Centrex Metals (ASX:CXM) intends to significantly reduce Australia’s reliance on imported phosphate rock, one of the three major fertilisers that are critical to the production of food crops and pasture for livestock. Centrex’s Ardmore Phosphate Rock Project in North West Queensland, one of the few remaining undeveloped high-grade phosphate rock deposits in the world, is fast-approaching production stage on the back of strong local and international customer interest.
Each year, Australia and New Zealand import one million tonnes of phosphate rock mostly to produce Single Superphosphate. There is no substitute for phosphate fertiliser. Most of Australia and New Zealand’s phosphate comes from the world’s biggest exporter Morocco but several shipments have been delayed in recent times due to legal disputesover land rights between Morocco and the indigenous Saharawi people,which have spilled over to the European Union’s top court.
Centrex CEO Ben Hammond saidArdmore not only represents a potentially more stable supply but also a cleaner high quality product for both local and international customers.
“In June, we signed a deal to potentially export 40% of the planned 800,000 tonne phosphate rock annual production fromArdmore over its 10-year mine lifeto a major fertiliser manufacturer listed on the Indian stock exchange, Gujarat State Fertiliser & Chemicals (GSFC),” explained Mr. Hammond.
Under the terms of the MOU with GSFC, Centrex will provide product samples to GSFC’s selected technology providers for its new large-scale phosphoric acid plant for their trial and acceptance. Centrex and GFSC are in process of negotiating a binding heads of agreement (“HOA”) comprising the key terms of supply.
Centrex has also completed mining and crushing of two 400 tonne run-of-mine ore parcelsas part of paid trials for two customers in the local region.
“We have a significant freight advantage over imported phosphate,” added Mr Hammond.
“There is substantial local and global demand, not only for high grade phosphate,but for clean phosphate that is ultra-low in cadmium. Ardmore ticks both boxes very confidently,” Hammond says.
Cadmium is a toxic heavy metal that can be concentrated in crops and cause health problems. There is increasing pressure on fertiliser manufacturers to use low cadmium phosphate sources, to the extent that members of the European Parliament recently voted in favour of a resolution to immediately lower import limits to 60ppm, with further reductions over time to an eventual limit of 20ppm. Ardmore has a cadmium level of just 1ppm which makes it one of the lowest levels in the world.
Ben Hammond said that development of the project will be expedited due to the deposit’s natural advantages:
“The phosphorate rock deposit at Ardmore is near surface, flat lying, and doesn’t require blasting so mining will be via a cost-friendly open cut operation,” he says.
“The already high-grade and coarse nature of phosphate rock at Ardmore means that our very simple processing plant costs will be lower than many of our competitors that rely on complex processing plants to reach exportable grade levels.”
Centrex previously announced the very favourable results of a technical and economic study of the potential viability of an open pit mine and phosphate rock processing plant at the Ardmoresite outside Mount Isa. The Company is now due to complete a feasibility study for the project in August 2018.
CDE Global has recently been awarded the contract for Centrex’s start-up 70 tonnes per hour modular wet process plant due for commissioning in 2019 to provide the first shipments to customers. The modular plant is being designed to be upgradable to 140 tonnes per hour to reach Centrex’s planned full-scale production in 2021.