By Mariam Ghorbannejad

While Syria is the 88th largest country in the world, it has the 11th largest deposit of phosphate, a type of rock with high concentrations of the mineral phosphorus and a key ingredient used in fertilizer. With the planet’s population expanding and subsequently becoming hungrier daily, this rock-like substance ranks with petroleum and gas as one of the country’s most in-demand natural resources. A range of players – private and public, domestic and international – are helping to triple Syria’s annual production of this essential resource.

Local production

Five countries – Morocco, China, South Africa, Jordan and the United States – account for more than 90 percent of global phosphate reserves. These phosphate-rich nations and those ranking just beneath them, such as Syria, could become significant in the tussle for this resource in the global food chain.

According to the Syrian Investment Agency, phosphate is the country’s sixth-largest national industry, behind other mineral resources such as oil and natural gas. This could change, however, as the government moves to increase phosphate production from around 3m tonnes annually to approximately 10m tonnes per year. It also wants to move from simply exporting phosphate to producing and exporting the final products in which it is used, such as fertilizer.

The government owned and operated the country’s mineral industry until 2001 when, to encourage development of the sector, private investors were allowed to enter. Currently, however, production remains centred at two government-run sites, Khneifees and Al-Sharqiya, both located near Palmyra.

The public General Company of Phosphates and Mines (GECOPHAM) runs these plants. Al-Sharqiya, with two phosphate mines, is the larger of the two. In 2005, GECOPHAM opened a phosphate-washing plant at the site which processes 1.2m tonnes of the material annually. The plant was the first of its kind in the country and brought Syria’s total annual phosphate-production capacity to 3.8m tonnes. Marble, gypsum, stone, salt, gravel, and sands are also produced here by GECOPHAM, but generally not for export.

Phosphate production dropped sharply in the early 1990s when prices fell, but output has since increased to around 3.2m tonnes in 2008, netting the government SYP 18.2bn (USD 395.7m) in sales revenue. Last year the sector was hit hard by the global economic turmoil, which saw both the demand for and price of phosphate decline sharply. GECOPHAM’s production weighed in at 2.5m tonnes last year, a 23 percent decline from 2008. Sales revenue declined by 63 percent to SYP 6.9bn (USD 146.8m).

Foreign eyes on the sector

With phosphate reserves in Syria totalling 1.8bn tonnes, the country is attracting evermore attention from regional and international investors. Since opening up to private investors, eight projects have been approved, ranging from mining phosphate to transforming the raw material into a range of products including fertilizers and phosphoric acid.

A number of international firms are in the process of setting up both phosphate and fertilizer-production plants, shifting a move away from Syrian government-controlled operations. Abou Zabal, an Egyptian company, plans to mine and process phosphate at a site south of Palmyra. The deal stands as a significant development for the sector as it is the first time a private firm will be allowed to mine phosphate in Syria. The Syrian-Qatari Holding Company has also signed a series of agreements to establish a phosphate-based fertilizer plant with an annual capacity of 500,000 tonnes.

Potentially more significant is the interest shown by India’s Oswal Chemicals & Fertilizers Limited in developing the industry in Syria. The company is one of India’s largest chemical and fertilizer manufacturers and is presently setting up the world’s largest ammonia phosphate plant in Australia. In Syria, it plans to operate a phosphate-refining plant.

Indian firms have been paying closer attention to Syria’s phosphate industry – no surprise given the country is one of the world’s largest consumers and importers of phosphate fertilizer materials used for agriculture. In May last year, three Indian consultancy firms were selected to conduct a feasibility study for the Syrian government to develop the phosphate industry and increase its production and export potential. The study was paid for by the Indian government and came out of a deal struck during President Bashar al-Assad’s June 2008 visit to India.

Peak phosphate

Syria’s possession of vast phosphate reserves will only become more significant over time. Use of phosphate rock by farmers to increase crop yields has increased 1,100 percent since the end of World War II. The supply of this resource, however, is diminishing inline with the growth in global population, which has tripled in the same time frame. Without adequate amounts of phosphate, world food production will be restricted and will no longer be able to keep pace with the growing number of people on the planet.

With the world’s population expected to increase another third by 2050 – and emerging middle classes in countries like China and India eating more meat and dairy products – demand for phosphate continues to rise by around 3 percent a year.

As a result, between 2003 and 2008, phosphate fertilizer prices increased approximately 350 percent, although prices did fall significantly during the global financial and economic crisis.

“Our dwindling supply of phosphorus, a primary component underlying the growth of global agricultural production, threatens to disrupt food security across the planet during the coming century,” ecology experts James Elser and Stuart White wrote in the April edition of Foreign Policy. “This is the gravest natural resource shortage you’ve never heard of.”

A growing number of academics are now talking about “peak phosphate”, charging that in 30 to 40 years, the resource will be depleted enough that production of it will decline. Even the ‘alternative energy’ systems that are expected to eventually usurp traditional power sources, such as biofuels, are big consumers of phosphate.

“More demand for meat and dairy, especially in China and other rapidly growing economies, means more demand for fertilizers. While our bodies only need around 0.4kg of phosphate each year, we are mining 22.5kg of phosphate rock for each person’s diet,” the Global Phosphorus Research Initiative, a collaboration between independent research institutes in Europe, Australia and North America, states, adding: “Food demand is on the rise globally with no slowing down in sight.”