Potash Vs. Phosphate: What's The Difference?

Potash vs. Phosphate: What's the Difference?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: POT,TSX:POT), Mosaic (NYSE: MOS) 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.

The next phase includes a floatation process that coats the phosphate particles with a hydrocarbon, allowing them to float to the surface for further separation.

The marketable product that companies reference is this beneficiated phosphate rock, whose phosphorus pentoxide (P2O5) content is suitable for phosphoric acid or elemental phosphorus production.

This product is often upgraded into granular diammonium and monoammonium phosphate (DAP and MAP, respectively), which is a high-grade, water-soluable fertilizer that can be applied to crops. Single super phosphate is a cheaper alternative to the popular DAP and is obtained through a chemical reaction between rock phosphate and sulphuric acid.

Like potash, phosphate is unevenly distributed globally, placing a large and growing amount of control onto a select number of markets. Morocco is home to 85 percent of global reserves, with smaller but significant reserves in the US, Canada, China and a number of other Middle Eastern and North African countries.

Phosphate is typically sold by the tonne in agreements signed between suppliers and consumers either through defined contracts or through spot markets. China and India are important players in determining where contract prices will settle and what impact growing demand will have in the market.


Potash is a potassium-based product that is often bonded to other chemicals to make it stable in normal conditions. Its name comes from the potash production process, whereby wood ashes are leached in iron pots: pot-ash. Today, potash has become shorthand for a variety of water-soluble potassium salts and is predominantly used as a fertilizer nutrient to encourage water retention in plants, increase yield, improve taste and help plants resist disease.

Today, the extraction and refinement of potash products is more complex as companies focus on ancient underground oceans of potassium salts that are often located hundreds of feet or more below the surface; these are mined as potash ore.

Extraction of potash ore is done through two methods. Conventional underground mining is where ore is dug out by large machines and transported to the surface. This method is expensive, but is also the most common. Solution mining is less common and uses hot brine (salt water solution) injected below the surface onto the ore body and then pumps the potash brine solution back to the surface for cooling and separation on surface ponds.

Ore bodies are typically graded by the percentage and tonnage of potassium oxide (K2O) and typically KCl (potassium chloride, or muriate of potassium). Both the more pure potassium form and a water soluable form of potassium, typically potassium chloride (KCl), potassium sulphate (K2SO4 or suplhate of potash, SOP) or potassium carbonate (K2CO3) are listed depending on the source to give investors an indication of the amount of potassium for use in fertilizer.

Predominant potash ore varieties are split into either sylvinite or carnallite resources, two types which occur most commonly. Sylvinite is a mixture of KCl and table salt (NaCl) while carnallite is KMgCl3•6(H2O) or potassium magnesium chloride plus water. As a result, sylvinite is typically valued higher than carnallite as it requires less energy to separate the KCl in sylvanite than it does to separate the magnesium in carnallite. However, both potash formations are currently economically viable resources.

Like phosphate, potash is typically sold by the tonne in agreements signed between suppliers and consumers either through defined contracts or through spot markets. Again, the booming Asian economies of China and India are critical players in the market and will shape the demand function for a long time to come.

Derek Lindsay of Arianne Resources weighs in

At the Vancouver Resource Investment Conference last month, Derek Lindsay, CFO of Arianne Resources (TSXV:DAN), provided some insight on the difference between the two chemical nutrients in an interview with the Investing News Network.


Securities Disclosure: I, James Wellstead, hold no direct investment interest in any company mentioned in this article.

Related reading: 

Coromandel Grows Single Super Phosphate Supply

The Future of Phosphate is in Morocco

Potash vs. Phosphate: What's the Difference? from Potash Investing News