Phosphate could be farmers' gold

Reopening a historic phosphate resource in South Otago could provide farmers with relief from soaring fertiliser prices and underpin 20 years of agricultural growth.

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The biggest obstacle for Tony and Sue McDonnell was the disbelieving fertiliser company field officer.

Asked whether Ravensdown could process phosphate from his South Otago farm for use as superphosphate fertiliser, the field rep told the McDonnells there were no phosphate deposits on mainland New Zealand.

The McDonnells were visiting the Ravensdown site at the National Field Days in Hamilton in June this year, frustrated at the irony that while superphosphate had reached $500 a tonne, beneath their dairy farm sat a mineral deposit they later learnt covered 450ha and could save farmers up to $1 billion a year in imported phosphate rock.

Mr McDonnell recalled that the field officer took some convincing, even though they lived on Phosphate Rd and the original Ewing Phosphate Co Ltd building still stood on their Clarendon farm.

Finally convinced, within a minute the field officer had summoned Ravensdown chief executive Rodney Green and talks began which had led to investigations on the size and quality of the deposit on eight farms between Waihola and Milton.

Mr Green said he knew of the deposit from time working for McSkimming's Industries in Dunedin where he looked after the company's quarries.

When he took over the top job at Ravensdown, he said he asked about the merits of the Clarendon deposit but it was believed to have been exhausted.

"When Tony came in I knew exactly what he was talking about," he said.

Phosphate was discovered at Clarendon in 1902 and announced by the Otago Witness of June 11: "This discovery may quite possibly rank next in importance to the discovery of gold in this colony."

Mr Green said that early mining gave him some confidence the deposit could be viable.

The hill behind the McDonnell dairy farm was dotted with small mines where the pioneers worked phosphate outcrops.

"It seems to me to suggest the deposit is continuous."One of the early geologists described one outcrop as "18 foot thick and several chains long".

"If that is there, what is further in?" said Mr Green.

Initial work suggests there could be 34 million tonnes, enough to make Ravensdown self-sufficient for 23 years.

As a comparison, the Macraes gold mine in East Otago has been operating for 18 years.

The reserve appears to be concentrated on the inland hill behind Clarendon, above what Mr McDonnell calls the plough line.

Since 1902 it has been thoroughly investigated, with research as recent as 1989, and Mr Green said his staff were collating that information as it assesses its potential by looking at quantity, quality and then extraction and processing costs.

Initial work involved trenching for samples, followed by a drilling programme and then an assessment of the processing required.

Overseas phosphate reserves require large processing plants to improve the purity of the phosphorous or phosphate, but Mr Green said it was too soon to speculate about what infrastructure or investment was needed here.

Easy access to road and rail provided transport options to the company's Ravensbourne plant, where it could be shipped around New Zealand and even to Western Australia where Ravensdown also operated.

The resource was worked twice, from 1902 to 1924 and 1943-55 during which about 200,000 tonnes was extracted.

But it was cheaper to buy from countries such as Nauru.

Mr Green said simple economics made it worthwhile to again look at the Clarendon deposit.

The company bought between 500,000 and 600,000 tonnes a year of phosphate which it made into the fertiliser superphosphate.

Up to a year ago, it was paying $US40 ($NZ59.60) a tonne with shipping costs of $US20 a tonne.

Demand, and countries which previously exported phosphate now shoring up their own supplies, has sent the price soaring to $US500 a tonne, while shipping costs have also increased substantially to $US300 a tonne.