Rio Tinto has uncovered a massive potash deposit in Canada, right near BHP’s existing Jansen mega-mine.
In its latest strategic report, Rio Tinto highlighted its work on the KP405 deposit in Canada’s Saskatchewan region, at first stating that “drilling results indicate encouraging potash grade and thickness,” but then going onto to declare the project as a potential Tier One resource, putting it on the same level as Rio’s Simandou project in Guinea.
It highlighted the importance of potash to the miner’s future, stating that “higher nutritional standards, population growth and limited arable land make potash a critical factor in maintaining global food security, and a natural complement to RTM’s existing borate fertiliser business”.
The deposit is understood to have an inferred resource of 1.4 billion tonnes, with a grade of 31 per cent.
The news comes only months after BHP announced it was looking towards potash, labelling it the ‘fifth pillar’ in its portfolio.
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.
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, and total resources of 6.6 billion tonnes at a grade of 26 per cent.
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.
Anglo American’s Mark Cutifani has previously outlined the importance of mining potash to agriculture and food security, stating that the “Australian country would not have an agricultural sector without the products of mining”.
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.