Major miner BHP Billiton is spruiking the importance of potash in the company’s future, labelling it a possible “fifth pillar” in its diversified portfolio.
Addressing shareholders at the company’s AGM in Perth on Thursday BHP chief executive Andrew Mackenzie said the company expects global demand for the fertiliser ingredient to increase between two and three per cent each year until 2030.
“The growth will be driven by a rising population and greater economic prosperity, which will change the patterns of food consumption, requiring higher yields from increasingly constrained arable land," he said.
"Our continued investment in potash, at an average annual spend of $800-million, will make sure we are ready to take advantage of this opportunity to add to shareholder returns.”
Currently the company has “four pillars” comprising iron ore, coal, copper and petroleum.
BHP holds exploration rights over 14,500 square kilometres in Canada’s Saskatchewan potash basin.
Its Jansen project in the region is in a feasibility study stage, and has an expected output of 8 million tonnes a year over a 70 year mine life.
Mackenzie said Jansen could be the beginning of a “basin-wide play”.
''On its own Jansen is probably not a big enough resource for us to be a business that would rival our other four pillars, we need several Jansens,'' he said.
Addressing a resources industry event in Canberra earlier this year, Anglo American boss Mark Cutifani claimed Australia wouldn’t have an agriculture sector without mining.
“To put it frankly, the Australian country would not have an agricultural sector without the products of mining,” he said.
At first thought such a statement seems counter-intuitive as mining in many cases takes up otherwise vital agricultural land parcels and is often billed as jeopardising Australia’s – and the world’s – food bowl.
Putting aside competition for land use, mining has had another profound impact on agriculture; a majority of modern day farming methods, including growing efficiencies and machinery advancements, have all emerged out of the mining sector.
The use of phosphate rock as a fertiliser has significantly boosted crop yields in the past 50 years but according to research conducted by the University of Technology Sydney (UTS) with increasing consumption rates global supplies of phosphate could peak in as little as 20 years.
“Without phosphorous, animals can’t be fed, food can’t be produced and life on earth can’t survive,” the university stated.
UTS researcher Dana Cordell said Australia is the fifth largest phosphate fertiliser consumer in the world.
“While we have naturally phosphorus-deficient soils, the food we grow and export is phosphorus-intensive and feeds about 60 to 70 million people, mostly in the Asia Pacific region,” she said.
“What that means is we need a lot of phosphorus. Even if we recycle 100 per cent of it, it would nowhere near meet our demand.
“We might need to rethink the profiles of our agriculture and export industries in the future, which is not an easy thing to do.”