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Fertilizer iscurrently the biggest application of phosphate globally. Phosphateis a macronutrient in more than 85% of all fertilizers andgiven that phosphate demand for fertilizer is projected to continue,there are specialty applications of phosphate that may be worthlooking into for investors.
Consumers of products like food preservatives,detergents, animal feeds, and cosmetics are driving anincreased interest in phosphate. However, the real interestcould be in how phosphate can potentially revolutionize the world ofelectric vehicles (EVs).
For decades, companies — specifically North Americancompanies — placed their bets on lithium-ion batteries, which relyheavily on lithium, cobalt, and nickel. However, carmakers andengineers arenow turning away from nickel and cobalt-based lithium-ionbatteries in favor of lithium iron phosphate batteries (LFPs).The transition is largely occurring because cobalt and nickel are scarce,expensive, and controversial raw elements to mine.
According to a recent research report byWood Mackenzie Power & Renewables, lithium iron phosphate is oncourse to be the leadingbattery chemistry for EVs by 2028 , replacing their cobalt andnickel-based lithium-ion predecessor. LFPs are safer, less expensivethan alternatives and last longer. LFPs can also be recycled and usedin other energy storage systems after their lifecycle has ended withinan EV.
The P In LFP - Igneous v. Sedimentary Phosphate
When looking atspecialty applications of phosphate for things like LFPs, theextraction of phosphate becomes slightly more complicated. Globally,the phosphate supply isdominated by the Middle East and North Africa (MENA). China isalso a substantial exporter of phosphate fertilizers (MAP & DAP)and they abruptly withdrew from the market last year, now onlyproviding spot market sales. Lastly, Russia is a considerable producerof phosphate, and igneous at that, but the Russia-Ukraine war has madethe material unavailable to many Western jurisdictions.
When it comes tophosphate deposits there are two different types: sedimentary depositsand igneous deposits. Under 10% ofglobal phosphate is in igneous deposits . Igneous deposits arenot only better for the environment with fewer contaminants presentlike heavy metals or uranium but igneous deposits also have a bettergrade of ore and can be used in specialty applications like LFPs.
As demandcontinues to grow for specialty applications such as the LFP, a largerpercentage of phosphate application will need to come fromhigh-quality concentrates that can only be found in igneous deposits. Arianne Phosphate Inc. (TSX-V:DAN) (OTC:DRRSF) is onepotentially promising phosphate mining company that has access toigneous deposits and, can respond to the growing global demand forphosphate. Historically phosphate demand grows at 1.5%-2% a year foragricultural use and is expected to grow at a much faster rate nowthat the LFP has come into the equation.
Arianne Phosphate says its Lac à Paul projectin Quebec is a very rare project that is laying the groundwork forbecoming an invaluable supplier to North American and Europeancompanies. First, the deposit is igneous and can produce a phosphateconcentrate purer than most/all of the world’s phosphate, most ofwhich is housed in sedimentary rock. Second, the Canada-based companyadheres to stricter environmental, social and corporate standards,aligning with North American and European agendas.
The Lac à Paul projecthas access to world-class infrastructure and is fully permitted. TheLac à Paul project is also not owned by an integrated fertilizercompany which will allow for the mined phosphate to be used for avariety of different commercial agendas. Arianne Phosphate is enteringthe market at what could be a perfect time as American policymakersare eager to depart from over dependence on foreign suppliers.
The U.S. recentlyannounced that Canadian companies qualify under the 1950 Defense Production Act(DPA). This means that an investment in Canada by theDepartment of Defense will legally be the same as an investmentdomestically, opening a lot of doors for investment in Canada.President Biden’s administration shared that one of the leadingreasons to implement the DPA was to create a flourishing EV marketwith more control of the supply chain and to become moreself-sufficient.
If the US is lookingto control the supply chain in the EV market, having access to aphosphate producer will be essential as companies further expand intoLFP development and production. Arianne Phosphate seems to bewell-positioned to help fill the supply gap and be a major asset tothe EV market.
ARIANNE PHOSPHATE INC. ( www.arianne-inc.com )owns the Lac à Paul phosphate deposit in Quebec, Canada. Fullypermitted and shovel ready, the asset is among the world’s largestgreenfield deposits, capable of producing an environmentally friendlyphosphate concentrate. Due to the nature of its high-purity,low-contaminant product, Arianne’s phosphate can be used to producefertilizer as well as meeting the technical requirements of specialtyapplications such as the lithium-iron-phosphate (LFP) battery. The Lacà Paul deposit is rare due to its geographic location and geologicalstructure. Arianne Phosphate is listed on both the TSX-V: DAN and the OTCQX: DRRSF .
This post contains sponsoredadvertising content. This content is for informational purposes onlyand is not intended to be investing advice.
Thisinformation contains forward looking statements. All statements, otherthan statements of historical fact, included herein, including withoutlimitation, statements regarding potential mineralisation andreserves, exploration results and future plans and objectives ofArianne Phosphate Inc, are forward-looking statements that involvevarious risks and uncertainties. There can be no assurance that suchstatements will prove to be accurate and actual results and futureevents could differ materially from those anticipated in suchstatements. Important factors that could cause actual results todiffer materially from Arianne Phosphate Inc’s (“AriannePhosphate” or the “Company”) expectations are disclosed underthe heading "Risk Factors" and elsewhere in Arianne PhosphateInc’s documents filed from time-to-time with the TSX Venture andother regulatory authorities.
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