Key Takeaways:
- Itafos has undergone a major financial transformation, eliminating over $150 million in debt since 2020 under David Delaney’s leadership. Itafos is now net debt-free and positioned for long-term stability and growth, a significant shift from its challenged state just five years ago.
- China’s sharp reduction in phosphate exports—falling from 10 million tons to a projected 3.5 million tons in 2025—has drastically altered global supply chains, tightening markets and creating opportunities for other producers like Itafos and OCP.
- Domestic phosphate production in Brazil is increasingly crucial, with Itafos expanding its operations in Tocantins. Itafos’ proximity to farmers and its product mix are well-suited to the needs of high-growth regions such as Bahia.
- Over the last three and a half years, phosphate has been under-applied by an estimated 10 million tons on a global basis, raising concerns about long-term soil fertility and future crop yields amid growing food demand.
- Limited global phosphate fertilizer production capacity additions are expected due to the high cost of development (estimated at $6 billion for a 1-million-ton vertically integrated facility) and lengthy permitting processes. This is likely to keep the market tight for years to come.
Itafos’ Transformation: From Crisis to Stability
Itafos, once in a precarious financial state with over $150 million in debt, has executed a noteworthy turnaround since 2020. Under the leadership of its Chief Executive Officer, David Delaney, Itafos has transitioned from survival mode to strategic expansion, particularly in its vertically integrated phosphate operations in Idaho, USA, and Tocantins, Brazil.
“We were on our heels,” Delaney said, reflecting on the company’s early years when Itafos acquired the Conda, Idaho operation during a low point in global fertilizer markets. Challenges in bringing plants online, compounded by low grain and fertilizer prices and increased competition from Moroccan producers, left the company vulnerable. However, the acquisition of Conda proved pivotal, anchoring Itafos with a reliable North American asset base.
Between 2017 and 2020, Delaney served on the Itafos board before stepping into the CEO role at the end of 2020. His entry coincided with significant macro shifts, including USDA revisions to corn inventories and surging demand from China. This, alongside global supply constraints and rising prices for key crops, marked the beginning of a multi-year upswing in agricultural input markets.
Commodity Price Resurgence and Its Ripple Effects
The recovery in phosphate prices was accelerated by several global events. Rising Chinese corn imports in 2021, followed by the disruption of global fertilizer trade after Russia’s 2022 invasion of Ukraine, triggered a steep increase in prices. “We made over $200 million in EBITDA in 2022,” Delaney noted, “which allowed us to significantly reduce our debt burden.”
These windfalls were timely. Itafos secured a new mine permit in Idaho, with identified resources through 2037. In Brazil, the company began rebuilding operations at its site in Tocantins, restarting its sulfuric acid plant and introducing differentiated phosphate products suitable for high-productivity farming regions like Bahia.
Adapting to Global Shifts in Phosphate Trade
A key theme throughout the conversation was the sharp decline in China’s phosphate exports. Traditionally a dominant player, China has diverted P205 resources towards electric vehicle battery production and domestic farmers, significantly reducing its contribution to global DAP and MAP supply. “They’ve gone from exporting 10 million tons annually to just 3.5 million tons expected this year,” Delaney said, adding that no other producer has the capacity to fully compensate for this shortfall.
OCP in Morocco, which holds roughly 70% of the world’s phosphate rock reserves, has increased output, and is estimated to be running its phosphoric acid plants at utilization rates over 90% of total capacity. Delaney estimates that over the last three and half years, global phosphate application has fallen short by approximately 10 million tons on a DAP/MAP equivalent basis—a trend that could impact crop yields if not corrected.
Brazil: Expanding Domestic Production to Reduce Import Dependence
In Brazil, which imports roughly 85% of its phosphate, Itafos’ investments in its Arraias Plant located in Tocantins are being met with strong market enthusiasm. Delaney recently attended the Bahia Farm Show, where interest in the company’s direct-application rock, partially acidulated products, and upcoming SSP (Single Super Phosphate) production was evident. “Brazilian farmers are very receptive. They need nearby, reliable sources of phosphate.”
Itafos expects to restart its SSP plant in 2027, with beneficiation scheduled to begin in late 2026. With granulation production already resumed, these efforts support Brazil’s expanding double- and triple-cropping systems, particularly in high-growth states like Bahia. Delaney noted that in some areas, farmers achieve more than two crops per year.
Limited Capacity Growth Amid Structural Constraints
Looking at global supply, Delaney emphasized that new phosphate production is constrained by both capital costs and regulatory barriers. “To build a new vertically integrated million-ton operation today costs around $6 billion,” he said. “And permitting alone can take over a decade in certain jurisdictions.”
The U.S. phosphate sector has consolidated significantly. From 18 firms operating 22 facilities in 1990, the industry has shrunk to four companies managing just 10 facilities today. With one Florida site expected to run out of ore by 2030, supply-side pressure may intensify.
“We need the remaining producers to succeed,” Delaney urged. “Especially in the U.S., where permitting in regions like Florida is increasingly complex due to population growth near mine sites.”
A Global Imperative for Crop Nutrition
Beyond the corporate story, Delaney underscored a broader global context. “We need a big crop every year,” he said. “With 8.2 billion people today and 9.7 billion by 2050, we can’t afford yield stagnation.”
Emerging economies such as Bangladesh, Ethiopia, and Pakistan are expanding phosphate purchases, while traditional importing giants like India continue to struggle with low inventories. Global fertilizer application must grow to keep pace with food demand, he argued. “Without fertilizer, 60% of the world would likely starve.”
Delaney also challenged public misconceptions. “People think fertilizer is a harmful chemical. But phosphate is plant food. It supports photosynthesis, seed development, root health—all of which are fundamental to food security.”
David Delaney Looking to 2030 and Beyond
Looking ahead, Itafos aims to be producing SSP in Brazil, with the possibility of expanding its greenfield Santana project. In Idaho, Itafos is investing tens of millions into exploration to convert additional leases into permitted reserves, aiming to secure production for decades.
In Africa, the company is exploring options to develop its project in Guinea-Bissau, either independently or through partnerships. “I hope we have a solution there within five years,” said Delaney.
He closed on a forward-looking note. “Phosphate is finally in a position where it can sustain investment. If prices remain supportive, Itafos will continue to grow, remain financially strong, and be part of the global solution to feed the world.”
