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Conflict reveals potash market's vulnerabilities

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The Russia-Ukraine war revealed the vulnerability of the potash supply chain, said Gensource Potash CEO Mike Ferguson.

On Friday Ferguson recorded Kitco Roundtable with mining audiences manager Michael McCrae and Kitco correspondent Paul Harris.

Gensource is advancing a new technology, which Ferguson said is more modular and requires less capital. Gensource produces potash using a closed-loop method called selective extraction. A hot salt brine that is injected into ore bodies and then pumped out.

Russia and Belarus account for approximately 40 percent of global potash production and exports, noted Nutrien in its Q1 guidance. Due to sanctions and other restrictions, exports from the region are 20% lower this year compared to the year prior.

"The invasion of Ukraine by Russia really has shown a light on or exposed the lack of resiliency in the supply chain for for potash," said Ferguson, noting that high concentration within the industry and older mines have also contributed.

India announced that it was increasing subsidies for fertilizers due to prices rises for the commodity.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.