Unlike some industrial minerals, which are unique to certain
areas of the Earth, soda ash, or sodium carbonate, is mined and
produced all over the world. Indeed, at least 95 natural sodium
carbonate deposits have been identified globally - yet not all
of these have been quantified.
There are two types of soda ash -
natural and synthetic. The former is obtained from trona and
sodium carbonate-rich brines, while the latter can be
manufactured from salt and limestone, a process which is often
more cost-intensive and can generate environmentally damaging
Both forms of soda ash are used for
end-use solutions of glass, detergents, chemicals and
In terms of global soda ash supply,
China continued to dominate in 2012, producing 23m tonnes in
2011, according to data from the US Geological Survey (USGS).
The majority of this supply was synthetic soda ash.
China was followed by the US, which
produced 10.9m tonnes in 2012, with a total value of
approximately $1.6bn. The US has approximately 23bn tonnes
proven natural soda ash reserves.
Turkey produced 1.6m tonnes in
2012, Botswana produced 250,000 tonnes and Kenya produced
600,000 tonnes, USGS figures show. Other countries contributed
260m, making a world natural rounded total of 24bn.
While China leads the way in terms
of soda ash production, the majority of this supply is
synthetic - which is currently more expensive to provide and
less environmentally friendly due to the waste generated during
the manufacturing process.
However, while China has, to date,
been the major producer of synthetic soda ash, the
countrys Bureau of Geology and Mineral Exploration of
Henan Province has recently announced the discovery of a large
trona soda ash deposit in Tongbai County in Nanyang, Henan,
If the reports on this deposit are
substantiated, it could become the largest trona deposit in
Asia with 72m tonnes of identified resources, with an
additional 100m tonnes trona mixed with mirabilite, the USGS
This development could strengthen
Chinas position as the worlds largest supplier of
soda ash, but its progression in the soda ash market has caused
some controversy overseas due to the help it receives from the
Soda ash producers in China
currently receive a 9% rebate on the 17% value-added tax on
Chinese soda ash exports, providing them with a significant
advantage over US suppliers, who believe the differential VAT
rebates encourage the overproduction and export of soda
On 2 April 2012, John M Andrews,
president and CEO at ANSAC, the worlds largest soda ash
exporter, wrote to US Trade Representative Ron Kirk,
emphasising the need for the Obama Administration to continue
to focus on Chinas industrial policies that rely on
trade-distorting government actions to promote or protect
Chinas state-owned enterprises.
Andrews noted that nearly 50%
of Chinas soda ash capacity comes from producers that are
either fully or partially state-owned, including two of its
four producers. These producers allow China to overcome
the comparative advantage US soda ash producers have with
serious implications in third-country markets, he
The US holds the worlds
largest discovered deposit of trona, located in the Green River
Basin of Wyoming. This site is home to four companies,
operating from five plants, who together have the opportunity
to work with an estimated 56bn tonnes bedded trona at the site,
where 47bn tonnes of identified soda ash resources could be
The mineral resource sits within
47bn tonnes of interbedded or intermixed trona and halite in
beds more than 1.2 meters thick. These resources are being
depleted at the rate of about 15m tpa, producing 8.3m tonnes of
soda ash, according to the USGS.
Searles Lake and Owens Lake in
California, US, also contain large quantities of soda ash at
estimated 815m tonnes reserves.
While the US contains this large
resource, the competitive advantage China holds due to the VAT
rebates has been noted. This issue has for several years been a
priority to the United States Congress and has also been the
subject of discussions on numerous bilateral
government-to-government agendas, including the Joint
Commission on Commerce and Trade (JCCT).
Following these discussions, US
soda ash producers found at the beginning of 2013 that they
could gain equal footing with Chinese competitors following the
introduction of a bipartisan bill that would provide the US
soda ash industry with temporary royalty relief.
Congresswoman Cynthia Lummis
introduced the American Soda Ash Competitiveness Act bill on 5
March, to reduce temporarily the royalty required to be
paid for sodium produced on Federal lands, and for other
The royalty rate on the
quantity or gross value of the output of sodium compounds and
related products at the point of shipment to market from
Federal land in the five-year period beginning on the date of
enactment of this act shall be 2%, the bill outlined.
A similar bill last year made it
out of the Natural Resources Committee on a bipartisan vote.
That same committee held a hearing on 21 March to discuss the
merits of this legislation prior to a mark-up being held later
Turkey is leading soda ash
development within Europe having produced 1.6m tonnes in 2012
and 1.5m tonnes soda ash the year before. The country holds
more than 200m tonnes of soda ash reserves, according to USGS
China continues to lead the
way for new capacity coming on-stream and Turkey has emerged as
a new player with good access to European and Middle Eastern
markets, Dennis Kostick, a former soda ash specialist at
the USGS, told IM.
The countrys Ciner Group
signed a $1.35bn-deal with China Tianchen Engineering Corp.
(TCC) in January to build the worlds biggest soda ash
facility in Turkeys capital city, Ankara.
The production facility, which will
produce 2.5m tpa dense soda ash and 200,000 tpa sodium
bicarbonate, is expected to be up-and-running by early
With this investment, finally
a Turkish industry company will be the number one in its
segment in the whole world, Turgay Ciner, Ciner Group
president, said during the signing ceremony.
Ciner currently produces soda ash
at its subsidiary Eti Soda in Ankaras Beypazari district.
The capital city is home to the worlds second-largest
trona reserves, at 1.34bn tonnes, after Wyoming, US. Eti Soda
has exported $1bn worth of soda ash to 53 countries since 2009
and expects the new facility to increase this amount to $1.75bn
per annum. The project, which will be located in Ankaras
Kazan district, will be financed with project loans from
Chinese banks and be powered by natural gas.
Ciner also revealed that several
supply contracts have already been negotiated.
Three of our biggest
customers have signed a contract with us to purchase natural
soda ash from us until 2023 [É] I cannot disclose their
names, but new companies could be added to this list, he
Belarus could soon make its way
onto the global soda ash market under a joint-venture agreement
with Russia, according to the Belarus Architecture and
Construction Minister, Anatoly Nichkasov.
Speaking at a press conference in
Minsk in February, Nichkasov said the soda ash can be sold both
in Belarus and in the neighbouring countries.
We will team up with Russian
partners to set up a Russia-Belarus transnational company
manufacturing [soda ash], Nichkasov said.
Belarus previously signed an
agreement with Chinese investor CNCEC in 2010 to help fund the
construction of a soda ash plant in the Mozyr District of Gomel
Oblast, southern Belarus. Chinese CNCEC was set to fund the
300,000 tpa facility, which was designed to produce soda ash
for both domestic and international use.
The Mozyr District is home to the
largest rock salt deposits in Belarus, with estimated reserves
thought to be around the 22bn tonne mark. Belarus later penned
a further agreement with Bashkortostan, a federal subject of
There is an opportunity to
build a plant with 300,000 tpa capacity, with the potential to
reach 600,000 tpa capacity, to cover the demands of the
European region, Belarusian Prime Minister Mikhail
Myasnikovich told reporters in June last year.
This area is completely new
to us. We are pleased that our colleagues from Bashkortostan
have agreed, even at the initial phase of the project, to
provide engineering support, so the project does not go off
track [É] Belarus has the investment [for this
project], he added.
Six unnamed companies located
outside of Tanzania have placed bids to set up a $500m soda ash
plant at the countrys Lake Natron, according to its
National Development Corp. (NDC).
Interest in developing a soda ash
plant at the Lake Natron site has been building for several
years due to the Lakes soda ash reserves, which are
thought to be around 4.7bn cubic metres. The deposit holds the
potential to produce 1m tpa soda ash, bringing significant
financi al benefit to the local area.
The wetland management plan and
environmental assessment study for the proposed project are due
to be completed by June 2013, according to the NDC. However,
previous plans to develop the site have been stopped due to
environmental protest as the site is located on the nesting
ground for around 33% of the worlds lesser flamingo
Previous bids for the project
include India-based Tata Chemical Industries Ltd, which
submitted a proposal to the Tanzanian government in 2006 for a
$450m, 500,000 tpa soda ash factory. The company produces more
than 5m tonnes of soda ash, both light and dense grades
(together with some speciality grades) with a balanced
portfolio of natural and synthetic production.
As is the case with many industrial
minerals, the supply and demand of soda ash is driven, on a
global scale, by its end-use markets. These include glass,
detergents, chemicals, pulp and paper, and water treatment.
The glass market used 48% of the US
soda ash supply last year, according to USGS 2011 reported
data, while chemicals used 29%; detergents 8%; distributors 6%;
flue gas desulphurisation and miscellaneous uses 3% each; pulp
and paper 2%; and water treatment 1%.
Glass is [soda ashs]
biggest market and is stable; detergents is the second [biggest
market] directly or indirectly (sodium silicate, sodium
percarbonate) and is increasing (2-3% per year [due to the] ban
of sodium tripolyphosphate), Novacarb, Euorpe-based soda
ash specialist, told IM.
Glass was hit hard by a crash in
the global housing market during the period 2008-2012, as well
as a dip in automobile manufacturing, which significantly
reduced the demand for soda ash.
However, the global economic state
is now improving, which has in turn buoyed the soda ash supply
situation, with soda ash suppliers around the world noting
improved demand for their products.
Demand in most mature markets
was under some degree of stress, whereas in developing, growth
markets, demand remained healthy, though somewhat below
historical growth rates. All markets, however, are now reviving
and the supply-demand balance across geographies is
restoring, Zarir N Langrana, Tata Chemicals
Business COO, told IM.
Strong fundamental growth in
the developing regions of the world will continue to drive
growth for this essential product, which is the building block
for many key industries that are linked to economic growth and
urbanisation. New applications for the product are also being
seen in certain emerging sectors, he added.
Solvay, which produces soda ash as
part of its Essential Chemicals business, added that soda ash
demand growth is directly linked to the dynamism of the
soda ash main markets. We are seeing a slowdown in Europe,
whilst an acceleration growth in others countries.
Demand for soda ash in
fast-growing markets - North America, eastern Europe, Africa
and Middle East - is dynamic, while demand is weak and
depressed in western and southern Europe, Pascal
Jury, Solvay's Essential Chemical president, told
Soda ash serves resilient
consumer-good-end markets, with exposure to new housing
construction and auto industry. Even if at this time [when] the
consumption market is still below our expectations, we do
believe there is a window of opportunity in fast-growing
countries, he added.
While soda ash demand is improving
in some areas of the world, the situation is not so positive in
Australia. Penrice Soda Holdings Ltd, one of the countrys
leading suppliers, has announced that it will close its
Adelaide-based soda ash manufacturing facility in June this
year after experiencing increasingly difficult domestic
According to Penrice, the strength
of the Australian dollar, lower international shipping costs,
increased energy and labour costs and increasing taxes, have
all made the import of soda ash more than 40% cheaper than
These same pressures are also
playing out across Penrices soda ash customer base
[É] Penrice does not see any significant change to these
factors occurring in the foreseeable future, the company
These factors have combined
to reduce the profitability of Penrices soda ash
business, which continues to make a considerable loss in
financial year 2013. The uncertainty [É] has led the
company to decide to import soda ash rather than manufacture
it, it added.
In line with its strategy to begin
importing soda ash into Australia, Penrice has signed a
memorandum of understanding (MoU) with SASS Victoria Australia
Ptd Ltd (SASS), a subsidiary of Dutch company Soda Ash Holding
Co, which is the worlds largest independent distributor
of soda ash per year.
The joint venture (JV) will be
split between SASS and Penrice, with share ownership of 67% and
33% respectively, over a minimum period of six years. SASS will
provide Penrice will an Australian dollar (A)$8m ($8.4m*) loan
to fund the cost of transition.
The soda ash for the JV will be
sourced from ANSAC, which imports around 4m tpa natural soda
Soda ash pricing levels have also
been largely impacted by the global economic state, as low
demand pushed prices down. Now, as the economy begins to
recover, prices are levelling out and are expected to improve
as the year progresses.
Pricing in most markets have
remained stable, with some markets beginning to show an upward
sustainable trend, Tata Chemicals told
Prices in Europe and North
America have increased modestly on average, reflecting higher
input costs, Solvay added.
Global trade markets have
seen some price decreases, starting with South-East Asia, where
supply has exceeded demand in a context of growth slowdown.
However, prices are already rebounding in Asia, as demand
levels improve, Solvay told IM.
Novacarb agreed with this,
outlining that stability remained during the period 2012 to
2013 for its big accounts, which saw a slight increase in price
of Û5-10/tonne ($6-13/tonne), while for its smaller
accounts, a potential increase of Û15-20/tonne is
possible if demand continues to recover. The company produces
light, dense, dense coarse and light pharma-grade soda ash for
distribution in France, Germany, Benelux and Switzerland.
Prices for natural soda ash are
expected to continue to hold an advantage over synthetic soda
ash, according to FMC Corp., although synthetic producers are
expected to work to close this gap.
Solvay, a worldwide supplier of
both natural (US-produced) and synthetic (Europe-produced) soda
ash, told IM that it will continue to
reinforce the competitiveness of its synthetic-based soda ash
plants to supply Europe demand and the global trade
prices for soda ash, as of 19 April, can be seen in table 2
Looking ahead, soda ash producers
are anticipating an increase in natural soda ash production as
demand continues to increase, as well as an increase in the
competitiveness of synthetic product.
capacity in the world, the most competitive way to obtain soda
ash, will increase and represent about a third of total demand.
Further growth is not forecasted. Synthetic production is,
therefore, necessary to supply the market, Solvay told
Solvay has highly-productive
operations in Europe, that can compete effectively in the
market place. Productivity plans are being developed to further
improve competitiveness. Market outlook shows opportunities for
large-scale competitive operations, the company
However, while the market is
expected to rise to pre-crisis levels, soda ash producers are
not without their restrictions.
One of the main challenges soda ash
faces, as with many minerals, is high logistics costs. Due to
its high bulk and low-cost value, the minerals transport
costs are an unwelcome problem, most notably in China.
Novacarb described the soda ash
market as a global business with local constraints due to
high logistic costs, adding that, at present,
transportation makes up approximately 20% of the minerals
The soda ash business is
Capex intensive and has high fixed costs, so the 2008/2009 and
the new, mid-2012 crisis [are making it difficult to maintain
our plant], the company told IM.
Despite these challenges, producers
Increasing urbanisation and
the emphasis on sustainability, in its broadest aspect across
consumer and producer sectors, will be key factors that would
drive future growth, Tata Chemicals said.
The market for soda ash, both
in the medium-and long-term, continues to remain healthy and
optimistic for both producers and consumers of this vital
essential product, the company added.
* Calculated April 2013
Sodium bicarbonate is used as a household consumer product and
is manufactured by percolating CO2 gas through a
carbonation tower containing a soda ash solution.
Sodium bicarbonate is a chemical
compound with the formula NaHCO3 and is a white
solid that is crystalline but often appears as a fine powder.
Approximately 0.68 tonnes soda ash is needed to make one tonne
Leading producers of sodium
bicarbonate include FMC Corp., Solvay, Tata Chemicals, Energi
Group, Novacarb and Penrice Soda. This list is not exhaustive,
The market for sodium bicarbonate
was only mildly affected by the economic downturn as its
end-use markets remained stable. Demand is expected to continue
to grow as new applications are found.
Solvay, a leading position in
sodium bicarbonate in Europe and North America, agreed.
Solvays marketing and
manufacturing actions will continue to grow in this market in
Europe and in the rest of the world, through the growth of
existing markets in line with mega trends (de-pollution, health
and so forth) and the development of new applications, it
The sodium bicarbonate market is growing at a rate of around
5-6% each year thanks to growing demand from the animal feed,
food, flue gas treatment and pharmacy markets, according to
Pakistan Customs Regulation
In Pakistan, the directorate general of Customs Valuation in
Karachi has revised the customs value on imports of soda ash.
Soda ash will now be assessed for import duties with the
customs value of $265/tonne for synthetic dense soda ash,
$255/tonne for synthetic light soda ash and $250/tonne for
natural dense light soda ash.
The updated valuation ruling was
necessary in order to reflect the upwards price trend of soda
ash in the international markets, the directorate said.
Following meetings between the customs valuation department and
soda ash stakeholders, it was agreed that the customs
value for soda ash needed to be revised as the international
price of the mineral had increased since import duties were set
three months ago.
The valuation ruling added that if
the price trend of soda ash changed direction during the 90-day
period following the date of the ruling, stakeholders could
seek a further revision, subject to sufficient documentary
The India Finance Ministry in June
last year imposed definitive anti-dumping duties on soda ash
imports from China, the EU, the US, Iran, Pakistan, Kenya and
The Revenue Department set a period
of five years for the anti-dumping duty, following a petition
filed by the Alkali Manufacturers Association of India. The
anti-dumping duty was set at a range of $2.38-$38.79/tonne,
depending on the manufacturer and country of export.
The Indian government first said in September 2011 that it
was planning to impose anti-dumping duties on soda ash, but set
levels at a range of $11.55-$38.38/tonne. In that same year,
the Detergent Manufacturers Association of India lobbied to
keep dumping duty low.