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Salt (sodium chloride) is an industrial chemical extracted from the sea or saline inland waters by solar evaporation, and in other countries by mining naturally occurring deposits. The salt so produced includes chemicals such as magnesium and potassium chlorides, sulfates, iodides and bromides. World production is around 180 million tonnes including from cheap dome deposits in USA, Germany and China.

Salt is the key raw material for chloralkali plants producing caustic soda (sodium hydroxide) and chlorine used to produce polyvinyl chloride resins.

International

Internationally traded salt was supplied by the major solar salt producers in Mexico and Australia:
bulletExportadora de Salt - Guerrero Negro, Mexico
bulletDampier Salt - Dampier and Lake Macleod, Western Australia
bulletCargill Salt - Port Hedland, Western Australia
bulletShark Bay Salt - Useless Loop, Western Australia
bulletOnslow Salt at Onslow Western Australia
 

Dampier Salt buys Port Hedland operation for A$185m July 2001

RIO Tinto said its 64.9 per cent-owned subsidiary Dampier Salt has entered into an agreement to acquire Cargill Australia's salt operation at Port Hedland, Western Australia for $US 95 million ($A 185.37 million). It produces and exports around 3 million tonnes of salt a year. The acquisition will expand Dampier Salt's current production capacity of about 5 million tonnes a year from its Dampier and Lake MacLeod salt operations, making it the world's largest salt exporter. Dampier Salt's remaining shareholders include Marubeni Corporation (20.5 per cent), NisshoIwai (10.1 per cent) and Itochu Corporation (4.5 per cent).

Western Australia

In 1997 Western Australia’s salt production increased by 12 per cent to 8.1 million tonnes and the value by 20 per cent to $172 million. Total production in Australia is worth $300 million.

By 1998/99 this had increased to 8.5 Mtonnes valued at A$199million.

Table for 1998

Major locations Millions Tonnes $M Value Value/tonne
Carnarvon (Cape Cuivier) 1.178 25.467 $21.61
Port Hedland 2.582 54.794 $21.22
Roeburne 3.356 71.876 $21.41
Shark Bay 0.869 24.496 $28.18
Total 7.958 M tonnes $176.633 $22.12/tonne

In 1995, salt production in Western Australia was about 7.3 million tonnes valued at A$156 million (about A$21 per tonne).

The largest producers are;
bullet Dampier Salt at Dampier in north west Western Australia capacity of 4.7 million tonnes. Dampier ownership is Rio Tinto 65%, Marubeni 20%, Nissho-Iwai Ltd 10%, Itochu Corporation 4.5%. Production increasing by 0.1Mtpa to 0.2Mtpa. Being 3.8Mtpa at Dampier and 1.5Mtpa  at Lake McCleod. 
bulletCargill Australia at Port Hedland with capacity of 3 million tonnes. Cargill Salt is 100% owned by US Cargill.
bulletOnslow Salt at Onslow some 200 km south of Karratha capacity of 2.5 million tonnes to began production in 2001 target 2003. Onslow is owned by Salt Asia Holdings 92% (Akzo Nobel 65%, Hanwha 20%, Sepmurna Caturguna 15%) and Gulf Holdings 8%. It has constructed 8 000 hectares of salt ponds and a 10 km shipping channel ;
bulletShark Bay Salt Joint Venture at Shark Bay (also in the north west capacity of 1 million tonnes. Shark Bay is 35% owned by Shark Bay Resources, 30% by Mitsui and 30% by AMP Society; It is increasing from 0.9Mt pa to 1.6Mt pa over five year period to 2005; and
bulletWA Salt Supply with a mine near Esperance in the south of WA, another near Koolyanobbing east of Perth and a refinery at Hamilton Hill near Kwinana with capacity of about 0.25 million tonnes.
The demand for salt for the chloralkali industries of Japan, Korea, Taiwan and Malaysia Indonesia Philippines rose from around 9.5 million tonnes in 1994 to 11 million tonnes in 1997.

Prices and Freight

FOB prices have not moved substantially during the last 3 years, though delivered prices have varied due to seasonal and annual freight market rates.

The following are prices for 1998 FOB and in Australian dollars (in Jan 1999, prices averaged US$15 to US$18 per tonne). .

Month 1998 AHECC Destination Loading Unloaded Value
FOB
Tonnes
$/tonne
1
25010092
NO COUNTRY DETAILS DAMPIER (KING BAY)
999999
6949311
285494
$24.34
1
25010092
NO COUNTRY DETAILS PORT HEDLAND
999999
8853099
292520
$30.26
1
25010092
NO COUNTRY DETAILS USELESS LOOP
999999
1186309
61409
$19.32
1
25010092
NO COUNTRY DETAILS CAPE CUVIER
999999
728125
38794
$18.77
2
25010092
NO COUNTRY DETAILS DAMPIER (KING BAY)
999999
4992732
213281
$23.41
2
25010092
NO COUNTRY DETAILS PORT HEDLAND
999999
4651922
155800
$29.86
2
25010092
NO COUNTRY DETAILS USELESS LOOP
999999
950440
50127
$18.96
2
25010092
NO COUNTRY DETAILS CAPE CUVIER
999999
2058434
66538
$30.94
3
25010092
NO COUNTRY DETAILS THEVENARD
999999
375000
17500
$21.43
3
25010092
NO COUNTRY DETAILS DAMPIER (KING BAY)
999999
9845843
443235
$22.21
3
25010092
NO COUNTRY DETAILS PORT HEDLAND
999999
7971827
268100
$29.73
3
25010092
NO COUNTRY DETAILS USELESS LOOP
999999
860608
45133
$19.07
3
25010092
NO COUNTRY DETAILS CAPE CUVIER
999999
5060344
208059
$24.32
4
25010092
NO COUNTRY DETAILS DAMPIER (KING BAY)
999999
6090778
254745
$23.91
4
25010092
NO COUNTRY DETAILS PORT HEDLAND
999999
520770
17050
$30.54
4
25010092
NO COUNTRY DETAILS USELESS LOOP
999999
1708357
87945
$19.43
4
25010092
NO COUNTRY DETAILS CAPE CUVIER
999999
3574088
150372
$23.77
5
25010092
NO COUNTRY DETAILS THEVENARD
999999
375000
17500
$21.43
5
25010092
NO COUNTRY DETAILS DAMPIER (KING BAY)
999999
5503520
224650
$24.50
5
25010092
NO COUNTRY DETAILS PORT HEDLAND
999999
12985075
405800
$32.00
5
25010092
NO COUNTRY DETAILS USELESS LOOP
999999
1253645
62266
$20.13
5
25010092
NO COUNTRY DETAILS CAPE CUVIER
999999
2524653
94230
$26.79
6
25010092
NO COUNTRY DETAILS DAMPIER (KING BAY)
999999
7588840
311900
$24.33
6
25010092
NO COUNTRY DETAILS PORT HEDLAND
999999
2709501
82800
$32.72
6
25010092
NO COUNTRY DETAILS USELESS LOOP
999999
475666
22000
$21.62
6
25010092
NO COUNTRY DETAILS CAPE CUVIER
999999
4403453
167700
$26.26

The Mexican and Australian major salt producers are the current low cost producers of high quality solar salt as demanded by the chemical industries of Japan, Korea, Taiwan, Indonesia, Malaysia and the Philippines.

Freight, is a significant variable due to the large range of vessel sizes, the wide variation in the distance to customers from each of the major suppliers, the variable loading and unloading rates, port congestion etc. It can range from US$8.00 per tonne to US$30.00 per tonne.

For Japan, deliveries continue to be made across the full range of vessel sizes; Cape, Panamax and Handymax from Mexico; Panamax, Handymax and some Handysize from Australia.

In Korea, most deliveries are made in Handymax; and in Taiwan, Indonesia, Malaysia and the Philippines in Handy size.

CNF prices range from as low as the low US$20 per tonne for salt delivered direct in Capesize vessels from Mexico, up to more than US$40 per tonne for small shipments of less than 10,000 tonnes. The largest shipload being 93 000 tonnes (Navix MV Voyager).

Prices CFR from Australia to Japan ranged Panamax US$25-27 and Handimax US$28-43.

Quality

The quality of Australian and Mexican solar salt continues to set the industry standard for internationally traded salt.

Indian and Chinese salt have not yet achieved the standard set by Mexico and Australia. A number of customers are demanding calcium/magnesium ratios be maintained in the 2 to 3 range.

Quality of salt delivered to Japan in 1996 (per cent)

  Salt H2O Ca Mg SO4 Insolubles
Australia 97.47 2.04 0.04 0.02 0.12 0.00
Mexico 97.26 2.27 0.04 0.02 0.13 0.01
China 94.09 5.19 0.06 0.08 0.24 0.04
India 96.34 2.87 0.07 0.03 0.20 0.10
 

Outlook

Dampier Salt is located within 10 kilometres of where Western Australia oil and gas and most of its iron ore are exported (and mooted as an area for major industrial investment). Dampier is largely owned by Rio Tinto. A production cycle is 18 months. Dampier uses 10 000 hectares (100 sq kilometres) of ponds. (The company breeds milkfish to contain algae growth.)

At current production rates, Dampier Salt could extract about 260 000 tonnes of magnesium chloride/sulfate (expressed as magnesium) and 72 000 tonnes of potassium chloride (as potassium) though only about 60 per cent is commercially extractable.

Potential applications for these products include; magnesium, as magnesium chloride as a dust suppressant (being hygroscopic) and assistant in drilling solutions; and potassium sulfate for use in fertilisers (potassium chloride, the traditional source of potassium for fertiliser, is currently in world oversupply with depressed prices).

Onslow Salt, began producing salt at Onslow in the north West of Western Australia by end 1999. Costing some A$80m, it will have a production capacity of 2.5 million tonnes of salt. In March 2000 eight of twelve ponds were growing salt with first shipment due July 2001. It will ship with 45 000 tonne Handimax ships. 

Except some 80 000 tonnes of salt used for Western Australia's chloralkali plants, all the salt is sold overseas principally for chloralkali plants and industrial purposes. Unless Western Australia develops a substantial chloralkali industry (that would require at least 300 000 tonnes of salt equivalent to about 5 per cent of production) local demand is not anticipated to change.

Dampier Salt company considers that the production of bromides and iodides is not commercially viable given current world supplies and prices. There is little demand for the co-produced chemicals and West Australian industry considers it more economic for the world's supplies to be supplied from low cost centres in Israel and Jordan.

The manufacture of soda ash (using the Solvay process), could be considered given salt supplies close to gas at the Burrup Peninsula. A restraint could be a source of lime in the region though perhaps production could be integrated with current and potential needs in Perth. However lime (used to recover the ammonia in the Solvay process) would not be required if an ammonia plant established nearby and a market found for the co-produced ammonium chloride. The prospect is interesting and would represent a local market for at least 5 per cent of the salt produced.

horizontal rule

Gypsum

Gypsum is calcium sulfate also known as plaster used for cement and plasterbaord in building construction. World production is around 100 million tonnes.

Lake MacLeod Gypsum, a division of Rio Tinto, will produce gypsum from 1997 from a deposit contain 6 billion tonnes of gypsum at around 1.5Mtpa to represent around 1.5 per cent of world production.

Production is by leaching out the salt using ground water to achieve 100 ppm salt content. Australia's production will thereby increase to 1.8Mtpa.

 

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Chemlink Pty Ltd ACN 007 034 022. Publications 1997. All contents Copyright © 1997. All rights reserved. Information in this document is subject to change without notice. Products and companies referred to are trademarks or registered trademarks of their respective companies or mark holders. URL: www.chemlink.com.au/