Federal Resources Minister Madeleine King still has faith in WA’s hopes to make a new industry out of potash but says it will take patience and time to get new projects right.
Despite the valiant efforts of several WA companies in recent years, so far none has been able to reach commercially sustainable production of the fertiliser ingredient — a potassium salt product mainly sold to the agriculture sector.
The fledgling industry has claimed three companies in just over two years, with Australian Potash — among the cohort of first movers — calling in administrators weeks ago.
The Federal Government’s Northern Australian Infrastructure Facility — established in 2015 to bolster new infrastructure and mining projects in the region — had agreed to lend $140 million to the hopeful in February 2021, but the loan never proceeded.
Kalium Lakes, in the hands of receivers but subject to a rescue deal from fellow aspirant Reward Minerals, collapsed in August owing $200m to its lenders, including at least $83m to NAIF.
Speaking to The West about the struggling sector, Ms King said potash had a long way to go and backed in NAIF’s role in de-risking new and often expensive big projects.
“Potash has been difficult,” Ms King said. “Sometimes things just don’t work out. We want them to work out, it just takes a bit more time, a bit more patience to make sure the settings are right for these projects,” she added.
“I think potash has a long way to go. It is going to be integral to agriculture for many years to come and we saw through COVID the trouble you can get into if you don’t have a diverse supply chain.”
She was confident taxpayer dollars had not been wasted on the new projects, but said it was fair to question where the loans — which she noted were 100 per cent repayable — were going.
“This is taxpayers’ money, it’s fair enough to question where it goes and it should never be wasted, and it never is,” she said.
“There’s been a lot of NAIF projects and there’s only one that has struggled, it is a potash one and that’s what we are trying to help with that project to see it be successful.
“I think it’s quite a remarkable thing that of all the main projects, there’s only one that has run into this struggle, but there are still mechanisms in place to make sure that that money is recovered.”