur at:

  • Phosphate Hill (Qld) – average grade 23.9% P2O5,
  • Paradise South (Qld) – average grade 11.0% P2O5,
  • Paradise North (QLD) – average grade 28.4% P2O5,
  • Wonarah (NT) – average grade 18.2% P2O5,
  • Nolans Bore (NT) – average grade 13.5% P2O5,
  • Ammarroo (NT) – average grade 16.4% P2O5,
  • Mt Weld (WA) – average grade 14.3 % P2O5, and
  • Christmas Island – figures not publically available.

Published grades for EDR range from 8.7% P2O5 at Paradise South to 28.4% P2O5 at Paradise North. Traditionally, phosphate rock needs to have an average grade of around 30% P2O5 for direct shipping. However, as high-grade resources are declining and demand is projected to increase, companies are increasingly evaluating projects in which lower grade phosphate resources will be mined and then beneficiated through processes such as washing, flotation and calcining. Similarly, milling operations in which phosphate products are produced as a by- or co-product are potentially economic at low grades.

Phosphate prices, as sourced from the World Bank, are expressed in the amount of US$ paid per metric tonne for free-alongside-ship (f.a.s.) Moroccan phosphate (70% bone phosphate of lime (BPL)). Figure 10 shows the monthly price chart for phosphate since 2008 when phosphate prices were at their peak before crashing during the global financial crisis. By 2011, prices had recovered from the lows of US$90 that occurred in 2009. Prices for 2011 steadily climbed from US$155 in January to US$202 in December. They fell in 2012, dipping to US$175 in May and June and recovered by December 2012 to US$185.

The long-term annual price chart for phosphate rock (Figure 11) shows that, for the most part, phosphate prices are generally flat but subject to price spikes from time to time. The price spike in 1974-75 was caused by the Moroccan Office Cherifien des Phosphates radically increasing the price for phosphate, followed quickly by Nauru and American producers. Phosphate demand, however, slumped and prices gradually returned to the long-term average. The price spike in 2007-8 was a result of two economic factors combined with an already overheated market: The first was real increased fertiliser demand for food in developing regions (particularly Asia) and, importantly, for the emerging biofuel industry. The second factor was the resulting speculation about this increased demand and its implications for food security. The fact that prices have not yet returned to the long-term real dollar trend is possibly a truer reflection of the increased demand for fertilisers in Asia and other developing regions.

Accessible EDR

Virtually all of Australia's Economically Demonstrated Resources of phosphate are accessible. A small resource on Christmas Island is inaccessible because of environmental restrictions.

JORC Reserves

In 2011, Joint Ore Reserve Committee (JORC) Code Reserves in the Proved and Probable Reserve categories comprised 280 million tonnes of phosphate accounting for approximately 30% of accessible EDR with the remainder defined as Measured and Indicated Resources.

Exploration

Data on exploration expenditure for phosphate are not available in published statistics. However, exploration for phosphate remained active across Western Australia, Queensland and the Northern Territory, buoyed by steady prices and the predicted increase in world demand for fertilisers.

Over 2011 and 2012, Rum Jungle Resources Ltd completed 2082 RC holes for 61 221 m, along with 32 diamond drill holes, at the Ammaroo Phosphate Project in the Northern Territory. Results include 8 m at 30.8% P2O5 from a depth of 15 m, 9 m at 26.6% P2O5 from a depth of 8 m, and 8 m at 35.1% P2O5 from a depth of 36 m.

Other large exploration programs were carried out at the Korella deposit at Corella Bore (Qld) by Krucible Metals Limited with 47 RC percussion holes for 2107 m exploring for phosphate and rare earths and at Cummin Range (WA) where Kimberley Rare Earths Limited completed a 77-hole, 4230 m RC drilling program. Rox Resources Limited completed a 29-hole, 1900 m RC drilling program at Marqua (NT) in 2011, which included results of 4 m at 26.3% P2O5 from 45 m, 5 m at 20.7% P2O5 from 25 m and 7 m at 20.2% P2O5 from 12 m.

A smaller drilling program was instigated by Minemakers Limited in 2012 to the test the general potential of its western, southwestern and northwestern tenements at their Wonarah Project in the Northern Territory.

Figure 10 is a line graph showing the monthly prices in United States dollars per tonne of phosphate rock from January 2008 to December 2012.

Figure 10. Monthly phosphate prices since 2008 for phosphate rock (Morocco), 70% BPL, contract, f.a.s. Casablanca. Source: World Bank.

Figure 11 is a line graph showing the average annual prices in United States dollars per tonne of phosphate rock from 1960 to 2012.

Figure 11. Long-term phosphate prices since 1960 for phosphate rock (Morocco), 70% BPL, contract, f.a.s. Casablanca. Source: World Bank.

Production

There are two main locations for the production of phosphate rock in Australia: Phosphate Hill in Queensland and Christmas Island in the Indian Ocean. In 2011, Incitec Pivot Limited produced 2.49 Mt of phosphate rock from Phosphate Hill and Phosphate Resources Limited produced 604 569 tonnes of phosphate rock and 62 410 tonnes of phosphate dust from Christmas Island.

Several small operations near Bendleby in South Australia (SA) produced about 1650 tonnes of phosphate rock in 2011 (2547 tonnes in 2010), which is used mainly in domestic industrial applications.

World Ranking

The United States Geological Survey (USGS) estimates that total world resources of phosphate rock are 71 000 Mt. Australia's EDR comprises less than 1% of the world's resources. Morocco and Western Sahara jointly hold about 70%, followed by Iraq with 8%, China with 5% and Algeria with 3%. Syria, South Africa, Jordan and United States of America each hold around 2% of the world's phosphate resources.

The USGS estimated that world production of phosphate rock in 2011 totalled 191 Mt (181 Mt in 2010), with China producing 72 Mt, the USA 28.4 Mt, Morocco and Western Sahara 27 Mt and Russia 11 Mt.

Industry Developments

Christmas Island: Phosphate Resources Limited produced 604 569 tonnes of phosphate rock and 62 410 tonnes of phosphate dust in 2011. Figures from the previous year are not available but in 2009 the company produced 420 205 tonnes of phosphate rock and 42 300 tonnes of phosphate dust. Current resources are expected to last another five years but the company is actively exploring and seeking additional land for mining. In 2012, Phosphate Resources applied to the Commonwealth for the resumption of the land it gave up for the proposed, but now withdrawn, Asia Pacific Space Centre.

Phosphate Hill (Qld): Incitec Pivot Limited, a publically listed company on the Australian Stock Exchange, does not to publish resource figures. The last publically available JORC compliant resource for Phosphate Hill dates from BHP Billiton's Annual Report 2006 and quotes a Proven Reserve of 29 Mt at 24.6% P2O5 and a Probable Reserve of 52 Mt at 24.3% P2O5.

Incitec Pivot continues to work the Phosphate Hill deposit, mining some 2.49 Mt in 2011. The phosphate rock feeds into the Phosphate Hill fertiliser plant, the company's largest, which has a current (reduced) annual capacity of 900 000 tonnes. The plant's capacity is reduced owing to production problems at the company's Mt Isa sulphuric acid plant. The sulphuric acid is used at Phosphate Hill, along with ammonia, to produce ammonium phosphates. Incitec Pivot also produces superphosphates at its Geelong and Portland plants.

Corella Bore (Qld): Krucible Metals Limited is developing its Korella phosphate and rare earths (yttrium) project at the Corella Bore prospect immediately south of Phosphate Hill. The yttrium at the Korella deposit is contained in the phosphate mineral xenotime (YPO4). In June 2012, the company received an Environmental Authority for level 1 mining activity on the lease. In August 2012, Krucible Metals was granted the Korella Phosphate Mining Lease for a quarry-style trial mining operation of the phosphate ore. The company will now progress to a feasibility study and bulk sample preparation. Also in August 2012, Krucible Metals signed a Heads of Agreement with Getax International, a Singaporean company, with a view to forming a Joint Venture for mining and trading the phosphate from the Korella project. Current resources at the Korella prospect are reported as an Inferred Resource of 8.3 Mt at 27.3% P2O5 and 13.72 Mt at 0.70 kg/t Y2O3.

Paradise South and Paradise North (Qld): The Paradise North and Paradise South deposits (formerly known as Lady Jane and Lady Annie, respectively) are located some 70 km north of Mount Isa and owned by Paradise Phosphate Limited, a wholly owned subsidiary of US company Legend International Holding Inc. The company's primary aim is to develop the Paradise North prospect for mining and producing phosphate for direct shipping ore (DSO). The project has an Indicated Resource of 3.3 Mt at 28.4% P2O5 and an Inferred Resource of 4.0 Mt at 27.9% P2O5. A mining lease was granted in April 2011 for the production of up to 1 Mt per annum of phosphate rock.

In addition, the company received approval in July 2012 for its Environmental Impact Statement from the Department of Environment and Heritage Protection for an open-cut mining operation at Paradise South. The mine is expected to produce up to 7 Mt per annum of phosphate rock over 20 years. Paradise South has a Proven and Probable Reserve of 198.6 Mt at 12.7% P2O5, which will be beneficiated on site to a saleable product of 52.7 Mt at 32.1% P2O5.

The company has also proposed a fertiliser plant at Mount Isa and has engaged specialist consultants to prepare detailed plans and environmental studies.

The proposed Initial Public Offering (IPO) of Paradise Phosphate Limited on the Australian Stock Exchange was withdrawn by parent company Legend International Holdings Inc in October 2012. Legend International Holdings cited the reason that advanced negotiations with a strategic partner were nearing fruition and that it was better to achieve this goal prior to an IPO.

Highland Plains (QLD, NT): The Queensland portion of the Highland Plains phosphate deposit is owned by Legend International Holdings Inc and was included in the withdrawn float of Paradise Phosphate on the Australian Stock Exchange. To date, there has been no further drilling at this part of the prospect and resources remain at a historical, non-JORC estimation of 84 Mt at 13.4% P2O5.

The Northern Territory portion of the Highland Plains phosphate deposit is owned by Phosphate Australia Limited. In 2009, the company released a maiden Inferred Resource of 56 Mt at 16% P2O5. In 2011 and 2012, the company has been investigating the potential for beneficiating the resource through froth flotation to a grade of around 34% P2O5 and transporting the slurry by pipeline to a barging facility in the Gulf of Carpentaria. The company also owns the geologically along-strike Alexandria, Alroy and Buchanan Dam prospects (some 130-170 km distant from Highland Plains) from which historical phosphate occurrences have been recorded.

Wonarah (NT): Minemakers Limited released an updated resource estimate for the Wonarah phosphate deposit in October 2012 as part of a feasibility study. The company claims it is Australia's largest undeveloped rock phosphate project. It has a Measured and Indicated Resource of 300 Mt at 18.3% P2O5 and an Inferred Resource of 542 Mt at 18% P2O5. Earlier, in June 2012, a non-binding Memorandum of Understanding (MoU) that the company had entered into with the National Mineral Development Corporation Limited, one of India's largest mining companies, expired. The company is now seeking other partners to bring the project to fruition.

Nolans Bore (NT): Arafura Resources Limited announced a 52% increase to the tonnage of its mineral resources at Nolans Bore in March 2012 and slightly improved it again in June 2012 to the current total resource estimate of 47 Mt at 2.6% REO, 11% P2O5 and 0.41 lb/t U3O8. In December 2012, the company defined its JORC compliant Probable Reserve as being 24 Mt at 2.8% REO, 12% P2O5 and 0.45 lb/t U3O8.

The company is projecting a mine life of 22 years based on open pit mining methods and beneficiation. It plans to transport the mineral concentrate to its proposed Rare Earths Processing Complex which will be located in Whyalla, South Australia. There, it will separate the concentrate into two streams – one for rare earths and one for phosphate. Final products will comprise rare earth oxides, a solid phosphate product, gypsum and uranium oxide.

Other activities during 2011 and 2012 have included fundraising and deal making with a number of international companies. Arafura Resources is now working towards a final feasibility study.

Ammaroo/Barrow Creek (NT): In December 2011, Rum Jungle Resources Ltd released a resource upgrade for the Barrow Creek 1 prospect at its Ammaroo Phosphate Project in the Northern Territory. The deposit has an Indicated Resource of 13 Mt at 16.4% P2O5 and an Inferred Resource of 240 Mt at 15% P2O5. Work in 2012 has included further extensive drilling at both the Barrow Creek 1 and Ammaroo deposits, as well as bench-scale metallurgical testing for beneficiation. The company plans to mine the high-grade portion of the Barrow Creek 1 deposit for direct shipping and is currently bulk-sample testing for this. The lower grade portion of the Barrow Creek 1 deposit will be beneficiated through screening, desliming (removing clay particles) and flotation.

Arganara (NT): In 2011, NuPower Resources Limited announced the results of a rock chip sampling program that returned results up to 37.6% P2O5 and began a RC drilling campaign in September 2011. In August 2012, the company released a maiden Inferred Resource of 310 Mt at 15% P2O5 (10% cutoff) and 15 ppm U. The estimates were based on XRF assays from 387 RC drill holes for 14 480 m of drilling. The company's current activities at Arganara are infill drilling targeting a DSO resource (>30% P2O5). At Lucy Creek, the company has also completed a soil sampling program in 2012 following a 2009 drilling campaign and has plans for further geochemical (soil survey) work at the Warrabri phosphate project in 2012/13.

Geolsec (NT): There have been no updates by Korab Resources Limited regarding their plans to commence development of a phosphate deposit located at GeolSec near Rum Jungle, 65 km south of Darwin. To date, subject to receiving all the necessary approvals, the company still 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.

Mount Weld (WA): Mount Weld is one of the world's richest deposits of rare earth elementsand continues to be developed by Lynas Corporation Limited. The deposit also contains a significant phosphate resource and, in March 2011, Lynas entered into an agreement with Forge Resources Limited to sublease designated areas of the orebody for the exploitation of niobium oxide at the Crown deposit and phosphate at the Swan deposit. The Swan deposit has an Indicated and Inferred Resource of 77 Mt at 13.5% P2O5. However, in May 2011, the agreement was terminated by Lynas, citing shareholders' wishes that it focus its energy on the rare earths project.

Balla Balla (WA): The Balla Balla deposit is primarily a vanadium-titanium-magnetite project but also contains a phosphate resource of 89.7 Mt at 3.74% P2O5. During 2012, the Balla Balla project was purchased by Forge Resources from Atlas Iron limited with the view to developing the V-Ti-Fe project. The company has no current plans to exploit the phosphate resource but will be stockpiling the gabbro-host as they access the underlying tintanomagnetite ore zone, with a view to the possibility of processing the phosphate-rich gabbro in the future.

Cummins Range (WA): In 2011, Kimberley Rare Earths Limited acquired 25% of the Cummins Range rare earth oxide-uranium-phosphate deposit, 130 km southwest of Halls Creek as part of a Joint Venture with Navigator Resources Limited. They completed a 77-hole RC drilling program for 4230 m but, in October 2012, they terminated the JV agreement and relinquished their interest in Cummins Range back to Navigator. In September 2012, Navigator Resources announced a 17% increase in the Inferred Resource for Cummins Range to 4.9 Mt at 11.2% P2O5, 145 ppm U3O8, 1.74% REO and 48 ppm Th. Navigator also completed a pit optimisation study and a conceptual mine schedule in order to develop a Preliminary Evaluation Study.