IPP&T Magazine Online

Miner poised for emerging Southeast Asia potash market

April 23, 2018  

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It might be the smartest mining opportunity in 2018. It’s not coal, oil, copper. Nor is it silver, gold or platinum.

And one little-known miner called Vatic Ventures with a simple business strategy is sitting on a potential find that could make a real difference in Asia.

Their strategy? Scour the globe with the latest technology for a commodity that is needed right where the commodity is found. In fact, they are hoping to be sitting on one of the largest finds of its kind, in the perfect location.

• It has the infrastructure… electricity, water, roads and labour; and

• It has incredible local and regional demand from Southeast AsiaIndia and China.

The commodity? It’s critical to rice and other crop production, and it is located in a region experiencing tremendous growth. It’s a vital component in fertilizers, and it is crucial for increasing crop yields. Without it, the world’s population could go hungry.

The price of potash is hovering around $225 per ton and could well increase over the course of 2018. And as the world’s population continues to grow, demand for potash is set to rise higher and higher and higher.

That’s where Vatic Ventures Corp. comes in. Right now, the potash market is cornered by several major producers: Canada and Russia, where production and transportation costs are high, and reserves are dwindling. To meet future demand, potash miners are seeking out new deposits.

The UN projects the world’s population to rise 42 per cent to 10 billion people by 2050, and farmers are going to need a lot of potash to help grow enough food to fill all those stomachs. Potash demand is very likely to rise along with Vatic’s chances of success if it finds what it hopes to on its project.

The key to Vatic’s future is the location of its big discovery: Thailand.

Nearly all the world’s potash comes from a handful of exporters, all of them in RussiaEurope or North America. But the major import markets are in Asia, and one of the biggest markets is Southeast Asia. And that’s where Vatic comes in. According to the USGA, Global scarcity is not the issue with potash-transportation costs are.

Vatic has the solution: its potash exploration property is close to major markets.

ThailandVietnamMalaysia and Indonesia make up 75 per cent of all Asian potash imports, excluding China and India. It will also benefit from the support of the Thai government, which is directly investing in potash, and cheap labor costs.

Thailand currently imports 100 per cent of its potash, which means that a Saksrithai find could fill a major hole in the Southeast Asian market. Imports have kept up with demand since 2011, and demand is expected to rise steadily until 2027. And in China and India, potash demand is massive-it’s crucial to regional rice and palm oil production.

From the Saksrithai property, Vatic has excellent access to excellent infrastructure: it can drive potash down the road to market with a relatively low transportation investment.