It should be really exciting times for sulphate of potash (SoP) project developer Trigg Mining, which is working to bring onstream one of Australia’s largest deposits of SoP, a premium fertiliser product.
SoP is used for chloride-sensitive crops, including fruits, vegetables and tree nuts; most high-end food crops effectively demand its use, as the most environmentally friendly form of potassium-based fertiliser.
Trigg is tapping into potassium-rich brines formed by rainfall over millions of years, carried through palaeo-channels below what is now desert, that have formed under old salt lakes. SoP from natural brines is not only the most environmentally sensitive form of potassium fertiliser, it is also the most cost-effective.
The tailwinds behind the Australian companies working on brine-hosted SoP projects are only growing, in strength and number. First, Australia currently imports all of its SoP requirement, about 63,000 tonnes a year, and the nation’s food producers want a local supply. Second, all of that imported SoP is manufactured through a chemical process called the Mannheim process, in which muriate of potash (MoP), the dominant potassium-based fertiliser, is combined with sulphuric acid and heated to 800 degrees Celsius in a furnace, to create a manufactured version of SoP, potassium sulphate, in an energy- and emissions-intensive process that has a troublesome by-product of hydrochloric acid.
Third, there is currently a worldwide shortage of SoP – exacerbated by the fourth tailwind, which is that Russia is the world’s second-biggest producer of muriate of potash fertiliser and its ally Belarus is third-largest, with almost 40% of the market between them.
In the wake of Russia’s invasion of Ukraine, economic sanctions have been slapped on the pair. In addition, both Russia and China recently announced restrictions on fertiliser exports, which has worsened very tight market conditions. As a result, potash prices across all product types have surged.
On ESG grounds alone, a local source of SoP of the most environmentally friendly kind is an idea whose time has come. On cost grounds, it cannot come quickly enough for farmers and food producers.
It could hardly be a better backdrop for Trigg Mining, which is developing a multi-decade, tier-one SoP production hub based around the company’s flagship Lake Throssell asset in Western Australia, and the nearby Lake Yeo brine deposit. The Lake Throssell project has a current drainable mineral resource estimate of 14.4 million tonnes of SOP, plus a further exploration target for the project of 2.6 to 9.4 million tonnes running between 9.5 and 10 kilograms of potassium sulphate per cubic metre. This resource supports Trigg’s plans to produce an estimated 245,000 tonnes of SoP a year, using evaporationand a processing plant using proven technology.
Earlier this month, Trigg announced more good news, with gravity survey results that Trigg managing director Keren Paterson says “well and truly exceeded expectations,” indicating that at both Lakes, there is considerable potential to extend the resource. At Lake Throssell, the survey extended the interpreted palaeo-valley within the granted tenements – representing what Paterson describes as an “exceptional growth target” along strike of the existing resource, while at Lake Yeo, an 80-kilometre-long palaeo-valley was identified, that is up to 3.5 kilometres wide and 100 metres deep.
So – what could be the problem?
Trigg Mining is not alone in its ambitions for an Australian-based SoP operation: a mini-sector of the market is also working to develop similar projects in the state, including Salt Lake Potash (ASX: SO4), Kalium Lakes (ASX: KLL) and Agrimin (ASX: AMN). And investors cannot but notice that there have been problems among this group. Salt Lake Potash entered receivership in October after coming into financial difficulty in the wake of poor results from the project’s initial plant feed salt program, while Kalium Lakes has disappointed the market by twice pushing-back the date for commercial production and ramp-up of its Beyondie SoP project.
It is a strange situation for Paterson, who is diplomatic about her peers in the fledgling industry, but also determined to learn from any issues experienced by the others.
“We recognise that this is a difficult thing to do,” she says. “Producing the minerals you want from these brine sources is very complex. Trigg has always had the strategy of being the second-mover, and we’re feeling quite comfortable with that approach at the moment.”
There are “many challenges” in translating the planned process into the field, Paterson says. “It’s actually very agricultural. We pump brine out of the ground, but then it goes into evaporation ponds and they need to be managed in the open climate. This is not being done in a laboratory, it’s big, it’s at scale, and, it’s quite challenging to manage, in terms of making sure that you get the right salt minerals out at the end of that evaporation process to then go into the process plant. If you’ve got too much sodium chloride attached with that, for example, it’s not going to working in the process plant.”
Trigg’s thinking has always been that it has a “really long-life project that needs to be done right,” she says. “We weren’t interested in being the first into production. We’re trying to do it as thoroughly as we can, and make sure that we really understand how best to optimize the natural endowment that we have. We need a very deliberate approach to making sure that we reduce the risk of that process and understand what it is that it’s going to do, and how long it’s going take to do it, too.”
Such a rigorous approach “requires patient capital,” says Paterson. The next steps for Trigg are to drill-out the further upside potential at both Lake Throssell and Lake Yeo, to build on the strong base already established at the former; and to progress a pre-feasibility study (PFS).
Having raised $4 million through a renounceable rights issue and placement in January, Trigg is funded for these tasks. “We’re working towards the PFS now, and also doing all the groundwork to get back into the field for this field season. We need to do more work on our resource, and we’ve also got a lot of exploration to do.”
In the meantime, the positive drivers behind Australian SoP production only strengthen – but investors are still slightly wary. “All of the fundamentals of the market, all of the ESG considerations, all of the attributes of the end-product, simply could not be better for us,” says Paterson. “But undeniably, there are things that have worried the market lately. We wouldn’t say that we feel any heat from investors – but we would say we’re not feeling quite the love we’d expect to be feeling, given the circumstances,” laughs Paterson.
