East coast flush with green mineral

New Zealanders often look across the ditch with envy at Australia's vast array of mineral wealth, but has our country not looked hard enough or not willing to invest in the future to develop our mineral wealth?.

The sort of seed capital to look at harvesting this potash mineral potential, seems very small to secure supplies that are an important ingredient in our pastoral fertiliser market. Potash is a mineral that encourages vigourous clover growth, which is the key ingredient to drive production in NZ pastures. In my view I would like to see greater emphasis in improving the soil nutrient status by way of the clover plant, than by spending money on fertiliser N as seems more common place today.

NZ's  competive advantage is growing cheap grass, with cheap water, in a temperate climate, but regular fertiliser inputs are needed so the potential production can be realised. We are a country short of capital but has this made us think too short term in investment planning which will make us miss opportunities out into the future?

Ray Merchant is a colour-blind geologist hunting for a green stone. The stone is glauconite, a source of potassium, the K in NZ farming's essential NPK fertiliser trinity. Merchant is a seasoned minerals hunter who turned his attention to glauconite in 2008 when world fertiliser prices spiked as demand for commodity foods suddenly rose. So far, his search has proved successful, with big deposits being located on the east coasts of both islands reports Stuff .

He is convinced enough glauconite exists to eliminate the need to import much of the potassium salts used in fertiliser - 120,000 tonnes a year on average over the past decade costing more than $50 million a year. However, fertiliser companies say potassium, sold as potash, is still so cheap on the world market it is not worth starting a local industry. But Merchant warns the world's biggest potash mines in Canada, Belarus and Russia are in the hands of a price cartel that is controlling the market.

Added to that is growing demand from China and India, which take half of the world's $20 billion-a-year potash trade. "The NZ farmer can expect to pay more as time passes, and even more if supply lines are disrupted," he says. He thinks that as a protective strategy a start should be made on locating the best glauconite deposits and on laboratory studies, to be followed by a pilot plant and fertiliser trials.

Large deposits exist in East Otago, where they are found with phosphate, in North Canterbury, Marlborough and in the North Island from Wairarapa to Hawke's Bay and from Poverty Bay to East Cape. The best site he has found is on a farm near Gisborne. He estimates tens of millions of tonnes of glauconite containing 6 to 8 per cent potassium oxide and even some phosphate are easily minable just beneath the surface. He thinks an investment of $10,000 should be enough to secure a mining exploration licence and get the investigation started.

However, the chances the NZ fertiliser industry will need to call on home supplies of potassium soon appear remote. World potash supplies are predicted to increase in response to an expected lift in world demand. A recent paper by the International Fertiliser Industry Association looking at demand for the next four years says traditional suppliers plan to lift output 34 per cent to 59.6m tonnes by 2015, by which time there will be a surplus in supply.

Ballance Agri-Nutrients head of research Warwick Catto says that as long as NZ has such reliable international supplies it's hard to make a case for mining glauconite.The imported potash is 50 per cent elemental potassium, making it 10 times as concentrated as glauconite's potassium. The costs of extraction and logistics of production make it uncompetitive, he says.

A possible use for the potassium from glauconite is as an organic fertiliser. Merchant says he has had a lot of interest from organic growers and farmers. Inquiries by industry certifier AsureQuality show a gap in international regulations over the use of fertiliser from glauconite, adding to the complications of certification.

While in Southland studies are starting on developing a lignite to N fertiliser plant.

With construction of its briquetting plant scheduled to start next month, Solid Energy is poised to tick off a milestone in its next major project for Southland, a lignite-to-fertiliser plant reports The Southland Times. Lignite conversion general manager Greg Visser yesterday confirmed the company was set to start a feasibility study into the multimillion-dollar project.

Gore District Mayor Tracy Hicks confirmed that the council was expecting some news about the project close to the end of this year.In its quarterly report to June 30, the Government-owned coal miner says a concept study for a coal-to-fertiliser plant to produce up to 1.2 million tonnes of urea a year supported the decision to proceed to a feasibility study.Solid Energy was at in discussions with joint venture partner Ravensdown about future project options.