A vast potash deposit in Eritrea offers suitability for producing a premium potash fertilizer, which commands high prices.
LONDON (MINEWEB) – At an investment conference like this week’s Mines & Money in London one can be besieged by junior miners/explorers all with good stories to tell. The fallout in the junior sector has already tended to do the sorting of the wheat from the chaff. But even so some will have seemingly better stories to tell than others – the problem for the dispassionate observer tends to be to rate those which might appear to stand out.
As is the nature of things these days there does tend to be a concentration on gold explorers/developers as gold has an aura which transcends reality. As my former colleague Chris Hinde at SNL is always keen to point out, in terms of global value of production coal, iron ore and copper all rank far higher than gold.
But what of other metals and minerals? There are those who favour nickel, zinc, uranium etc. as the next big thing in terms of price potential, but the history of mining suggests that perhaps the real profits in the industry are made in bulk materials where high volumes trump high values – so what of potash?
Go back a couple of years and it was potash which was rated to be the next big thing. The world needs food and growing it requires fertilisers where potash is king. But the projected growth has not really materialised and prices for potash – or at least for sylvinite (potassium chloride KCl plus sodium chloride NaCl), the principal mined potash product from major producers Canada and Russia – have been somewhat in the doldrums.
So how about a potash mine with good reserves, perhaps a billion tonnes, near the coast but in something of a pariah state as far as the United Nations is concerned? Doesn’t necessarily seem to tick the boxes because of potash price performance and jurisdiction. But… The pariah state is Eritrea which at least has a stable government and, for Africa, very low corruption levels.
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