On March 22, four companies from China and Algeria in Africa signed an agreement worth US $7 billion in Algiers, the capital of Algeria, to jointly establish Algerian-China Fertilizer Company and develop the first phosphate integration project in Algeria. It is reported that the annual production capacity of the project will reach 5.4 million tons after it is put into operation, making it the second phosphate ore of Chinese enterprises overseas after Luoyang Molybdenum in Brazil.
Algeria is located in North Africa, rich in phosphate and oil and gas resources, and is an important production area of phosphate rock in the world. This phosphate integration project involves four provinces in eastern Algeria. It will build concentrators, acid plants, fertilizer plants, wharf loading and unloading and supporting infrastructure, etc., with an annual capacity of 5.4 million tons after being put into production.
It is reported that the Algerian shareholders account for 56% of the Algerian - Chinese fertilizer companies, including the Algerian Chemical Fertilizer and Plant Quarantine Products Industry Group (ASMIDAL) and the Algerian Mining Group (MANAL); Chinese shareholders accounted for 44% of the total, including China Wuhuan Engineering Co., Ltd. and Yunnan Tian'an Chemical Co., Ltd.
Phosphate rock is an important chemical mineral raw material. It can be used to produce phosphate fertilizer, yellow phosphorus, phosphoric acid, phosphide and other phosphates. It is widely used in agriculture, medicine, food, matches, dyes, sugar making, ceramics, national defense and other industrial sectors. Especially in agriculture, phosphate fertilizer is one of the three most important agricultural fertilizers, which has obvious yield increase effect on most crops. At present, about 80% of the world's phosphate ore is used to produce phosphate fertilizer after mining.
Phosphate ore is a non-renewable mineral resource, so its sustainable development and utilization is considered directly related to the world food security and human survival and development. Especially with the rapid growth of the world's population, the demand for food in various countries has increased, so that the demand for phosphate rock, one of the main fertilizer raw materials that must be relied on to expand food production, has also increased.
At the same time, lithium iron phosphate is one of the cathode materials of the mainstream technology route of power batteries. The rapid development of lithium iron phosphate and lithium hexafluorophosphate in the new energy sector will have a strong demand for phosphate rock in the future.
In order to ensure the national economic security, national defense security and the development needs of strategic emerging industries, phosphorus was listed as one of the first 24 strategic minerals in China. The successful signing of the project by Chinese enterprises in Afghanistan undoubtedly took a big step forward in building China's overseas base of strategic minerals.
From the perspective of reserves, the global phosphate ore distribution is seriously uneven. According to the USGS data of the United States Geological Survey, the global phosphate ore reserves in 2020 will be about 71 billion tons, of which Morocco and Western Sahara will have the highest reserves, accounting for about 70%. China's phosphate ore reserves will be the second, accounting for 5%. Egypt and Algeria will be the third and fourth, accounting for 4% and 3% respectively.
In terms of output, China is the largest phosphate rock producer in the world. In 2020, China ranked first in the world with 40% of the phosphate rock output, and Morocco and Western Sahara ranked second with 17% of the output.
Like rare earths, China began to strengthen government control over phosphate ore mining and export around 2008. In 2016, the supply-side reform began to intensively introduce policies to control the phenomenon of mining rich and abandoning poor and overcapacity, and gradually cleared backward capacity. In 2019, under the promotion of environmental protection policies, the "three phosphorus" remediation plan was further issued to speed up the elimination of enterprises with substandard pollution emissions in the industry.
Under the background of the implementation of phosphate ore mining restriction in China, many domestic enterprises began to turn their eyes to overseas.
Luoyang Molybdenum acquired Brazil's phosphorous niobium business with US $1.5 billion in 2016, and owns Chapad o deposit, Coqueiros deposit and Morro Preto deposit, which are mainly phosphorus ore resources; Boa Vista Mine, Mina I Niobium Mine, Mina II Niobium Mine and Leste Niobium Mine, which are dominated by niobium ore resources.
Phosphorus business is mainly in Chapad o mine, and Coqueiros and Morro Preto are two high-grade undeveloped deposits. Among them, Coqueiros deposit has high-quality ore body close to Chapad o mine. Morro Preto deposit has become one of the most promising projects in Brazil in recent years due to its huge resource potential and superior geographical location.
The phosphorus business of Luoyang Molybdenum basically covers the whole phosphorus industry chain. The mining method of phosphorus ore is open-pit mining. The main products include: high concentration phosphate fertilizer (MAP, GTSP), low concentration phosphate fertilizer (SSG, SSP powder, etc.), animal feed supplement (DCP), intermediate products phosphoric acid and sulfuric acid (sulfuric acid is mainly used for its own use) and related by-products (gypsum, fluorosilicic acid). Help Luoyang Molybdenum to become the second largest phosphate ore producer in Brazil. In 2021, Luoyang Molybdenum Industry will produce more than 1 million tons of phosphate fertilizer annually in Brazil, and the price of phosphate fertilizer will nearly double compared with the beginning of the year.
Combined with the supply and demand situation of the global phosphate rock industry, phosphate rock will maintain the supply and demand gap for a long time, go out, and ensure the supply security of domestic strategic resources, which will become a challenge and opportunity for the whole industry chain.