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Potash\u2019s long-term prospects remain bright due to the lack of arable land and a growing population
\nSouth Harz Potash\u2019s chief operating officer Lawrence Berthelet has 35 years\u2019 experience with potash projects
\nBerthelet helped develop Mosaic\u2019s K3 potash mine and ran mining operations for EuroChem
\nHis expertise will help ensure Ohmgebirge is \u201cfit for duty\u201d<\/p>\n
\u00a0<\/em><\/strong><\/p>\n Special Report:<\/em> Despite challenges in recent years, long-term prospects for the premium fertiliser potash remain strong and new projects will likely have little difficulty moving their product.<\/strong><\/p>\n This is the opinion of South Harz Potash\u2019s (ASX:SHP)<\/strong><\/a> chief operating officer Lawrence Berthelet, a highly credentialled chemical engineer who has 35 years of experience in the potash industry.<\/p>\n Speaking to Stockhead<\/em>, he touched on the beginning of his long career when he started as a process engineer looking after underground potash mines in Saskatchewan before moving into the engineering, procurement, construction, and management business \u2013 running global engineering and construction firm SNC-Lavalin\u2019s potash office.<\/p>\n \u201cI was the vice president for potash looking after all of SNC-Lavalin\u2019s potash projects such as Jansen and Woodsmith,\u201d he said.<\/p>\n \u201cAfter that, I went and worked on a big project \u2013 the US$2.9bn K3 potash mine construction \u2013 as Mosaic\u2019s vice president for capital projects in North America.<\/p>\n \u201cThat was two shafts, 1,100m deep with a couple of overland conveyors, both of them about 11km long, two head frames and two hoists \u2013 a big mine project.\u201d<\/p>\n K3 and the earlier K1 and K2 mines form the world\u2019s largest potash mining complex, and understandably is one of Berthelet\u2019s proudest achievements.<\/p>\n \u201cYou read about how so many of these megaprojects come in over budget, we did not. I was on the K3 project for 4-5 years and we brought that project in under budget and a year ahead,\u201d he said.<\/p>\n In fact, the project was so far under budget that some of the funds earmarked for K3 were used instead for brownfield expansion work such as the expansions of the K2 mill to increase throughput.<\/p>\n \u00a0<\/p>\n \u201cAfter that I went to work for EuroChem in Moscow, Russia, in an operations role where I looked after two potash mines and a couple of open pit phosphate mines,\u201d he said.<\/p>\n While his team handled smaller projects for execution such as small expansions and fixes, Berthelet himself also investigated M&A opportunities such as the purchase of Yara\u2019s Salitre phosphate mine in Brazil.<\/p>\n Incidentally, one of the projects that crossed his desk happened to be the South Harz project.<\/p>\n \u201cWe were really intrigued with the perpetual licences and the orebody is well known but I think at that stage of development, we probably weren\u2019t ready to get involved.\u201d<\/p>\n Berthelet then left EuroChem following Russia\u2019s invasion of Ukraine and was subsequently recruited by SHP.<\/p>\n \u00a0<\/p>\n Berthelet\u2019s long experience allows him to provide valuable insights for the potash sector.<\/p>\n While Canada is the world\u2019s largest potash producer by a significant margin, producing more than the next three producers \u2013 China, Russia and Belarus \u2013 combined, it is the number three (Russia) and four (Belarus) that had traditionally supplied the fertiliser to European markets.<\/p>\n That was until Russia invaded Ukraine \u2013 with some limited support from Belarus, leading the European Union to place sanctions on the two countries which included their potash exports.<\/p>\n \u201cThe Belarusians are probably affected the worse as they are having a harder time exporting product as they can\u2019t export through Poland and Lithuania. They are coming back but a lot smaller in tonnage,\u201d Berthelet said.<\/p>\n \u201cRussia in contrast can export potash to India, China and Brazil because those \u00a0markets remain open to them.\u201d<\/p>\n Oddly, while prices increased following the outbreak of war, they subsequently fell with Berthelet expressing his belief that farm operators had chosen not to apply product for a year and catch up later.<\/p>\n \u201cThat really brought the price down and market intelligence is predicting that the dip will last a little bit longer,\u201d he said. \u201cBut I think we have hit the bottom and things are slowly working their way back in terms of demand.\u201d<\/p>\n He said that the long-term outlook for potash (and fertilisers in general) remains positive due to two real factors.<\/p>\n \u201cFirstly, there is no more arable land, in fact, there\u2019s less arable land and secondly, the population is not decreasing. If anything, it is holding or growing,\u201d he said.<\/p>\n \u201cTherefore, every acre of arable land needs to have its production maximised and potash along with other fertilisers such as nitrogen and phosphate help to achieve this goal.\u201d<\/p>\n Potash stands out from other fertilisers as it ensures proper maturation in a plant by\u00a0improving overall health, root strength, disease resistance, and yield rates.<\/p>\n Berthelet added that it is especially valuable for crops such as pulses and corn, which use significant amounts of potassium while growing.<\/p>\n \u00a0<\/p>\n Berthelet also shared why he decided to join SHP, saying that its namesake project is a no brainer.<\/p>\n \u201cIt is basically an extension of an existing mine. It was an orebody that was going to be mined next, before the mine was shut down for a variety of reasons following the German reunification,\u201d he said.<\/p>\n \u201cBut the orebody is still as viable as it was then, and now with higher prices and better mining and processing techniques, it is even more viable.\u201d<\/p>\n He added that Ohmgebirge, which has a resource of 325Mt grading 13.14% K2O covering the entire mining licence, is pretty much the tip of the South Harz iceberg that has a global resource of 5.3 billion tonnes at 10.8% K2O of inferred resources and 290 million tonnes at 13.5% K2O, 89% in the indicated resource category.<\/p>\n \u00a0<\/p>\n\n The Ohmgebirge licence. Pic: Supplied (SHP).<\/em><\/p>\n \u201cOhmgebirge just happens to be the closest to existing orebodies, so it makes the most sense to develop first.\u201d<\/p>\n He added that with supply security being so high up in the decision-making process, buyers in the EU would be more comfortable buying from a project in the EU than they would be from somewhere out of the EU.<\/p>\n South Harz will also benefit from having a state-of-the-art facility with brand new equipment, a substantial advantage given that most existing potash mines have ageing facilities.<\/p>\n \u201cWe will use the most modern techniques and technologies such as modern computer maintenance systems, which allows us to maximise the efficiency of the equipment and avoid installing redundant equipment,\u201d Berthelet said.<\/p>\n \u201cThis makes for a smaller footprint, smaller plant, and it is cheaper too. It is also more efficient and runs better.\u201d<\/p>\n South Harz will also benefit from lower freight costs as well as competitive opex.<\/p>\n Berthelet will also leverage his expertise from developing K3 and running operations at EuroChem to support development of Ohmgebirge and South Harz.<\/p>\n He expects this experience to help provide a \u201cft for duty product\u201d that will deliver the stated tonnage safely and efficiently.<\/p>\n \u201cGood engineering does two things. First of all, it gives you the confidence to be able to stand behind your numbers,\u201d he added.<\/p>\n \u201cIt also gives you the ability \u2013 especially in our case because we are doing a lot of good, detailed engineering, especially in the mine \u2013 to fast track the next stage once the financing becomes available, enabling you to make your predicted schedules.\u201d<\/p>\n \u00a0<\/p>\n This article was developed in collaboration with South Harz Potash, a Stockhead advertiser at the time of publishing. <\/em><\/p>\n This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.<\/em><\/p>\n <\/span><\/p>\n The post Right place, right time: South Harz is on a path to benefit from potash\u2019s bright future<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"Operations role and moving to South Harz<\/strong><\/h2>\n
Geopolitics impacting on potash<\/strong><\/h2>\n
South Harz a \u201cno brainer\u201d<\/strong><\/h2>\n