It will not return to low prices.

In Chapter 1 we looked at the supply constraint already underway.

"So when the geopolitical tensions ease, won't prices eventually come back down?" — it is tempting to think this way. If the shock is temporary, you wait for the wave to pass.

But what this chapter wants to show is that this will not happen.

The reason is not geopolitical. It lies in the economics of the mineral resource itself.

High-grade ore is being depleted

Phosphate rock is graded by the concentration of phosphate it contains (P2O5 content). The standard industry classification is as follows [source: Phosphate beneficiation, ECI Digital Archives].

Historically, the wet-process route for fertilizer phosphoric acid has used high-grade ore at 30–32% P2O5 with low impurities as its standard feed.

The agricultural revolution of the 20th century was built on high-grade ore from Florida, Morocco, Russia, and elsewhere. It lay near the surface, contained few impurities, and was easy to process. Cheap fertilizer rested on this "good ore."

But the good ore gets mined first. That is an iron rule of resource development.

From the second half of the 20th century, the major producing regions of the world saw their high-grade ore deplete. Surface-near reserves have continued to decline globally, and commercial extraction has now been forcibly displaced toward deeper, low-grade ore loaded with impurities.

The bulk of the world's phosphate reserves has already shifted into the low-grade band.

The emergence of mining limits and geopolitical concentration in major producing countries

World phosphate rock reserves are estimated at over 300 billion tonnes, but roughly 70% (over 50 billion tonnes) is extremely concentrated in Morocco and the Western Sahara region [source: HCSS Phosphate]. The 2024 world market was valued at about $21.4 billion, projected to grow to $32.9 billion by 2034 — but this growth is driven less by rising volume than by rising mining costs and product unit prices.

Even the United States, once proud of its abundant domestic resource, is seeing its high-quality reserves run down. US phosphate rock production from Florida, Idaho, North Carolina, and Utah has plateaued at around 20 million tonnes for several years, held there by declining ore P2O5 content and shrinking reserves.

[source: based on USGS (US Geological Survey) data]

To meet its enormous domestic agricultural demand, the United States is structurally being forced to deepen its dependence on high-grade ore imports from Peru (over 98% of imports) and Morocco.

The limits of physical beneficiation that come with low-grade ore

The shift to low-grade ore is not just a matter of lower phosphate content. It produces a serious second problem: a change in the physical and mechanical properties of the rock.

Low-grade ore often has a structure in which a soft chalky matrix (gangue) and hard phosphate minerals (oolitic pellets and the like) are unevenly intermixed. Crushing-test data on low-grade Idaho shales (around 17.6% P2O5) shows that the rock collapses to fine powder when struck with a hammer alone, and large amounts of extremely fine "slime" (fine-particle mud) at minus-325 mesh are generated during the grinding step.

This brown slime carries many impurities, and it becomes a fatal obstacle to physical concentration processes (beneficiation) such as flotation. Because slime impedes the process, a preliminary washing step called desliming becomes mandatory — and at this stage a large fraction of the fine phosphate is lost together with the mud.

The result is that the more you try to extract a high-grade concentrate from low-grade ore, the worse the yield, and a great deal of the mined rock ends up as waste.

Peak phosphorus: arriving around 2033

Behind the short-term price spike sits a fundamental resource-depletion threat called "peak phosphorus." It refers to the inflection point at which the world's phosphate rock production rate reaches its maximum, after which it declines irreversibly.

Multiple resource-assessment models predict this peak will arrive around 2033 [source: Peak Phosphorus, MDPI 2071-1050/3/10/2027].

USGS's upward revision of Morocco's reserves and the scientific debate

The USGS (US Geological Survey) sharply raised its assessment of Morocco's reserves in 2010, complicating the timeline of depletion [source: HCSS_17_12_12_Phosphate.pdf].

Even with that complication, however, scientific consensus has formed on the following points:

• High-quality, easily mined phosphate rock is in decline
• Mining, processing, and transporting low-grade ore carry exponentially rising costs

Even if Morocco holds vast reserves, that total includes both "easy-to-mine high-grade" and "hard-to-mine low-grade." The economically meaningful "extractable peak" still arrives in the 2030s.

EU concentration risk and the limits of new development

Data from the European Union shows the extreme concentration and fragility of the supply chain in clear terms.

• Between 2018 and 2024, 32% of EU imports of phosphate-related products came from Morocco and 24% from Russia
• The top seven countries account for over 80% of total imports
• A structure in which the geopolitical posture of supply countries directly determines the survival of importing countries' agriculture

Norway's Norge Mining has discovered a new giant phosphate deposit, and Vianode is moving to build plants aimed at the battery industry (LFP batteries and the like), but it will take enormous capital and lead time before such projects can meet world agricultural demand on a commercial basis and push prices down [source: Global Phosphorus supply chain dynamics, Diva-portal].

The premise from Chapter 1 — that the supply of phosphate fertilizer thins and prices rise — is therefore an accurate description of the current macroeconomic and geological reality.

The three costs of low-grade ore

Turning low-grade ore into fertilizer adds three costs that did not exist with high-grade ore.

Cost 1: Cadmium removal

About 95% of the world's phosphate rock resource is of marine sedimentary origin (marine sedimentary phosphorite), in which heavy metals — most notably cadmium (Cd) — were taken up at high concentration during the tens of millions of years of accumulation of marine biological remains and seafloor sediments.

Igneous-origin phosphate rock (parts of Russia and South Africa, for example) carries very low cadmium and is safe, but its share of world production is only around 13%, far short in absolute terms.

Cadmium is highly toxic and mutagenic, accumulates in the human body, and causes kidney damage, anemia, and bone softening (such as itai-itai disease). Cadmium left in phosphate fertilizer is readily taken up by crops (especially grains and leafy vegetables) once applied to soil and accumulates in the human body via the food chain.

For this reason, many countries — the EU foremost among them — have steadily tightened legal limits on cadmium content in phosphate fertilizer. Within the EU, for instance, legislation is in progress to lower the cadmium limit per kilogram of P2O5 from the current 60 mg in stages down to 20 mg. The effect will be to push fertilizers made from untreated sedimentary phosphate rock essentially out of the market, making heavy-metal removal a legal requirement.

The cadmium-removal dilemma — heat treatment vs. wet refining

Cadmium removal from phosphate rock comes in roughly two technological approaches, both of which carry enormous costs and technical trade-offs.

Approach 1: Removal by heat treatment (calcination)

The phosphate rock is heated to 850–1150°C in a rotary kiln or similar furnace and the cadmium is physically volatilized off. At a commercial facility built in the Republic of Nauru (75 t/h capacity), the cadmium content of untreated Nauru phosphate rock (about 600 mg/kg P) was successfully reduced to 120 mg/kg P or below.

The biggest drawback of this process is its enormous heat-energy consumption. Even on 1992 data, untreated phosphate rock traded at about $50/tonne, while calcined ore prices roughly doubled to over $90/tonne.

Approach 2: Chemical separation from wet-process phosphoric acid (WPA)

In the most common phosphoric-acid manufacturing route — the wet process — only the cadmium ions are separated out from the extracted phosphoric-acid solution. Co-crystallization, organophosphorus ligands, solvent extraction, electrodialysis (ED), and other advanced chemical-engineering processes have been developed, but each of them demands ongoing consumption of expensive organic solvents or ligands, or the introduction of advanced membrane separation equipment — that is, enormous initial investment (CAPEX) and operating cost (OPEX).

According to the International Fertilizer Development Center (IFDC), cadmium removal via selective extraction or leaching is, at present, deemed "technically and economically not feasible."

Whatever method is used, cadmium removal incurs a substantial added cost, and that cost is now a permanent markup on the base price of fertilizer.

Cost 2: Energy (the wet process and the structural growth of sulfuric acid use)

"Rising energy cost" does not mean simply a higher fuel bill. It rests on a structural weakness: the chemical reaction that processes low-grade ore (the wet process) itself depends heavily on a by-product (sulfuric acid) generated by the global energy industry.

The chemistry of the wet phosphoric-acid process

The overwhelming majority of the world's fertilizer-grade phosphoric acid is now produced by the wet process. Concentrated sulfuric acid (H₂SO₄, typically 60–66°Bé) is reacted continuously with phosphate rock (mainly fluorapatite) to extract the phosphoric acid chemically. The principal chemical equation is as follows.

3Ca₃(PO₄)₂·CaF₂ + 10H₂SO₄ + 20H₂O → 6H₃PO₄ + 2HF + 10(CaSO₄·2H₂O)

The reaction yields the phosphoric-acid solution as the target product and calcium sulfate dihydrate (gypsum = phosphogypsum) as a by-product.

Excessive sulfuric-acid consumption as ore quality drops

A decisively important fact: "the lower the grade of the ore, the more sulfuric acid is wasted." Low-grade ore contains, in addition to the target phosphate, large amounts of impurities such as calcium carbonate (CaCO₃) and iron and aluminum compounds. These impurities preferentially react with sulfuric acid in "parasitic side reactions," so to extract the phosphoric acid completely far more sulfuric acid than the theoretical amount must be added.

The principal raw material for sulfuric acid, liquid sulfur, is a by-product of the desulfurization step in petroleum and natural-gas refining. In other words, the production and price of sulfuric acid are directly linked to the trajectory of world fossil-fuel markets, refinery utilization rates, and crude-oil prices. According to 2025 World Bank data, even when natural-gas prices fell, liquid sulfur held high on supply constraints, and as a result the cost of producing phosphate fertilizer kept being pushed up.

Phosphate fertilizer relies on a unique resource (phosphate rock) while consuming, in its processing, large amounts of sulfur (a derivative of the energy market) — so it carries a double vulnerability to energy-price moves. The depletion of high-grade ore structurally raises this "sulfuric acid consumption per tonne of rock processed," leveraging and amplifying the impact of higher energy costs.

Cost 3: Radioactive waste (TENORM and the environmental liability of phosphogypsum)

Here is the point that gets overlooked.

Naturally occurring uranium and thorium

Natural phosphate rock universally contains naturally occurring radioactive material (NORM) — uranium (U), thorium (Th), and radium (Ra) — that was precipitated and concentrated from seawater during its geological formation. For standard US phosphate rock, uranium concentrations are 20 ppm to 300 ppm (0.26–3.7 Bq/g) and thorium runs about 1 ppm to 5 ppm.

But certain regions' phosphate rock holds anomalously high uranium concentrations comparable to commercial uranium mines.

Many sites within Morocco's giant deposit complex exceed 100 mg/kg uranium, and most of the world's phosphate rock resource effectively doubles as an "ultra-low-grade uranium deposit."

Splitting of the radioactive isotopes during the wet process

When phosphate rock is dissolved with sulfuric acid in the wet process, these radioactive isotopes show complex partitioning. About 70–90% of the uranium migrates as a soluble species into the phosphoric-acid solution (H₃PO₄) and ends up residing in the fertilizer. The other isotopes — radium-226 (Ra²²⁶), thorium, polonium, lead-210 (Pb²¹⁰) — are insoluble and are concentrated almost entirely within the crystal structure of the by-product gypsum (phosphogypsum, or PG).

When industrial processes unintentionally concentrate radioactive material in this way, the result is called TENORM (technologically enhanced naturally occurring radioactive material).

The huge volume of phosphogypsum (PG) and its environmental management cost

Producing one tonne of phosphoric acid generates roughly 4.5 to 5.5 tonnes of phosphogypsum. In the United States alone, 23 million tonnes of phosphate rock are consumed each year, generating an enormous and unceasing stream of phosphogypsum.

Because phosphogypsum carries large amounts of radioactive material and the heavy metals (cadmium and the like) discussed above, many countries with strict environmental standards — the United States included — strictly prohibit its general-market reuse. As a result, the vast quantities of phosphogypsum with nowhere to go can only be piled in pyramid-shaped artificial mountains within plant boundaries — known as "stacks."

Environmental disaster in Florida: Beneath a phosphogypsum stack covering 700 acres (about 2.8 km²), a giant sinkhole opened (152 feet across, 220 feet deep), and 215 million gallons (about 800 million liters) of strongly acidic, radioactive process wastewater poured at once into the Floridan Aquifer, the state's main drinking-water source — a catastrophic environmental disaster.

[source: US EPA economic model]

The shift to low-grade ore further increases this "waste generated per tonne of phosphoric acid," so environmental-compliance expense will reliably eat into marginal profit and become a structural inflationary force layered onto the fertilizer's product price.

Three costs ride on the same ore at the same time

The progression to lower grades means that

• the cost of cadmium removal,
• the cost of energy, and
• the cost of radioactive-waste handling

all ride on the same ore at the same time.

The high-grade ore of the 20th century carried only small versions of these costs — that is why cheap fertilizer worked. The low-grade ore left to the 21st century is structurally saddled with all three.

Low-grade ore will not become cheap when geopolitics calms or wars end. The physical properties of the rock itself do not change.

"Recycling within the chemical-fertilizer system" — the logic itself does not hold

Here the thought arises: "we should just push recycling." Sewage sludge, food waste, livestock manure — recover the phosphorus we have already used and use it again, and we will not need rock.

But this is not a quantity problem; the logic itself does not hold. All it does is keep the fundamental inefficiency of chemical fertilizer in place while circulating the small recoverable fraction.

Chemical fertilizer (the wet process) delivers only 10–20% plant uptake

Today's main phosphate fertilizers are monoammonium / diammonium phosphate and superphosphate of lime, made by the wet process. When these are applied to soil,

• plant uptake is only 10–20% of the application rate
• the remaining 80–90% binds with iron, aluminum, and calcium in the soil to form insoluble phosphate (legacy phosphorus), fixed in the soil in a form plants cannot use

In other words, chemical fertilizer is a structurally inefficient system from the start.

When we say "recover the phosphorus we have used and recycle it," what can actually be recovered is only "the small fraction of the 10–20% applied that has further passed through the food chain into bodies and excreta." The 80%+ that remained fixed in the soil cannot be retrieved by conventional recovery methods.

The recycling argument is only circulating the small leaked share back through an already inefficient system. The reasoning itself does not reach a fundamental solution.

Fused magnesium phosphate (yōsei rin-pi, FMP) is high-efficiency but energy-intensive

There is an alternative fertilizer designed for higher utilization: fused magnesium phosphate (yōsei rin-pi, FMP).

• A magnesium compound is added and the mix melted at about 1,000–1,500°C
• It contains citrate-soluble phosphate, so plant uptake is high in acidic soils
• Over 50% of applied phosphorus is taken up by plants — clearly more efficient than the wet process's MAP/DAP and superphosphate

Technically this looks like an attractive option. However,

Melting at 1,000–1,500°C requires large amounts of energy. On top of the sulfur-depletion problem (for the wet process) seen in Chapters 1 and 2, in an era when energy itself is rising, the production cost of FMP also rises structurally.

In other words, within the chemical-fertilizer system,

Neither is a sustainable solution in the face of fertilizer constraints, low-grade ore, and rising energy costs.

Even what can be recycled is tiny relative to world demand

On top of that, recycling has its own quantitative limit [source: Diva-portal Phosphorus Story].

• Estimates from a scenario with advanced recycling infrastructure: reductions in phosphorus in animal feed plus recovery from sewage and manure deliver only about 20–30 gigagrams (20,000–30,000 tonnes) of P2O5 per year
• Meanwhile, today's industrial agriculture demands about 43 million tonnes of phosphate fertilizer worldwide each year (P2O5 equivalent), with recent rock production exceeding 200 million tonnes — an enormous scale

The share recycling can supply is only about 0.07% of world demand. And even circulating that "supplied share" does not change the fundamental inefficiency of 10–20% in the chemical-fertilizer system.

In addition, as Chapter 1 showed, sewage-sludge recovery is small in scale and difficult to deploy quickly under PFAS regulation. Food residues and livestock manure are already used in composting and the like, so dramatic increases are unlikely.

The real solution: mobilize "legacy phosphorus in the soil" with mycorrhizal fungi

To restate the points:

• Newly mined phosphate rock — structurally shrinks under low-grade transition and geopolitical risk
• Recycling within the chemical-fertilizer system — only circulates the leaked share while preserving 10–20% inefficiency
• Fused magnesium phosphate — high efficiency but energy-intensive, hits the fossil-fuel constraint
• Synthetic substitutes — impossible, because phosphorus is an element (covered below)

So what is the path?

What is needed is a mechanism that converts the 80%+ legacy phosphorus already accumulated in the soil into a form plants can use.

The implementation of this is biological mining by mycorrhizal fungi (arbuscular mycorrhizal fungi, AM fungi) (treated in detail in Chapter 5). AM fungi secrete enzymes and organic acids to solubilize insoluble phosphate, then deliver it to the plant via their hyphal network.

Where chemical fertilizer is the idea of "adding new from outside," biological mining is the idea of "mobilizing the phosphorus already there." The 80% of legacy phosphorus that decades or a century of chemical fertilizer locked into the soil becomes available to plants again through the work of mycorrhizal fungi — this is the core strategy of this series.

Recycling does not reach. Efficiency improvements within the chemical-fertilizer system (FMP) hit the energy constraint. The remaining path is to use mycorrhizal fungi to mobilize the legacy phosphorus in the soil — that is biological mining.

"Resource cannibalism between agriculture and industry" from LFP-battery demand

On top of the layered cost increases on the supply side, the competitive landscape around phosphate rock has intensified on the demand side as well, locking high prices in more firmly.

Traditionally, about 85–90% of mined phosphate rock has been consumed as agricultural fertilizer. In recent years, however, demand for lithium iron phosphate (LFP) batteries — a kind of lithium-ion battery — has expanded explosively in the electric-vehicle (EV) market, and demand for high-purity industrial- and battery-grade phosphoric acid has surged.

Morocco (the OCP Group), holder of 70% of the world's phosphate-rock reserves, is shifting strategy from raw-rock exports to high-value-added products such as fertilizer and battery materials. In March 2024, the Moroccan government approved a project by China's BTR New Material Group to build a cathode plant near Tangier. The facility will use Morocco's domestic phosphate and cobalt resources, with a plan for initial production of 25,000 tonnes by September 2026, ultimately reaching 50,000 tonnes per year. China, which holds 75% of the global share in refined battery-grade phosphoric acid, is also tightening its grip on phosphorus resources (export restrictions) to support its domestic EV industry.

For fertilizer manufacturers, this new demand from the auto and energy industries means a powerful bidding-loss risk, fueling a scramble for the limited high-quality phosphate rock that is left.

"Synthetic substitutes" do not hold either

One might think, "we will just synthesize phosphorus chemically." But phosphorus is an element. It cannot be made from another element by chemical synthesis.

Producing it from another element through nuclear reactions is in principle possible, but at astronomical energy cost — not something usable in agriculture.

To get phosphorus, you can only take it from phosphorus compounds in the crust — that is, from rock or from biologically accumulated phosphorus (sewage, manure, bones, etc.). This is Earth's physical constraint.

Prices stay structurally high

Putting this together:

• High-grade ore is being depleted
• Remaining low-grade ore carries three additional processing costs
• Recycling can complement, but cannot substitute
• Synthesis at the elemental level is impossible

The result is that the price of phosphate fertilizer stays structurally high. There will be short-term waves, but the long-term trend is upward. We are entering not a temporary shock but the doorway to a long-running era of high prices.

The era of cheap fertilizer was a special time supported by the high-grade ore of the 20th century. That special time is now ending.

This is not a "someday it ends" story. It will not return to low prices. That is this chapter's conclusion.

Upward revisions in the mid-cycle price forecasts of credit-rating agencies

International institutions and credit-rating agencies' forecast models also back this conclusion with data.

The World Bank (October–November 2025 commodity-markets outlook) projects, on the basis of China's export restrictions and continued firm demand, that the fertilizer price index will rise by more than 20% further into 2025, then ease modestly between 2026 and 2027 as new capacity comes online — but will continue to trade far above the 2015–2019 historical average.

Fitch Ratings (March 2025 report), judging that supply tightness will persist for the foreseeable future, revised upward its mid-cycle price assumption for DAP (diammonium phosphate).

[source: Fitch Ratings, March 2025]

What is striking is that even though the price of the raw material — phosphate rock — is forecast to adjust down to around $100, the final-product DAP forecast ($450 → $400) is held at a higher level than before.

This is precisely the demonstration that, as detailed in this chapter, "the enormous processing costs of low-grade ore (cadmium removal, energy consumption, sulfuric-acid consumption, radioactive-waste handling) act as a permanent 'cost wedge' in the rock-to-fertilizer refining process and do not peel off the product price."

Short term (2027) and long term (peak phosphorus) are biting at the same time

Here the discussion of Chapter 1 and this chapter must be integrated on the time axis. The supply constraint on phosphate fertilizer is biting on two timescales — short and long — at the same time.

Short term: in 2027, phosphate fertilizer becomes hard to obtain in Japan

As Chapter 1 showed,

• Prolongation of Iran-related Middle East conflict → paralysis of logistics in the Strait of Hormuz (which carries roughly 1/3 of the world's seaborne fertilizer trade — 16 million tonnes a year)
• On March 14, 2026, China effectively halted exports of urea, DAP, and MAP (through August)
• Force majeure declarations from QatarEnergy — disruption of natural-gas and sulfur supplies
• Government stocks at "2.4 months of supply" (below the 3-month target)
• Domestic inventory begins to bottom out as the autumn 2026 cropping season is consumed

Together, the consequence is:

In 2027, phosphate fertilizer becomes hard to obtain in Japan. The risk that farmers will not be able to buy the quantities they want — falling into an "allocation (rationed-distribution) state" — is extremely high.

This is not a distant story years away. It is a story for next year.

Long term: peak phosphorus (around 2033) and permanent high prices

Even if the short-term Middle East crisis settles, phosphate fertilizer will not return to low prices. As shown in this chapter,

• Peak phosphorus: multiple resource-assessment models project the peak of world phosphate rock production rate around 2033
• About 70% of world reserves are concentrated in Morocco and Western Sahara — geopolitical fragility cannot be structurally resolved
• The triple cost of low-grade ore (cadmium removal, energy, radioactive waste / TENORM) sits on the price of fertilizer as a permanent wedge
• Fitch Ratings (March 2025) revised mid-cycle DAP up to $400/t
• Recycling can substitute only 0.07% of world demand
• Synthetic substitutes are physically impossible (phosphorus is an element)

In short:

Even on the long horizon, phosphorus depletion is severe. Even if the short-term Middle East crisis ends, the world's phosphate fertilizer will not return to low prices. This is a structural and irreversible change.

Both short and long are biting

Aligning the time axes:

Fertilizer runs short in 2027 (short, immediate). Phosphorus depletion is severe even on the long horizon (structural, irreversible). The two are not independent problems but the same structure manifesting in the short and the long term at the same time.

Neither the assumption that "once the short-term wave passes, prices come back down" nor the assumption that "the long-term is peak phosphorus, but for now there is enough" holds. Both short and long are biting.

This is the chapter's final diagnosis. "Then, given this diagnosis, what should we do?" — that is the subject of Chapter 3.

Not a "crisis" but a "transition"

To repeat the framing from Chapter 1.

This is not a crisis. It is a predictable structural change: we are using up the high-grade ore of the 20th century. That the good ore is mined first and the low-grade ore is left for later is natural.

What is happening is not a crisis but a transition — a transition from the era of cheap fertilizer dependent on high-grade ore to something else.

What is that "something else"? Continuing industrial agriculture as it is will not hold under rising prices. That is what the next chapter examines.

References

Academic literature and resource assessments

• "Peak Phosphorus: Clarifying the Key Issues of a Vigorous Debate about Long-Term Phosphorus Security" — MDPI 2071-1050/3/10/2027 (peak phosphorus around 2033)
• "The Story of Phosphorus" — Diva-portal (estimates of recycling limits)
• "Global Phosphorus supply chain dynamics: Sustainability implications for the 21st century" — Diva-portal (EU concentration data, Norge Mining)
• "Risks and Opportunities in the Global Phosphate Rock Market" — HCSS (Morocco / Western Sahara 70% concentration, $21.4 billion world market)
• "Can Your P2O5 Be Commercially Exploited?" — ECI Digital Archives (grade definitions, low-grade slime issue)
• USGS (US Geological Survey), 2010 upward revision of Morocco reserves

Industry reports and price forecasts

• Fitch Ratings, March 2025 report (mid-cycle DAP raised to $400/t)
• US EPA economic model (phosphogypsum-stack maintenance cost estimates)
• International Fertilizer Development Center (IFDC), report on the technical and economic feasibility of cadmium removal

Cost structure and history

• "The Fertilizer Fault Line: The Hidden System That Could Trigger the Next Global Crisis" — Fairobserver.com
• A&L Great Lakes, "Phosphorus Rate Reductions and World Demand Growth"
• Republic of Nauru cadmium-removal facility data (heat-treatment costs, 1992 comparison)

LFP-battery demand

• Morocco OCP × China BTR New Material Group, Tangier cathode plant (approved March 2024)