Sulfate of potash (SOP) is the most commonly used non-chloride potash fertilizer in the world, with an annual worldwide demand of 6 million short tons per year. It can be sold as a powder for use in compound fertilizers (containing nitrogen, phosphate, potassium, and sulfate), as a granular product (for direct application), or as a soluble product (for use in fertigation). SOP is priced at a premium to muriate of potash (MOP), and is utilized for sensitive, high-value crops including many fruits, vegetables, tobacco and tree crops, such as nuts.
MOP, which occurs naturally as sylvite or is extracted from sylvinite, contains chloride in its chemical structure and is reserved for crops that are not sensitive to chloride, such as cereals or oilseeds. Currently, the major potassium fertilizer market is MOP. SOP is a growing, value-added niche market. SOP is not a naturally occurring mineral, so unlike MOP is not mined directly. Instead, SOP is produced through one of two methods: primary or secondary.
IC Potash Corp. will be a primary producer of SOP. The global SOP market is highly profitable for primary producers, and ICP intends to be the lowest-cost primary producer of SOP in the world.
Primary SOP production requires extracting potassium and sulfate ions from naturally occurring complex ores or brines. Processing of natural brines is a relatively low-cost option, but is limited because of the small number of salt lakes in the world that contain both potassium and sulfate. There are brine operations in Utah (Great Salt Lake Minerals Corporation, owned by Compass Minerals International), Chile (Salar de Atacama, owned by SQM), and China (with the largest producer being SDIC Xinjiang Luobupo Potash). The average cost of production for salt lakes is approximately US$200+ per tonne.
Secondary SOP production requires the chemical conversion of MOP. The most common secondary-production process, producing 60% of the world supply of SOP, is the Mannheim process, whereby sulfuric acid is combined with MOP. This process requires energy and labor. The largest producer is Tessenderlo Chemie NV of Belgium, with a capacity for approximately 750,000 tonnes per year. This is a high-cost process, averaging US$500 per tonne. K+S Kali GmbH of Germany converts MOP to SOP using various sulfate salts, at a production cost of approximately US$400 per tonne or higher.
At ICP’s Ochoa mine and mill, the ore mined will be polyhalite, a mineral containing potassium, sulfate, magnesium, and calcium. Processing polyhalite into SOP was pilot-tested by the U.S. Bureau of Mines (USBM) from the 1920s to the 1940s, and by Potash Corporation of America (PCA) in the 1950s. The process has been reconfirmed by ICP in recent tests. The estimated cost of SOP production is projected to be US$214 per tonne.
The demand for SOP is growing worldwide. Chloride-free fertilizers are manufactured and exported from Norway, Belgium, and Finland. Europe, Spain, Italy, and other Mediterranean countries dominate the SOP market. In China, SOP demand has increased from 0.5 million tonnes during the first decade of the twenty-first century, to upwards of 1.5 million tonnes in the beginning of the second. Chinese demand is equal to supply because China is highly deficient in other potash sources and uses SOP as a direct MOP substitute. In the rest of the world, SOP is a special value-added product used for chloride-sensitive crops. SOP is also used in salty soils because it has a low salinity index, which makes it a water-sparing fertilizer.