Potash: A Primer on the Fertilizer Behind Merger Talks in Canada

August 31, 2016 07:28 AM
Potash Corp Rocanville underground

Potash has been one of the most commonly used fertilizers for hundreds of years, playing a vital role in boosting agricultural output to help feed a growing global population. But what is it? As Potash Corp. of Saskatchewan Inc. and Agrium Inc. engage in merger talks, here’s a potash primer.

What is potash? Potash refers to a variety of compounds containing the element potassium, used in agriculture to help crops absorb nutrients more efficiently and better resist disease. The term comes from a practice dating back to at least the 17th century of soaking wood ashes in water, then heating and evaporating the mixture in an iron pot to leave a white residue known as "pot ash."

How is potash produced? Potassium is the seventh-most abundant element on the Earth’s crust but reacts rapidly with water so it isn’t found freely in nature. It’s usually mined from large rock deposits that were once submerged under ancient seas. Potash can be mined conventionally from underground or by using a salt solution that’s pumped into holes, saturated with potash, then brought back out. The world’s biggest potash reserves are found in Canada, Belarus, and Russia, according to the U.S. Geological Survey.

How is potash used? Potassium is one of three main nutrients needed by plants to grow, along with nitrogen and phosphorus. About 95 percent of global potash is used in fertilizers, with small amounts going to make soaps, glass, ceramics, chemical dyes, and other uses. Common crops that use potash are corn, rice, wheat and cotton. Historically, the biggest consumers have been China, the U.S., India and Brazil.

Who are the biggest suppliers? The world’s biggest producers of potash by volume in 2015 were Uralkali PJSC, Potash Corp of Saskatchewan, Mosaic Co., K S AG, and Israel Chemicals Ltd., according to Bloomberg Industries. Canadian exports have been controlled by Canpotex Ltd., a joint venture comprising Potash Corp, Agrium and Mosaic’s Canadian unit, which controlled 37 percent of global capacity last year.

Are there any export controls? A second potash export group run by Russian and Belarusian producers collapsed in 2013, sparking a sell-off in potash prices. At the time, the two groups controlled about 80 percent of global exports.


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