Potash and phosphate play important but different roles in the development of crop growth. The chemical nutrients are both used to produce fertilizers that have become increasingly important as demand for more resource-intensive food grows in response to rising incomes across the world.
Neither potash nor phosphate can be used interchangeably. They both provide specific functions in supporting plant growth and are often judiciously and precisely applied to meet the specific requirements of a particular crop, climate, soil type or topography.
For some investors interested in tapping into the macroeconomic shift that has catapulted fertilizers companies to the front page, buying shares of the big three North American fertilizer companies — Potash Corporation of Saskatchewan (NYSE:
,TSX:POT), Mosaic (NYSE:
) and Agrium (NYSE:AGU,TSX:AGU) — is enough.
For others, a nuanced definition of the resources is required. With that in mind, we've set out a basic breakdown of phosphate and potash.
Phosphate is a shorthand for naturally occurring phosphorus, which is critical to the effective functioning of the biochemistry of all living organisms. Phosphate is predominantly used in either agriculture or industry, but approximately 90 percent of mined phosphate is used for crop applications in support of plant growth. Its primary function is to support strong cell development and water retention.
Like potassium, its counterpart in potash, phosphorus does not occur naturally; instead, it bonds with other elements to create a stable phosphate chemical.
Phosphate rock, or "phos-rock" is ore that contains the stable phosphorus mineral, which is located at various depths depending on the specific formation. Extraction methods typically require the use of large drag-line buckets, which scoop up material for refinement. The phos-rock is then beneficiated, or refined, by dousing the clay sand and phosphate "matrix" with water, and then grating and spinning it away from sand and clay to leave small phosphate pebbles behind.