CRU: ICL Bets on Polyhalite as UK Potash Production Finally Ends

Potash Analyst Humphrey Knight and Fertilizer Demand Analyst Rajiv Ram were invited to visit the Boulby site ahead of the most radical restructuring in the mine's nearly 50-year history.

Potassium chloride and polyhalite at ICL

Potassium chloride (MOP) is the world's most popular potash fertilizer with global sales totalling about 66 Mt in 2017. ICL is the world's sixth largest MOP producer, with 2017 deliveries exceeding 5 Mt from its operations in Israel, Spain and at Boulby. Polyhalite is a hydrated potassium, magnesium, calcium sulphate mineral (marketed by ICL as PolysulphateTM) with total global deliveries currently orders of magnitude lower at about 0.3 Mt/y. It is most similar to other potassium magnesium sulphate (SOPM) fertilizers such as langbeinite and schöenite.

ICL's UK subsidiary, also known as Cleveland Potash, is currently the world's only polyhalite producer. The company began marketing the mineral as a fertilizer under the brand name PolysulphateTM in 2012 from the Boulby site. To date it has witnessed impressive sales growth of around 50% per year. Nevertheless, the move to dedicated polyhalite production represents significant challenges as ICL bets on increasing PolysulphateTM production to 1 Mt/y by 2020 (with an option of increasing this to 3 Mt/y by 2030) returning the ageing mine to profitability.

With the switch to sole polyhalite production scheduled for July this year, ICL undertook its first PolysulphateTM analyst and media site visit. It provided the perfect opportunity for Potash Analyst, Humphrey Knight, and Fertilizer Demand Analyst, Rajiv Ram, to see what has already changed at Boulby and what challenges remain as the mine undergoes the most radical restructuring in its nearly 50-year history.

Why is the Boulby mine switching to polyhalite?

The Boulby mine has extracted potassium chloride from sylvinite ore in the Zechstein Basin deposit since 1973. At its peak the site had an annual capacity of 1 Mt/y MOP. It is a conventional underground shaft mine which uses continuous mining methods at depths of 800 to 1,350m below surface.

Given the age of the mine, underground workings now exceed 80km in length and extend under the North Sea. Production sites or "districts" can be up to a 15km journey from the shafts. Resulting rising costs and lower MOP prices have resulted in potassium chloride production becoming uneconomical.

The main polyhalite layer underlies the sylvinite ore and was first mined as recently as Q4 2011 with a new access ramp constructed in 2008 from the overlying salt layer. Polyhalite production districts are therefore closer to the shaft (around 10km) and should reduce transportation times. ICL plans to shrink underground workings to around 25km lowering mining, transportation and geotechnical costs.

Read the full story: https://www.crugroup.com/knowledge-and-insights/insights/2018/icl-bets-on-polyhalite-as-uk-potash-production-finally-ends/ 

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SOURCE CRU