➤ Australia could still become a globally significant producer of sulfate of potash (SOP) despite two local developers collapsing in recent years.

➤ SOP hopefuls need to collaborate to solve technical challenges and get production in Australia up and running.

➤ India and the Gulf nations are important future offtakers for Australian SOP.

Debbie Morrow, CEO and managing director of Agrimin Ltd. Source: Agrimin Ltd.

Agrimin Ltd. hopes to have both state and federal environmental approvals in place by mid-2025 for its Lake MacKay SOP project in Western Australia.

The global market for SOP — a fertilizer for chloride-intolerant crops such as fruits, vegetables and nuts — is about 7 million metric tons per year, CEO and Managing Director Debbie Morrow said.

Investors have been skeptical of Australia's SOP sector since Salt Lake Potash Ltd. and Kalium Lakes Ltd. were placed under voluntary administration amid cost blowouts after rushing into production. However, Morrow believes that Australia could account for a large chunk of global SOP production if producers Down Under collaborate.

S&P Global Commodity Insights discussed with Morrow Australia's SOP potential and Agrimin's own plans. This interview has been edited for clarity and space.

S&P Global Commodity Insights: Agrimin is finally taking an investment decision on Lake MacKay, 15 years after its maiden resource was declared and despite the many problems the local SOP sector faces. What gives you this confidence?

Debbie Morrow: Agrimin sat in the background during that time and did our disciplined engineering, and now we know what went wrong and why SOP can absolutely work in Western Australia.

SOP production globally essentially has the same flow sheet in that they all float the mineral compound schoenite, which is how you then progress to producing SOP. In Western Australia, when you're putting potassium salts from the evaporation ponds into the front end of the plant, … it converts back to another mineral called leonite, [which] doesn't float, which is why our early movers ran into problems.

Our engineering work has demonstrated that you need to convert leonite to schoenite in the first stage of the flow sheet by cooling it down to 15 degrees C due to Western Australia's hot climatic conditions. Then, when you float it, like every other operation around the world, producing SOP works.

With that problem solved, Lake Mackay alone … will account for 6% of global SOP supply, and Western Australia's projects combined could take up to 15%. Even the smaller assets will be developed in time because technology will improve, and we'll learn how to do things at a more cost-effective manner with more automation.

What have you done differently since joining Agrimin?

External collaboration with our peers. In my view, there is no competition between us. The world needs SOP, and Western Australia has a lot of it to offer.

The only competition is to prove [SOP production] works here. The period of the early movers had fierce competition, a lot of media and a lot of hype. It was basically a fight to be first.

A collective and collaborative approach, particularly on the technical side, is highly beneficial. So we have been collaborating across our peers in Western Australia, and leveraging lessons from successful operations around the world.

Our largest shareholder, BCI Minerals Ltd., is developing its own salt and potash project in Western Australia.

In projects, as in life, you learn the most when things don't go to plan. That is why I've also started engaging with German group K-UTEC AG Salt Technologies, which was the design and construction group for Kalium Lakes. K-UTEC has done significant post-investment reviews to learn from Kalium Lakes and is committed to supporting SOP success in Western Australia.

What is your offtake situation?

We have 70% of our offtake signed in binding agreements, [and] 30% of that is to China. The rest goes to Europe and South America. We chased those opportunities a few years ago … having started that process in 2019.

Back when we were negotiating these offtakes, broader Asia, India and the Middle East markets were less mature. Now potash is a critical mineral in India, and many of the Gulf nations have food security as a strategic priority.

The supply chain out of China is not guaranteed anymore because their own internal consumption is increasing whereas production is stagnant or decreasing, so they're not exporting as much as they used to. In fact, this year, China stopped exporting over-10-kg bags of SOP to anyone as they need it for their internal consumption.

All our existing offtakers want to extend those agreements because there's more demand than supply around the world at the moment.

In November, I'm also doing a three-week roadshow around the Gulf states, where for countries like Saudi Arabia and the United Arab Emirates, food security is in their near-term top strategic priorities.

When will you finally get into production?

Best case scenario, it will be 2030 before commercial production.

We expect state environmental approval this year and the federal one in the first half of 2025. Then we need to source a strategic partner and get the funding package together.

We're producing our brine with a trenching system on the lake and solar evaporation ponds. We've got two years of baseline monitoring … to meet the environmental conditions before we can start construction. So the construction of the plant is in some ways the easiest bit.

We're also building a 350-kilometer haul road out to the existing Tanami Road to head north to the Port of Wyndham.

All that, however, is assuming that by early 2026, we're on the ground. Best case is that by then, we're out doing heritage surveys, getting the camp set up, and preparing to start the trenching. Then it takes four years to get to production.