Reliance On Small Number Of Countries A Key Risk Driver For Phosphate Supply – Arianne Phosphate’s Lac à Paul Project Could Be The Answer

November 03, 2023 at 09:00 AM EDT

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By Meg Flippin, Benzinga

From fertilizer to grow crops to electric batteries to power next-generation vehicles, demand for phosphate is growing. At the same time, supply is increasingly disrupted. As it stands, most of the world has a deficit of this important rock, with North America, South America, Western Europe and much of Asia forced to import phosphate. North America alone is running at an annual deficit of about four million tons, and according to a 2022 assessment by the EPA “trade disputes, and reliance on a small number of countries for imports have led to limited supply and dramatically increased price of phosphate rock.”

That poses a potential risk to the world’s food supply, with agriculture production poised to grow 60% by 2050. And with the world showing indications of moving toward Lithium-Iron-Phosphate (LFP) batteries to power EVs and store wind and solar energy, the need for phosphate will likely only grow. The global phosphate market is projected to reach $16.8 billion in 2023 and hit $21.4 billion by 2033.

Currently, 85% of all mines producing phosphate are owned by fertilizer companies yet even with this, many companies are not self-reliant, including North America’s largest, Mosaic Co. (NYSE: MOS), and are forced to import rock. That carries its own risks. Much of the phosphate rock supply is found in the Middle East and North Africa or MENA region, which is facing political unrest and economic instability. That makes getting it from outside sources costly and unreliable. It is also why Arianne Phosphate Inc.’s (OTCMKTS: DRRSF) Lac à Paul Phosphate project holds promise.

Big And Independent

Lac à Paul is home to the world’s largest greenfield phosphate phosphate deposit and is located in mining-friendly, geopolitically-safe Québec, Canada. The geology of the project is also rare as it is igneous, as opposed to sedimentary. This geology allows the company to produce a high-quality phosphate concentrate with little-to-no contaminants. The nature of this phosphate also allows for easier and more environmentally friendly production of phosphate-based products. Higher purity is important, particularly in the European Union, which, as of 2017 has legislation on the books that limits the level of cadmium allowed in phosphate imported into the EU. That’s driving more demand for high-purity phosphate such as Arianne’s.

Arianne Phosphate reports that Lac à Paul Phosphate is also the only independent large-scale development project coming on-stream in the next few years, which indicates its potential to become a big supplier as a result.

Not Just Fertilizer

Although phosphate is mostly understood as an agricultural commodity, today it’s not just for fertilizer. There are several markets Arianne’s mine can serve and, again, due to its rare geological formation, it is ideally suited for all of them. One such market is the lithium-iron-phosphate (“LFP”) battery. The LFP is expected to be a major driver of demand for phosphate and its market is expected to exceed $50 billion by the end of the decade. Wood Mackenzie predicts lithium iron phosphate will become the leading battery chemistry for EVs by 2028. Arianne’s phosphate has already been shown to be ideal for this application.

Location, Location, Location

Location is everything, and the Lac à Paul Phosphate project is positioned strategically. It is located in a mining and investment-friendly jurisdiction with a well-developed infrastructure that includes clean energy, heavy haul roads, easy access to ports and skilled labor. The mine has received all its major permits to commence construction, has a social license to operate and has a long-standing commitment to environmental best practices. It will also be a boon to the local economy. Arianne expects the project will create 1,000 jobs during operation and contribute over $12 billion in economic benefits to the region. With a life span of more than 26 years, Lac à Paul Phosphate could bring economic vitality to the area for many years to come.

Phosphate is an important ingredient in everything from fertilizer to electric vehicles, but importing it is becoming more difficult. Arianne wants to change that with its Lac à Paul Phosphate project, providing a stable and secure supply of this very important rock to companies big and small and expanding North America’s share of global production.

ARIANNE PHOSPHATE INC. (www.arianne-inc.com) owns the Lac à Paul phosphate deposit in Quebec, Canada. Fully permitted and shovel ready, the asset is among the world’s largest greenfield deposits, capable of producing an environmentally friendly phosphate concentrate. Due to the nature of its high-purity, low-contaminant product, Arianne’s phosphate can be used to produce fertilizer as well as meeting the technical requirements of specialty applications such as the lithium-iron-phosphate (LFP) battery. The Lac à Paul deposit is rare due to its geographic location and geological structure. Arianne Phosphate is listed on both the TSX-V: DAN and the OTCQX: DRRSF.

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This information contains forward looking statements. All statements, other than statements of historical fact, included herein, including without limitation, statements regarding potential mineralisation and reserves, exploration results and future plans and objectives of Arianne Phosphate Inc, are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from Arianne Phosphate Inc’s (“Arianne Phosphate” or the “Company”) expectations are disclosed under the heading "Risk Factors" and elsewhere in Arianne Phosphate Inc’s documents filed from time-to-time with the TSX Venture and other regulatory authorities.