Namibia’s first offshore phosphate production on course

Namibia’s first phosphate rock offshore mine, some 180 km north of the port of Lüderitz, will soon be established.

According to LL Namibia Phosphates (LLNP) (Pty) Ltd, a division of the mining giant Sakawe Mining Corporation (Samicor), the company is on the verge of producing Namibia’s first ever phosphate– a development that is likely to see the agricultural and chemical manufacturing industries grow in leaps and bounds.

This was announced by the LLNP’s Project Development Manager Hans Hückstedt who said the multi-million dollar project is also expected to provide hundreds of jobs for Namibians and huge amounts of foreign exchange earnings once it comes on stream.

“The investment is envisaged to cost between US$600 and $800 million with employment for thousands of Namibians directly and indirectly. Our sister company, LL Biofuel Namibia, is operating a big commercial farm in Katima Mulilo and stand to benefit as one of our first end-users. This is truly a world scale project with remarkable potential in the medium to long term agriculture and greater economy of Namibia and the entire SADC region,” he said.

LLNP has been developing the offshore phosphate mining project aggressively since 2006 and has made significant progress in geophysical survey exploration and sampling stages, mining technology, converting its exploration production to mining licence (which was a world first), as well as securing waterfront property at the Lüderitz port area for processing of the minerals.

Samicor has been in the business of marine diamond exploration and mining in Namibian waters since 2003.

The experience of their management culminates to over 280 years of knowledge of marine exploration and mining and produced several ground breaking engineering solutions to extract less accessible diamonds over the years. This in-house knowledge provided a dynamic solution seeking approach required to design a mining system that can viably extract phosphate.

“LLNP is the holder of a world scale phosphate deposits offshore the coast of Namibia. Initial exploration shows it to be one of the biggest deposits in the world. LLNP has 100% ownership of mineral licenses with a 24% partnership with the Namibian Government and private Namibian citizens through its’ controlling company,” Hückstedt said.

According to LLPN, the project objectives of the new venture are to develop a world scale phosphate mining, processing and downstream manufacturing facility in Lüderitz to enable production of phosphate rock as feedstock for phosphoric acid production, production of merchant grade phosphoric acid and the production of downstream fertilizer products for SADC and export markets.

The geographical position of the project also provides a strategic position for export to South America, North America and India.

The Namfos deposit characteristics include a sea floor deposit of 180m to 300 m water depth and the highest percentage of phosphorous oxide being in the top 1.5 m of rock sediment. Simple mechanical beneficiation increases the grade substantially and the deposit has a loose sandy consistency with the Namfos phosphate pellets of size 0.7 to 0.1 mm diameter,” Hückstedt said.

He adds that the small grain size and unconsolidated nature makes it easy to mine and there is no overburden to remove during mining operations.

Phosphorous is a key component in the fertilizer industry and has no substitute in food production and cannot be manufactured as it comes naturally.

Farmers need phosphates as either a direct application to their crops and plants as well as a fertilizer for a number of applications. However, according to him, only five countries, namely the Morocco, USA, China, South Africa and Jordan control 85 percent of the world’s phosphate rock reserves.

“Today’s per capita agricultural produce in Africa is less than what it was in 1960. As the global population increases by 200 000 per day the demand for global food production and fertilizer will increase rapidly and will eventually reach a production peak by the year 2035.

Like oil, phosphate rock is a limited resource and the highest grade and most accessible deposits have been depleted,” Hückstedt adds.

According to the Food and Agricultural Organisation (FAO) the demand for phosphate fertilizer is projected to increase from 38 to 63 million tons per year between the years 2002 to 2027. This, the FAO says, has come about due to the increased demand in world food production.

LLNP says Namibia could also take advantage of the increases in the phosphate rock prices. During the last 2.5 years the phosphate rock prices has changed dramatically, making the commodity one of the top earners for countries that are producing it.

For example, he says, the 20 year average price for phosphate rock was US$55 per ton until May 2007 before it increased to US$430per ton in August 2008.

The price then stabilized downwards to US$90 per ton in June 2009. However, with the recent increase of the commodity price to $125 per ton as seen in April 2010 and the increase in demand for world food production, LLNP says it believes the time is now for Namibia to be a major player in the production of phosphate rock.

As result of the high prices in 2008 and the recession, fertilizer sales were far below agricultural requirements. This will result in below average crop production in an ever increasing market demand for food.

As a result, LLPN believes Namibia’s phosphate production could ease this burden as well as being on the forefront of local projects such as the Green Schemes and other agricultural projects that require fertilizer for food production. PF