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POTASH PRODUCTION NEWS Thailand Plans Exports by 2008

THAILAND Asia, the world's biggest consumer of fertilizer products, may be able to supply itself with high qualit...



THAILAND Asia, the world’s biggest consumer of fertilizer products, may be able to supply itself with high quality fertilizer as early as 2008, according to presentations at the Asian Fertlizer Conference held in Bangkok in mid-March.

With two large-scale potash deposits located in northeast Thailand and more exploration being conducted, Thailand is positioned to export up to 3.0 million tonnes of quality fertilizer annually to its neighbours at very competitive prices and heavily discounted freight charges in comparison with its competitors.

ASIA PACIFIC POTASH CORP. (APPC) is expecting final approvals for its Udon potash project, located 50 km from the Laos border, to be granted by September this year and site preparations to begin by March 2005. The first product shipment is scheduled for 2008. The Udon South potash project will deliver 1.0 million tonnes/year initially, with predictions that this could double very quickly. It has a current mine life of 22 years with a further 25 years indicated at the Udon North deposit.

The ASEAN project, owned by the Thai government within a consortium of Asian government partners, will deliver 1.0 million tonnes/year to ASEAN nations within the next six years. It has a current mine life of 20 years.

Late last year the Udon potash project was buoyed by interest shown by the Chinese state-owned ENTERPRISE INVESTMENT CORP. APPC signed a memorandum of understanding with Enterprise Investment Corp. to facilitate access to the Chinese market and, if required, Chinese debt and equity funding. This was one of the biggest Thai-Sino deals ever signed.

The agreement includes a provision for raising US$300 million to finance the development and also to secure long-term off-take commitments for the supply of high-grade potash to the agricultural markets of China, the Thai domestic market and across Asia.

Furthermore, China’s interest in Thai potash is expanding further than holding tertiary relationships with miners and the government. MINGDA, the Chinese government agency charged with exploration, has discussed with the Thai government the possibility of taking a primary role in Thailand’s mining exploration process and obtaining an exploration concession over an area in the Khorat Basin in northeast Thailand.

Other Chinese interest in Thailand’s potash resources is being shown by geologists from the Yunnan Province who have intersected sylvinite in a number of the 15 bore holes drilled in the 2,000-km concession.

The Udon potash project is particularly significant to the Asia region because it is considered very high-grade by world standards. Furthermore, at a depth of only 250-300 metres, the Udon South deposit becomes the most accessible evaporite deposit in the world.

(Yolanda Torrisi is a mining journalist in Australia.)