Potash may be under the radar for many people outside the agricultural sector and mineral-based industries. Yet, its role in agriculture is indispensable. Potassium, a key component of potash fertilizers, is vital for fostering healthy plant growth. This is why potash fertilizers are the most highly-valued and widely-used potassium fertilizers in the world.
With the world’s population surpassing 8 billion and projected to reach 10.4 billion by the century’s end, the demand for potash has never been more crucial. It’s not merely a commodity; the global production of potash is fundamental to ensuring global food security.
In this blog post, we will explore the pivotal role that potash plays in industry and agriculture, and how this seemingly ordinary mineral helps to fuel our farms and feed the world. We’ll also look at how ICL is leading the way in the production of potash and the manufacture of sustainable potash-based fertilizers.
What is Potash?
Potash is a generic term for salts that contain potassium in a water-soluble form. Potash can be either obtained through mining or extraction processes. There are sizable deposits and highly profitable potash mines in several countries around the world.
The name potash derives from the medieval practice of refining potassium compounds from wood ash in large iron pots. Naturally occurring potash began its existence as seawater in inland seas. As the water evaporated, leaving beds of potash ore. Over millions of years, these were covered under huge layers of tightly packed earth.
Potash was used in various industrial processes, including glass, ceramic, textile, and soap manufacture, and has been an important commodity for centuries. There are still niche industrial applications for potash, but the agricultural sector accounts for around 95% of potash demand. Along with nitrogen and phosphorus, potassium is one of the three most essential crop nutrients. Potash fertilizer has been in use for hundreds of years and is expected to account for the majority of future potash market growth.
ICL Group is one of the world’s leading potash producers and a manufacturer of potash-based fertilizers. The company was originally formed a century ago to explore and develop mineral reserves in Israel’s Negev Desert and has unrivaled experience in managing potash mines and fertilizer production plants. ICL Group currently extracts over 4.5 million tonnes every year.
Understanding the Importance of Potash in Agriculture
There are now over 8 billion people in the world. The United Nations predicts that the global population will peak at 10.4 billion this century. Feeding every human on the planet is a major challenge, especially as we face issues like global warming and extreme weather events, soil erosion, and geopolitical instability.
An adequate supply of affordable and environmentally safe fertilizers is crucial. An increase in potash prices can lead to a rapid increase in the price of food staples and also natural fabrics like cotton.
Potassium plays an important role both in plant health and in soil health. Some of the major benefits of potassium nutrients include:
- Better crop yields
- Increased nutritional density and value
- Enhanced crop quality: taste, color, and texture of fruits and vegetables
- Greater plant robustness and stress tolerance
- Increased disease resistance
- Regulates water use in plants
Distinct from typical manufacturing processes, ICL uses, at its Dead Sea Works site, a natural solar evaporation process to produce extremely high-quality potash, recognized worldwide for its premium quality, and a significantly lower carbon footprint than potash obtained by other methods. In addition, ICL’s potash contains about 62% K2O, making it one of the highest concentrations among producers. ICL also uses its potash as a raw material for fertilizer production, including for granular NPK and water-soluble NPK fertilizers.
ICL is equally committed to implementing sustainable practices in potash mining and fertilizer production. ICL is transforming its own plants to run on clean energy through hybrid grids and is developing profitable circular economies across its worldwide mineral extraction and production operations. By leveraging this innovative production approach to potash production, ICL not only minimizes environmental impact but also sets a benchmark in sustainable fertilizer production.
The Size of the Global Potash Market
The size of the global potash market is huge – measured in billions of dollars – as it plays a critical role in agriculture. Niche industrial requirements aside, potash is essential for meeting ever-expanding growth requirements for the agricultural sector, including food staples for humans, animal feed, and crops like cotton.
Potassium, derived from potash, is an essential plant nutrient, vital for plant health, growth, and resilience, performing unique metabolic functions with no known substitutes. This irreplaceability of potassium, due to its specific roles in plant biology, underscores the urgency of sustainable potash mining to ensure global food security. Considering its unparalleled value, the quest for sustainable extraction methods and the efficient use of potash in agriculture becomes ever more crucial.
This means that potash market predictions all envisage long-term growth across the production, manufacturing, and retail spectrum. Potash price per tonne will fluctuate like any other asset, but it is an essential commodity that will always be in demand.
The global potash market, a key component in agriculture and food production, is experiencing significant growth. The market size was estimated at around USD 60 billion in 2023 and is projected to grow at a compound annual growth rate (CAGR) of 4.5% between 2024 and 2032. This growth is driven by the increasing global population and the corresponding demand for food and agricultural products
Potassium, in its various compounds, makes up 2.6% of the earth’s crust by mass. There are major viable deposits and potash mines scattered across the world, and we have barely begun to explore potential reserves below the seabed.
ICL is a major potash producer but is also an industry leader in terms of its integration of smart technologies, sustainable practices, and rapid progress towards carbon net zero. Israel is the world’s 6th largest producer of potash and ICL has access to the country’s vast Dead Sea reserves. It also mines potash in Spain through its subsidiary, ICL Iberia.
ICL has a strong presence in some of the largest markets for potash and its fertilizer derivatives. These include China, Brazil, the EU, India, and South East Asia. Many of these markets, in particular the Asia Pacific region, need to feed expanding populations, and demand for potash is set to grow. ICL operations in Israel and Spain have particularly reliable infrastructures and are located close to international cargo ports.
ICL’s Potash Extraction and Processing Operations
ICL extracts potash (as well as bromine, sodium chloride, and other minerals) at its Dead Sea site in Israel. The sites employ over 1,500 full-time employees and potash extraction alone amounts to a volume of over 4,000 kt annually. The extracted minerals are dried and processed for international shipping.
The Dead Sea plants are increasingly energy and water-efficient and there is an ongoing focus on sustainability. ICL Dead Sea operates five dedicated teams to improve and innovate in all areas relating to sustainability:
- Circular economy
- GHG emissions reduction and energy efficiency
- Waste reduction and green procurement
- Biodiversity
- HR
ICL Iberia extracts potash at a depth of up to 900m in its Catalonian potash mine, located in Suria (Barcelona). The company mines sylvinite (a mixture of potash and salt) and processes it into potash and salt at local plants.
ICL runs a state-of-the-art terminal located at the Port of Barcelona, with an annual ship loading capacity of 4 million tonnes. ICL has also signed long-term agreements with the Catalan Railway Authority to increase rail transportation of potash and salt from Suria to the terminal, reducing its dependence on trucks, and consequently, its carbon footprint. The new terminal, inaugurated in 2020, is partly powered by rooftop solar panels.
Potash as an Investment Opportunity
The agricultural sector is the single most important sector in the global economy. Without functioning agriculture there is nothing. Potash is an integral component of global agriculture and is vital for growing abundant and healthy crops of food staples, both for humans and for animal feed. As the human population expands, and standards of living rise, demand for food products – and therefore potash market growth is expected to rise. To recap: The projected compound annual growth rate CAGR is 4.5%, to reach USD 90.49 billion by 2032.
Companies like ICL that can optimize the extraction and production processes through smart technologies, and have access to superior logistics, are at a significant advantage.
When you’re dealing with millions of tonnes annually, the ability to even slightly reduce the cost price of potash per tonne can open the path to market dominance. At this point in time, there are no viable alternatives to naturally produced potash. It is a core commodity that will continue to be in demand in line with agricultural production. Increased demand in the Asia Pacific region in particular will increase the size of the global potash market over the coming years.
ICL: Ready for Potash Market Growth
Potash market predictions are largely positive and companies that can extract or process potash efficiently have plenty of lucrative markets to target. Companies that can extract, process, and manufacture potash-based products are superbly positioned to profit from this abundant and naturally occurring raw material. ICL is one such company and its command of new smart technologies, as well as its ability to generate its own sustainable energy to power potash plants like Dead Sea Works, place it in the industry’s top tier.
Although ICL’s Dead Sea potash reserves are plentiful, it is not dependent on a single source of raw materials, nor is it dependent on any single market for its potash fertilizers and other niche potash products. ICL intends to use its smart operations, circular economies, and scale of production to drive down the cost price of potash.
As part of ICL’s commitment to achieving global food security (in line with the United Nations’ Second Sustainable Development Goal of Zero Hunger), the company is investing heavily in agtech and the development of effective crop nutritional solutions for agronomy on marginal lands. ICL has abundant reserves of potash and intends to use this basic natural resource to benefit humanity as a whole. ICL technology and innovation are already helping to feed the world with its unique portfolio of precision potash-based fertilizers.
Ready to invest in a future where profitability meets sustainability? Join us in supporting the growth of potash investment and securing global food security. Contact ICL today to learn more about investment opportunities and how you can contribute to a more sustainable world.
