Co-op to explore NZ phosphate

Ravensdown is considering mining phosphate rock under Milton farmland in the lower South Island, which might take some of the sting out of fertiliser prices for farmers.

The Milton deposit was last commercially mined during World War 2, but rising prices for the key fertiliser ingredient up ten-fold from a year ago have driven fertiliser co-operative Ravensdown to sign up mineral and land agreements.

Ravensdown began exploring the reserves this week over the 500ha site, about 5km north of Milton, near Dunedin.

Chief executive Dr Rodney Green said the price of phosphate rock had risen steeply, making mining and upgrading its concentration at Milton a viable option.

The co-operative was assessing the size and value of the reserves to see if mining would be a cheaper alternative to importing, he said.

"We know there is phosphate there and we also know the price of phosphate rock is 10 times what it was a year ago from $US50 a tonne to $US490 and the cost of shipping has gone from $US20 a tonne to $120, and our dollar is dropping. We have (currency) cover, but cover does not last forever, so this is extremely important."

Phosphate rock, at $938 a tonne after shipping and exchange rate conversions, is the most expensive of the fertiliser minerals and double to treble the cost of potassium or sulphur.

Ravensdown has mining experience as the owner of about 10 lime quarries, and the deposits are about 40km from its superphosphate plant.

Green said the co-operative would continue ordering phosphate rock from Morocco, but was keen to supplement this with domestic production.

"At this stage we do not know how easy it will be to extract the rock, but it looks promising."

Ravensdown was alerted to the deposits after farmer Tony McDonnell sought advice from them about extracting the mineral from his farm.

The Milton site is the only known commercially mined phosphate reserve in New Zealand and was last mined in the 1940s when the Japanese secured the former phosphate stronghold of Nauru Island.

A report by Dr Barry Douglas in 1989 estimated reserves of about five million tonnes of non-concentrated rock over 72ha.

If the phosphate seams extended to 34m tonnes over 500ha, Ravensdown would be self-sufficient in superphosphate for 22 years.

Ravensdown has completed negotiations for an undisclosed sum for the mineral and land agreements held by landowners and other groups.

The co-operative buys 500,000 tonnes of the rock a year from overseas. One million tonnes of phosphate rock produces 1.7m tonnes of superphosphate, worth $960m.

- © Fairfax NZ News