It takes hundreds of millions of years and a complex series of geological processes to form an economically viable potash deposit.
With global potash demand growing and many producers operating at or near their capacity, the quest for new production is under way. There are, however, a number of natural obstacles that make expanding production, finding viable deposits or building new capacity daunting challenges.
The sources of supply are few, as the Earth’s geological evolution has provided only a limited number of large accessible deposits scattered across a small number of geographic regions. That is a product of the extraordinary circumstances necessary for the development of a potash ore body.
At their outset, these deposits started as large inland seas that were isolated from the world’s oceans many millions of years ago. As the water bodies began to evaporate, they deposited limestone, dolomite and rock salt. In some areas the remaining water, with its precious contents, flowed to low spots and, with further evaporation, left a thick layer of concentrated minerals that would become potassium salts.
These potassium salts, however, can be easily dissolved or separated into small, uneconomical deposits by contact with water. Only in regions where the salts were covered by a layer of clay, which provided protection through many tens of millions of years, did the deposits remain.
Even those buried treasures were not certain to become workable deposits. As the earth shifted, some beds developed fault lines or folded, moving different parts of the potash beds to varying levels, making them difficult and expensive to access and mine. In other areas, the hazardous gases or excessive temperatures found in the formations make the deposits uneconomical.
As a result, flat, thick, nutrient-rich potash deposits are rare – and a long-awaited gift of nature.
This document contains forward-looking statements which involve risks and uncertainties, including those referred to in the company’s annual report. A number of factors could cause actual developments to differ materially from those in the forward-looking statements, including, but not limited to, fluctuation in supply and demand of primary products and raw materials; changes in competitive pressures, including pricing pressures; changes in capital markets; changes in currency and exchange rates; unexpected geological or environmental conditions; and government policy changes.
