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Is the increasing focus on security of supply in an unstable global economy helping to accelerate the drive towards sustainability and net-zero?

Uneven geographical distribution of a critical mineral resource

Phosphorus is perhaps best known as an essential plant nutrient used in agricultural fertilisers. Given the continuing growth in global population and increasing pressure on food security, it is arguably one of the world’s most important minerals.

It is also one of the most geographically concentrated minerals in terms of both resource distribution and production activities.

Need for security of supply in an unstable world

Phosphorous is on the European Union's list of minerals of economic importance, but no European countries currently feature in the top 10 of either resources or production. European countries are heavily reliant on imports. Germany, for example, is the world’s second largest importer, with Europe accounting for a large proportion of global imports, as shown below.

Recent and ongoing geopolitical instability has brought the security of supply and self-sufficiency in critical mineral resources into sharp focus.

Phosphorus is a good example of this, with a significant proportion of global production taking place in China and Russia, making it potentially vulnerable to disruption.

This has provided impetus and urgency to the exploration and development of new reserves. For example, Norge Mining Limited (a UK-Norwegian group) has recently announced the discovery of up to 70bn tons of mineralised igneous phosphate rock at a new mine site in southern Norway. They plan to develop this into a significant mining operation with vertically integrated value chains in Europe.

Natural linkage with clean energy transition and sustainability

Phosphate also has applications in battery production for electric cars and solar panels, creating a natural link to the transition towards renewable energy. 

Furthermore, the development of new resources in Europe, rather than increasing production from existing resources or stockpiling, provides an opportunity for sustainable projects that take full advantage of the latest technologies.  

David Hough, Co-Head of Energy and Natural Resources, comments:

“Lithium prices remain low, creating commercial issues for miners, therefore alternative resources like phosphorus are likely to be in high demand if the UK is to meet its energy transition goals.”

Norge Mining’s project includes a partnership specifically focused on identifying sustainable mining solutions, potentially including carbon capture and waste reduction.

Indeed, given the current political and public insistence on energy efficiency in attracting permission and investment for new development, such projects simply could not succeed unless they are designed with sustainability in mind. 

Phosphorus represents an interesting case study where the increasing focus on security of supply in an unstable world could be helping to accelerate the drive towards sustainability and net-zero.

We will be monitoring how current trends impact supply and demand dynamics, as well as phosphorus prices, in the short and long term.

How we can help your mining and metals business

We work with a wide variety of clients in the mining and metals sector across the UK and globally.  

We can support your business with the following key areas of expertise: 

• Global network/capabilities, including audit and tax.
• Global mobility support and tax incentives.
• Advice on systems compliance with UK and wider regulations.
• Corporate governance, including ESG.
• Capital markets transactions.
• Model audit and due diligence assignments for lenders and developers.

Please contact Graham Ricketts if you would like to discuss how these issues may impact your business.