Against the backdrop of a domestic shortage of potash resources, Chinese enterprises have been actively seeking potash resources abroad to support domestic demand. In the global expansion of potash production capacity, China has become a significant investor in new potash production capacity, with the focus of investment in Laos. As potash production capacity in Laos expands, more supply projects will be directed towards China.
Yang Guomin, the general manager of the Raw Materials Fertilizer Division of Sinograin Holdings, said that currently, China's overseas potash projects are most concentrated in Laos. The recent decision by the Lao National Assembly will not affect existing projects. China's investment projects in Laos are expected to bring back 5 to 10 million tons of potash to China in the future. Sinograin is committed to being a reliable force in ensuring the supply and stabilizing the price of potash at critical moments. This year, Sinograin launched the "Li" series of agricultural potash, initiating a dual upgrade of the brand and channels for agricultural potash. This is both a precise match for diverse planting needs and a measure to stabilize the price of potash in the market.
Dr. Khamda Voralath, the acting captain of the Geological and Mineral Exploration Team of the Lao Department of Mines and Geology, said that Laos has abundant potash resources and mining potential. Currently, nine companies are engaged in mining and processing. To promote better development and utilization of potash resources in Laos, on February 26, 2024, the Lao Department of Mines and Geology signed a memorandum of understanding with the Qinghai Nuclear Industry Geological Bureau to enhance cooperation between Laos and China in the development of potash and related minerals.
Tao Ruochen, the deputy general manager of Sichuan Huiyuanfa Potash Fertilizer Co., Ltd., introduced that as the world's second-largest potash reserve base, Laos is rewriting the global potash fertilizer landscape and has become the fourth-largest source of potash fertilizer imports for China. The potash fertilizer project of Lao Kainai Company successfully supplied potash fertilizer to China in 2014, being the first company among overseas potash fertilizer projects. In 2023, the company completed the construction of a 1 million-ton per year potassium chloride production facility, and in 2024, its potassium chloride production exceeded 1.2 million tons for the first time. To date, Lao Kainai has sold over 3 million tons of potash fertilizer to China. In the next step, Lao Kainai will focus on industrial upgrading, building a circular economy, and improving the comprehensive utilization efficiency of potash resources. The Lao Kainai Circular Economy Industrial Park under construction plans to build six major sections in the next 3 to 5 years, creating a multi-industry collaborative system, and striving to become a world-class potash fertilizer industry.
In terms of seeking potash resources abroad, Asia Potash International also has rich practical experience. Yin Tong, the deputy general manager of Asia Potash International in Beijing, introduced that Asia Potash International has built an industrial park in Laos, which has five advantages. First, it has a scale advantage with 1 billion tons of potassium resources and rich associated resources. Second, it has a location advantage, being located in the core of Southeast Asia in Khammouane Province. Third, it has a cost advantage, with industrial water, electricity, labor, and steam costs all lower than those in China. Fourth, it has a supporting advantage, with a comprehensive energy center under construction providing reliable and diversified energy supply for enterprises in the park, and the Asia Potash Town has initially formed a complete industrial town ecosystem. Fifth, it has a policy advantage, with the Lao government issuing policies for the Asia Potash Industrial Park, providing multiple preferential policies for enterprises in the park.
At the same time, Asia Potash International has proposed a "three modernization model" to achieve the coordinated development of industrialization, urbanization, and agricultural modernization through chain-level upgrading. The Asia Potash International Industrial Park is building a high-quality industrial development platform in Laos, providing opportunities for more Chinese enterprises to share the regional development dividends.
In response to the "Belt and Road Initiative", the Qinghai Nuclear Industry Geological Bureau has been continuously engaged in overseas solid potash exploration for 18 years, making outstanding contributions. Its wholly-owned subsidiary, Lao Qinghai Engineering Technology Co., Ltd., has further expanded the development of overseas mining by leveraging the qualifications, technologies, and human resources of its nine affiliated units. The company's general manager, Shi Guocheng, introduced that over the past 18 years, the company has completed exploration covering an area of 3,500 square kilometers, accounting for more than 90% of the total exploration area in Laos. In addition to cooperating with Laos, in May this year, we also held exchanges with the leaders of the Department of Geological Resources, the Department of Industry and the Department of Mines of the Ministry of Natural Resources and Environment of Thailand on the exploration of solid natural minerals and environmentally friendly development, and reached a cooperation intention.
