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The World Of Phosphate
Phosphate is growing as a commodity because of itsuse in batteries and fertilizer. The phosphate market is expected to witness a compound annualgrowth rate of 5% between 2022 and 2028 primarily because of these twoindustries.
Electric vehicles (EVs) have long banked on lithium-ionbatteries composed of nickel, cobalt and manganese, but in recentyears, North American and European carmakers are following China’slead and developing lithiumiron phosphate (LFP) batteries. LFP batteries are safer, costless than alternatives and last longer. Phosphate is a betteralternative to nickel and cobalt needed for lithium-ion batteries, andas EVs evolve, phosphate demand is projected to grow.
Also pushing LFP growthis its use in energy storage. Within the next five years, LFP use inenergy storage will outpace its use in EVs resulting in further demandgrowth for phosphate.
Phosphate is also an essential component of fertilizers and isused in various food and industrial products. Commercialfertilizers are composed of nitrogen, phosphate and potassium(NPK) — the Big 3 — which play a key role in plant nutrition.
The global population is expected toexceed 9 billion by 2050 so fertilizer will be increasingly needed toboost crop production. As the agriculture sector increases globally tomeet demand, the need for phosphate will also increase.
WhyPhosphate Could Remain A Major Player
Despite LFPs becoming the leading batterychemistry for EVs, EV technology is developing rapidly, and there isalways the chance that predictions can be wrong and other chemistrieslike sodium-ion surpass LFPs. But fertilizers are a much more stable industry and theBig 3 components of fertilizers are far less likely to change.
This is important torecognize because fertilizer production accounts for 85% of phosphateuse. Phosphate is a commodity that is projected to grow in demandregardless of the EV market. The phosphate demand curve would lookdifferent without batteries, but fertilizers use most phosphateanyway. The reality is phosphate isn’t going anywhere soon.
European and NorthAmerican companies primarily rely on North African, Middle Eastern,Russian and Chinese suppliers. The West is waking up to the realitythat its phosphate supply is dependent on regions that aregeopolitically unstable or that it has rocky relationships with.
For example, theRussia-Ukraine war has caused major disruptions in the agriculturalindustry — specifically, fertilizer production. Russia and Ukraineaccount for a substantial portion of the global fertilizer trade. Russiaproduces 9% of the world’s nitrogen fertilizer, 10% ofphosphate fertilizer and 20% of potash fertilizer. The war hasdisrupted exports and increased the price of fertilizer andagricultural commodities related to fertilizer such as phosphate.
Chinaannounced in July that it would extend its export restrictionson phosphate fertilizer through the end of 2022.
InSeptember, the U.S. Department of Agriculture announced itwill invest $500 million to increase domestic fertilizer production— double the amount of its previous commitment to curb reliance onRussian and Chinese fertilizer. It is increasingly clear that it wouldbe advantageous to have a significant phosphate supplier in a countrywith stronger and more stable ties to the West.
Companies like Arianne Phosphate Inc. (TSX-V: DAN) (OTCMKTS: DRRSF), apromising phosphate mining company, are among the few in North Americathat can respond to the growing demand for phosphate. The company’sLac à Paul project in Quebec, Canada, is a response to a growingglobal demand for phosphate for fertilizer, which is increasing 2% to 3% eachyear.
European and NorthAmerican markets might be more inclined to rely on a Canada-basedmining company than a Russia- or China-based company.
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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