Australian-based junior phosphate company Minemakers Ltd. has invested US$1 million to buy a 6.67 percent equity stake in JDCPhosphate Inc. (JDCP) of Bartow, Fla., a developer of a proprietary kiln-based phosphoric acid technology known as improved hard process (IHP). Half of the investment is in cash, and the other by way of an issue of Minemakers fully paid shares.
“We have been assessing the potential of the dry kiln process, and the applicability of Wonarah phosphate to it, for some time, and are delighted to have settled these agreements with JDCP,” said Minemakers Managing Director Andrew Drummond. “Wonarah phosphate seems particularly suited to the process, and there are likely to be large savings in capital, operating, and freight costs when it is applied to it. This is obviously a very exciting new development for the company and Wonarah.” He said the deal should provide considerable cost advantages for exporting into Asian markets compared to conventional phos acid production, and he noted significant much-reduced byproduct issues associated with the process.
JDCP says its breakthrough technology will significantly reduce production costs, increase tolerance for certain phosphate ore impurities, increase acid quality, and reduce the environmental footprint. In addition to licensing, JDCP plans to provide design, technical, and maintenance support services to its licensees, and to engage in internal phos acid production to the extent required to evaluate and test market the acid, and products containing the acid, at commercial scale.
IHP has been designed to process low-grade phos rock, silica, and petroleum coke to produce a relatively pure and concentrated form of phos acid (around 70 percent P205) suitable for use in solid and liquid fertilizers and in technical and industrial applications. JDCP expects that IHP will significantly increase the usable reserves of phosphate ore around the world.
JDCP is led by long-time fertilizer industry veteran Theodore “Tip” Fowler, who serves as CEO. Fowler has served as president of Freeport McMoRan Sulphur Co., as well as senior vice president of Agrico Chemical Co. and IMC-Agrico JV. In addition, he has been president of Fertiberia SL in Spain, president of Commercial Carrier Transportation in Florida, and vice president of development with Crescent Technology in New Orleans.
Among those on JDCP’s advisory board is Malcolm Scott, former president of phosphate companies U.S. Agri-Chemicals and Conserv. He has also been vice president, Florida region, for CF Industries.
The IHP patent was granted to Dr. Joseph Megy, who started JDCP to develop the technology and serves as the company’s chief technology officer. Megy holds over 20 patents and has successfully developed factories to produce products for the aluminum industry. He holds a BS in Mathematics and a PhD in Chemistry and Chemical Engineering from Oregon State University, and has completed advanced studies at MIT. For more information, see www.phosphatesustainability.com.
Fowler, who signed on with JDCP in November 2009, outlined several advantages of the process for Green Markets. The process does not use sulfuric acid. It has no byproduct phosphogypsum or other high volume wastes, with minimal emissions and water usage. The process uses lower grade rock, recycles more product, and can produce more product. In addition, there is less need for beneficiation or upgrading. While the process does use petroleum coke, it is a low-cost product with stable pricing.
Fowler said the technology is scalable, meaning that while it can easily serve a smaller deposit with a 200,000 mt/y plant, extra units can be built depending on the deposit size. In addition, he said it can be utilized with existing deposits where the low grade rock was not useable in the wet process. He estimated that the process could add significantly to the reserves of existing phosphate producers, including those in Florida. Fowler said that while North American producers have yet to invest in JDCP, they will be closely watching the results of its demonstration plant. The plant, which is expected to cost $30 million, is expected to take one year to build, with high hopes it will be complete in 2012. Although JDCP is still procuring financing, it has located a site in Polk County, Fla. In addition to the Minemakers investment, JDCP has received three Small Business Innovation Research grants from the U.S. Department of Agriculture, the latest being for approximately $300,000.
Subject to further testing in the U.S. this year and subsequently in a demonstration plant, Minemakers will be granted a license to construct a dry kiln processing plant in Wonarah using the JDCP process. Minemakers will be granted the exclusive Australian rights to construct and operate an acid plant with the IHP technology for a period of up to seven years. A licensing fee will be payable on each ton of phos acid produced, and JDCP will receive a fee set related to the capital cost of each module and its associated infrastructure. Licensing rights to the process will also be available to Minemakers’ other phosphate projects, including its Namibian marine deposits. Tests on these samples will occur in the next few months.
Minemakers said the process provides specific benefits to its Wonarah rock, including: low-to-medium grade Wonarah rock is suitable without upgrading; the process needs silica, and the Wonarah rock has higher-than-average siliceous content, with additional silica available nearby; the process will produce 70 percent phos acid, which sells at a premium; it will be cheaper freight-wise to ship the condensed downstream product rather than phosphate rock; the lower overall costs of the process; and initial capital cost estimates, including crushing and grinding circuits and tailings and storage facilities, is US$150 million for a 200,000 mt/y plant. The current product sales price is put at US$500/mt Darwin.
In other news, Minemakers recently entered into a memorandum of understanding with the Verte Group by which Asian loan funds will be targeted for the development of the Wonorah deposits.
The Wonarah phosphate reserves, located in the Northern Territory, are Minemakers’ key asset, and the company touts it as Australia’s largest undeveloped rock phosphate project. Indicated and inferred resource estimates for the entire volume of the modeled phosphatic units total 1,105 million mt @ 18 percent P2O5. The project is adjacent to the Barkly Highway and is situated less than 300 kilometers from the north-south (Darwin-Adelaide) standard gauge railway, with spare capacity. This would also allow Wonarah product to be transported relatively cheaply to the Port of Darwin, which has been expanding its export capabilities.