ASX-listed potash, silica sand, kaolin and high purity alumina (HPA) companies have been hard at work on their projects over the December quarter of 2022, weathering geopolitical headwinds and post-pandemic supply issues.
The last three months have been busy for companies in these niche resource sectors as disruptions caused by Russia’s war on Ukraine have exposed vulnerabilities to the supply of these industrial minerals.
Uncertainty also struck markets in relation to some of these minerals that are produced in Russia which are indispensable to supply chains of modern manufacturing.
Demand/supply imbalance
The price of potash is heavily influenced by the three major muriate of potash (MOP) supplying countries - Canada, Russia and Belarus.
These suppliers of more than two-thirds of global MOP have shown the ability to stabilise and destabilise the demand/supply equation.
Given recent and current activity around Russia and Belarus, about 30% of supply is restricted and this has created uncertainty resulting in rapid elevation of prices around the world.
Over the past year of this disruptive environment, some of the major MOP importing countries such as Brazil, China and India scrambled to secure large inventories of MOP, exacerbating the supply/demand imbalance.
So, what does this all mean for ASX-listers in these sectors? Here is a breakdown of their quarterly performance.
In the spotlight: ASX potash stocks
Australian Potash
Australian Potash Ltd (ASX:APC)’s technical and permitting work during the quarter continued to maintain the shovel-ready status of its Lake Wells SOP Project (LSOP) in Western Australia.
The environmental approvals in place are sufficient for the LSOP to commence operations and will not hinder further expansion to 205,000 tonnes per annum (tpa).
Australian Potash has also executed five binding offtake agreements with four Tier-1 global fertiliser industry counterparties covering 150,000 tpa around the marketing and distribution of the LSOP’s premium suite of SOP products.
Managing director and CEO Matt Shackleton said: “The board of APC continues to canvass development funding opportunities and continues to be strategically aligned to bringing the LSOP, potentially one of the world’s larger SOP projects, into development during 2023.”
Highfield Resources
During the quarter, Highfield Resources Ltd (ASX:HFR) signed the principal facility documentation for €320.6 million senior secured project financing for its Muga Potash Project in Spain with a group of experienced European mining finance lenders (BNP Paribas S.A., ING Bank N.V., Natixis and Societe Generale).
Highfield has finalised the initial construction work around the mine gate during the quarter. The slopes were completed, bolted and shotcreted to ensure long-term stability.
The company has also received authorisation from the Government of Navarra to build Muga’s process plant on non-urbanised land within the municipality area of Sangüesa.
South Harz Potash
South Harz Potash Ltd (ASX:SHP)’s December quarter was marked by consolidation and project readiness ahead of commencing the pre-feasibility study (PFS) for the Ohmgebirge Potash Project in Germany.
Managing director Luis da Silva said: “The team has made strong and consistent progress in the December quarter in preparing for the year ahead.
“With the foundation of the mineral resource upgrade and the Ohmgebirge Scoping Study completed in the previous quarter, the focus has been on ensuring project readiness for the PFS we will imminently embark on.”
In the spotlight: ASX silica sand/kaolin stocks
Perpetual Resources
Perpetual Resources Ltd (ASX:PEC) continued to study and advance the Beharra High-Grade Silica Sand Project in WA during the December quarter, with numerous key activities undertaken including a major resource update.
The Beharra resource now stands at 137.8 million tonnes at 98.6% SiO2 (silicon dioxide) with the entire resource located above the water table, which accurately reflects the mineable deposit.
During the quarter, Perpetual continued to field significant interest in Beharra’s high-grade silica sand from existing and new potential distribution partners and off-takers.
Suvo Strategic Minerals
Suvo Strategic Minerals Ltd (ASX:SUV) continued to progress the upgrade and optimisation program at the Pittong Kaolin Project in Victoria, which remains on schedule for completion in Q3 FY 2023, with key equipment already installed, commissioned, and working as intended.
The company also carried out drilling on the cleared private land at its Eneabba Silica Sand Project in WA and has started studies and test work on the bulk samples collected.
In November, Suvo completed the acquisition of a 26% interest in Dingo HPA Pty Ltd, an Australian proprietary company aiming to produce high-purity alumina from recycled feedstock.
Andromeda Metals
Andromeda Metals Ltd (ASX:ADN) continued to grow the kaolin and halloysite potential at its flagship Great White Project (GWP) in South Australia during the December quarter.
The company signed an additional binding offtake agreement last quarter for halloysite-kaolin products, bringing the number of signed offtake agreements now underpinning the GWP to five.
The agreement with IMCD, a global leader in the distribution of specialty chemicals and additives, is for the exclusive sale in Australia and New Zealand of the Great White HRM™ concrete product and Great White SCM™ suspension aid product from GWP.
Allup Silica
During the quarter, Allup Silica Ltd (ASX:APS) advanced key work streams within the Sparkler Silica Sand Project in WA.
The company welcomed the results of a hand auger drill program across privately owned and cleared farmland at Sparkler C, which identified high-purity silica sand to depths of 2.4 metres.
Results from assays revealed an average raw materials surface grade of 98.8% silica, with the potential for premium 99.5% silica and sub-100 parts per million (ppm) iron silica sands once the material is processed from its raw state.
In the spotlight: ASX HPA stocks
FYI Resources
FYI Resources Ltd (ASX:FYI) has successfully developed an innovative process design to produce high-quality, high-purity alumina (HPA).
This low carbon emission process is now progressing towards commercialisation in joint development with one of the world’s leading alumina producers, Alcoa (NYSE:AA) of Australia Limited.
During the quarter, FYI and Alcoa (NYSE:AA) as the joint development partners in the HPA project, continued significant progress with the development of a Stage Two small-scale production/demonstration plant.
This included both advancing the engineering and operational design, and scheduling of the HPA project as well as supporting commercial, legal and marketing aspects of the project.
Altech Chemicals
Altech Chemicals Ltd (ASX:ATC) has moved forward with its pivot into battery storage solutions during the quarter as concepts like green energy and electrification emerge as key global themes.
The company has designed and launched its CERENERGY® ABS60 60 kilowatt-hour (KWh) sodium alumina solid-state battery pack, in collaboration with joint venture (JV) partner Fraunhofe, for distribution in the renewable energy storage market.
Altech has also started a definitive feasibility study (DFS) in relation to the CERENERGY® 100MWh Sodium Alumina Solid State Battery project for grid energy storage, to be built in Saxony, Germany.