FOSKOR: Enabling Food Security in South Africa and Worldwide

Founded by the Industrial Development Corporation (IDC) in 1951 to produce phosphates for South Africa’s agricultural sector, Foskor remains its only vertically integrated producer of phosphate ore, phosphoric acid and granular fertiliser. Both locally and internationally, Foskor is a producer and distributor of phosphate rock, phosphate-based fertilisers, sulphuric acid, phosphoric acid and magnetite, with close to 2,000 skilled individuals spread across its Phalaborwa Mining Division, Richards Bay Acid Division, and a head office in Midrand.

“We are the leading domestic producer and supplier of phosphate-based products,” Foskor declares. “Beyond serving the local market and SADC regional markets we supply phosphoric acid and mono ammonium phosphate to international markets – particularly India, the world’s largest market of phosphate products – ensuring that our fertilisers contribute to crop yields worldwide.”

ESSENTIAL ELEMENT

“We supply phosphoric acid to other international markets including Brazil, Bangladesh, Saudi Arabia, the United Arab Emirates, Belgium and France, and while the bulk of our phosphate rock concentrate is used in our phosphoric acid manufacturing plant, we also export available products to other international markets such Belgium, Norway, New Zealand and Japan.

“Our commitment to quality and sustainability drives our operations as we supply essential nutrients to farmers globally.”

Foskor is the leading South African supplier of granular fertilisers, the core ingredient in nitrogen, phosphate and potassium fertiliser products known as NPKs – the three primary nutrients plants need to grow. In undertaking its primary activities of mining phosphate rock and production of phosphoric acid and phosphate-based fertilisers, Foskor mines and beneficiates phosphate rock at its two open-cast mines in Phalaborwa, in South Africa’s Limpopo Province, unearthing sufficient quantities of rock, carried by rail, to feed its phosphoric acid plant at the Acid Division in Richards Bay.

The 11^th most common element on earth and fundamental to all living things, phosphorus is not only essential for the creation of DNA, cell membranes, and for bone and teeth formation in humans, but also vital for food production. The majority of the phosphorus, an element that provides a quarter of all the nutrients that plants need for their growth and development, used in fertiliser comes from phosphate rock, a finite resource formed over millions of years in the earth’s crust, with 90% of the world’s mined phosphate rock used in agriculture and food production. 

Such is the importance of this mineral, and the resultant ever-increasing demand for it, it was revealed earlier this year that Foskor is considering supplementing its existing Richards Bay supply with alternative sources. A non-binding memorandum of understanding (MoU) was announced with junior mining company Minbos relating to a potential supply agreement from its Angola mine, with a series of bulk samples and trials slated to evaluate Minbos’ phosphate rock for commercial suitability.

“The company has been engaged with Foskor for some months as the two companies discussed how a possible collaboration would work,” said Minbos MD Lindsay Reed in Mining Weekly, adding that the ahead of schedule completion of the company’s new deepwater Port at Caio had allowed both companies to progress their discussions.

STRONG FUTURE

At the end of last year, it was announced that Foskor’s primary shareholder, the Industrial Development Corporation (IDC), was set to revive its plan to list Foskor on the JSE following a year in which it posted a R2.8bn profit. A government-funded South African development finance institution, IDC has the objective of promoting economic growth and industrial development through different financial instruments such as debt, equity and quasi-equity, guarantees, trade finance and venture capital, to finance entrepreneurs and companies and help them to enhance their industrial capabilities.

The funds are limited to companies engaged in certain sectors, among them agro-processing and agriculture, chemical products and pharmaceuticals and mining.

“We know we cannot continue to be a 66% to 67% shareholder in Foskor,” IDC CEO Tshokolo (TP) Nchocho explained, “we need investor capital to flow into it; now its performance is improving, the prospects of a listing are getting even better.” Nchocho added that the definitive decision has yet to be taken by the board, in light of the time required to prepare for a listing and the importance that Foskor builds up its record to restore market confidence.

2024 has marked the first year of Foskor’s ‘Journey to 2028’ strategy, and was one of the most significant in its history. Not without numerous headwinds, influenced by unfavourable macroeconomic factors as well as external and internal challenges, robust operations have been achieved during this business turnaround phase.

“Despite the challenges,” Foskor summarises, “we have begun to make inroads with the initiatives that will support growing Foskor into a stronger and more sustainable business.” Key aspects of this strategy moving forward include product diversification, the establishment of a green, reliable and cheaper energy supply and new downstream expansion in the value chain.

“Our 2024 performance demonstrates our resilience and ability to navigate difficult market conditions while maintaining our commitment to operational excellence and sustainable growth,” states Chairman Robert Michael Godsall.  “As we move forward, we remain mindful of the dynamic global economic landscape and the specific challenges facing our industry. However, we are well-positioned to capitalise on opportunities and overcome obstacles. Our strong foundation, coupled with our strategic focus on operational excellence, sustainable growth, and ESG integration, provides us with the tools we need to thrive in the years ahead.”

“Our mission is to be an enabler of food security in South Africa and across the globe,” Foskor concludes. “We strive to produce and enable the production of fertilisers in a responsible, sustainable, and inclusive manner to the benefit of all.”