Junior phosphate mining company Arianne Phosphate Inc., Saguenay, Quebec, said on Aug. 1 that it has entered into a Memorandum of Understanding (MOU) with a large marketer of sulfuric acid. The decision was made as Arianne continues to assess whether to proceed with the construction of a downstream phosphoric acid facility. In addition to having its own supply of phosphate rock, Arianne also notes the improving phosphate market as another reason to seriously consider downstream production.
“The cure to a low commodity price is a low commodity price,” said Brian Ostroff, Arianne CEO. “Demand for phosphate grows every single year, yet consistently lower prices for phosphate over the last five years affected supply growth, with expansion plans curtailed and new projects being shelved. After a prolonged period of time, a lot of what was believed to be excess supply gets taken up, and you go from excess supply to tightness, and the price correspondingly starts to increase, sometimes quite dramatically.
“Since the beginning of the year, phosphate prices are already up by 25 percent, and most industry watchers believe there is more to come. Arianne, with its world-class Lac à Paul project, should be in a position to take advantage of the industry revival,” said Ostroff.
Arianne said over the next few months it will continue to move forward its due diligence and discussions with potential partners regarding the viability of constructing a phosphoric acid plant.