China's potassium self-sufficiency rate reached 57% for the first time

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China Drying Network News recently, the National Development and Reform Commission, the Ministry of Commerce and other 13 ministries and commissions jointly issued the "Implementation Opinions on Encouraging and Guiding Private Enterprises to Actively Develop Overseas Investment," which clearly supports conditional private enterprises to develop overseas energy and resources. This will allow the industry to once again focus on many of China's overseas potash projects. According to analysis by industry insiders, the Opinions will create a favorable policy environment for private companies investing in potash fertilizer overseas in the areas of finance, taxation, and simplified investment approvals, so that the "going out" strategy for potash fertilizers will be even more powerful.

It is understood that "going out" is a long-term plan for the potash industry. Since 2001, Chinese companies have established a number of overseas potash fertilizer bases in countries such as Laos, Canada, and Congo (Brazzaville). The total investment scale exceeds 2 billion yuan, and private enterprises are the main players in the project. However, as of now, overseas potash fertilizers have appeared to be “poor stagnant” in terms of production capacity and product development, and their main constraints are trapped in funds. China's overseas potash project with the greatest potential - Zhongchuan International Mining Holdings Co., Ltd. has a 96-square-kilometer potassium mine in Saskatchewan, Canada. During the three-year period, the country’s offshore exploration fund has provided 80 million yuan in funding for the project, but it still pays for the KP-488 potassium salt base with a planned total investment of 2.28 billion U.S. dollars and an annual output of 3 million tons. . Yan Changming, deputy general manager of Zhongchuan Company, repeatedly appealed in public: "It is difficult for such a huge investment to be supported by an enterprise alone. In the future, investment in capital is needed, and a great deal of technical, equipment, and engineering support is needed."

Faced with the turmoil in the international financial situation, the domestic fertilizer market is in the doldrums, and the timing of the sluggish export of nitrogen and phosphate fertilizers has accelerated the overseas investment in the potash fertilizer industry, which may increase the self-sufficiency scale of potash fertilizer in the next wave of high-fertilizer markets. The person in charge of the China Potash Fertilizer Industry Branch told reporters that potassium is a scarce resource in China, and overseas investment by state-owned enterprises is often cited as a “colored eyeglass” because of the government’s background. Private enterprises have more convenient conditions for “going out to find potash” due to flexible mechanisms. A person responsible for potash fertilizers said that the country’s “Opinions” explicitly encouraged domestic banks to provide liquidity loans and other forms of credit support for private enterprises’ overseas investments, and encouraged companies to list and raise capital on domestic and foreign capital markets. The provision of overseas infrastructure, the establishment of overseas distribution centers and other marketing networks and logistics service networks provide financial protection.

China Potassium (fertilizer) Industry Branch data show that in 2011 China's total demand for potash fertilizer was 66.67 million tons (purchased, the same below), of which domestic 3.856 million tons, potassium self-sufficiency rate for the first time reached 57%. With the continuous release of domestic production capacity, the domestic proportion of potash fertilizer will continue to change. An expert from the Ministry of Land and Resources stated that China has encountered constraints in infrastructure development and environmental protection technologies in the development of potassium resources in Laos and Africa. However, compared with other resources, the overseas layout of potash has gone very quickly. According to the "12th Five-Year Plan for Growth" of the petroleum and chemical industry, the medium to long-term plan for the potash fertilizer industry in China will be 1:1:1 domestic, imported, and offshore.

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