September 22, 2010 / 9:03 PM / 9 years ago

World is far from running out of phosphate -report

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* Enough rock to make fertilizer for 300-400 yrs-report

* No sign supplies poised to rapidly decline

* Reserves pegged at 60 bln t vs USGS 16 bln t

* Key difference is reserve estimate for Morocco

By Roberta Rampton

WASHINGTON, Sept 22 (Reuters) - There is enough phosphate rock to make fertilizer for several hundred years, according to a new report released on Wednesday, knocking down speculation that the world is poised to run out of phosphorus, a nutrient crucial to agriculture production.

The report comes amid renewed interest in the fertilizer sector as BHP Billiton (BHP.AX) BLT.L fights to take control of Potash Corp POT.TOPOT.N, the world’s third-largest phosphate producer, with a $39 billion hostile bid.

There is an estimated 60 billion tonnes of reserves of the mined, non-renewable mineral — one of three essential nutrients to grow crops — plus another 290 billion tonnes of raw global phosphate rock resources that could be used in the future, the International Fertilizer Development Center said.

The estimate by the IFDC, a non-profit aid group focused on using fertilizer to boost crops and food supplies in developing nations, is more than triple the U.S. Geological Survey’s reading of world reserves.

“When I started this study, I want to admit that I thought there might be a real problem,” said Steven Van Kauwenbergh, a geologist with the center.

“I don’t see any indication of any peak phosphorus,” Van Kauwenbergh told an event at the Center for Strategic and International Studies in Washington.

The IFDC decided to estimate world phosphate supplies after a resurgence of concern about shortages in recent years, said its Chief Executive Amit Roy.

The study was funded by the U.S. Agency for International Development.

The Alabama-based IFDC found no sign that supplies were at imminent risk of exhaustion, although it acknowledged that the fertilizer is a finite resource, and urged new research on how to mine, process and use the nutrient more efficiently.

Top world suppliers of phosphate include the Office Cherifien de Phosphate in Morocco, Yuntianhua Group of China YTHGR.UL, Brazilian miner Vale VALE5.SA(VALE.N), Saudi Arabian Mining Company (1211.SE), and North American producers Agrium AGU.TOAGU.N and Mosaic Co (MOS.N).

RESULTS DWARF USGS ESTIMATE

The IFDC’s projections dwarf estimates from the U.S. Geological Survey, which has pegged total world reserves of phosphate at 16 billion tonnes. At current production rates around 170 million tonnes, that level of reserves would be sapped in less than 100 years.

The USGS data is widely quoted by those who believe the world could soon run out of the nutrient, Van Kauwenbergh said.

Arno Rosemarin of the Stockholm Environment Institute, part of a group that has published articles warning about future supply shortages, questioned the IFDC estimate of 60 billion tonnes of reserves.

“I’m very concerned that we’re blowing off the peak phosphorus debate,” Rosemarin told the event.

The IFDC study estimates reserves in Morocco at 51 billion tonnes, based on 1998 data published by state-owned OCP. The USGS estimate for Moroccan reserves is 5.7 billion tonnes.

“These may not be proven reserves,” Rosemarin said on the sidelines of the event. “These are theoretical calculations.”

Van Kauwenbergh defended his estimates. Eight experts, mainly from the fertilizer industry, reviewed the study and did not dispute the results, he said in an interview, declining to name the reviewers.

“I’m very comfortable with the number and I think it’s a very good number,” he told the audience.

“No one has contested these numbers who has any direct knowledge of the reserves and resources.”

Reserves are “dynamic,” he said, noting technology and market prices as well as new exploration help determine supplies.

But Van Kauwenbergh also stressed that his estimate is preliminary, noting governments and companies do not tend to disclose their own projections.

“The only people who have the data are the people who own the deposits and produce the deposits,” he said.

The IFDC hopes to refine its estimates by working with producers, academics, governments and others on a database that can be continually updated. (Editing by David Gregorio)

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