CRP PROVIDES UPDATE, COMMENTS ON WORLD FOOD SAFETY ISSUE

NEWS RELEASE 22- 12 July 7, 2022



CHATHAM PROVIDES QUARTERLY UPDATE AND COMMENTS
ON WORLD FOOD SAFETY AND SECURITY ISSUES

WELLINGTON, New Zealand – Chatham Rock Phosphate Limited (TSXV: “NZP” and NZX:
“CRP” or the “Company") is pleased to provide a quarterly update.

World Food Safety & Security

We also wish to discuss the rapidly developing World food security and food safety
concerns and Chatham’s strong strategic position in respect of both.

In a recent International Fertilizer Association announcement (attached) the importance of
recognizing the fundamental importance of fertilizers in securing World food security was
clearly spelt out.

With Russia and Belarus supplying 41% of the world supply of fertilizers and no end in sight
of the conflict in Ukraine, the world is reassessing potential sources of secure and safe
fertilizers.

As mined, rock phosphate is the only source of phosphorus, and access to low cadmium
phosphate rock is an essential part of the realignment of the supply chain to provide safe
fertilizers to feed the world.

Russia was the major supplier of low cadmium phosphate to Europe.

CRP’s focus on low cadmium phosphate in Australia, French Polynesia and New Zealand
projects places it in a unique position to be part of this restructured world supply chain.

While farmers and agronomists talk about the 4R’s for fertilizer addition i.e. right nutrient,
right rate, right time and right place; at CRP we can confirm:

• CRP has the right nutrient – low cadmium phosphate

• CRP has the right rate of supply – developing 2 Mtpa export mine in Queensland,
250,000 tpa mine on Makatea, French Polynesia and 1.5Mtpa phosphate recovery
project Chatham Rise

• CRP is developing its project at the right time – With project development
underway we are matching the current realignment in the world supply chain

• CRP has projects in the right place – Well located projects capable of meeting the
needs of the Indo-Pacific region as well as exporting to Europe

2

In summary... CRP is the right company to become an integral part of the new secure supply
chain to provide safe fertilizers to feed the growing world.

Quarterly Update

Most recently we reported on our successful participation in the Investors Exchange in the
Prospectors & Developers Association of Canada (PDAC) annual conference staged in
Toronto on June 13-15. Chatham was represented by CEO Chris Castle and executive
director Colin Randall. As reported, it was an incredibly busy three days as we met with
dozens of parties interested in either working with Chatham group companies, investing for
the first time, or increasing their existing investment.

The strong forward momentum established at PDAC has continued following the
conference with numerous follow up remote meetings with various parties around the
globe.

Other recent announcements include:

1. The confirmation in April of a significantly oversubscribed private placement which
raised CAD$2,197,753 (NZ$2,520,952). Due to this success Chatham now enjoys its
strongest financial position since the company was established in 2006.

2. Subsequently we announced that we had engaged CSIRO (the Australian
Commonwealth Scientific and Industrial Research Organisation) to evaluate the
potential to extract Rare Earths from our Korella mine and Korella South phosphate
ore using biomining technology. Samples of phosphate and overlying sediments
have been supplied to CSIRO for initial testing. Korella phosphate is enriched with
Rare Earth Elements (REE) and CSIRO will use biomining technology, utilizing
microbes, to study the potential to extract REE. In past exploration of the Korella
deposit the presence of yttrium (Y) mainly in the form of xenotime (YPO
4
) was
identified. The previous explorer Krucible reported an inferred JORC resource of 4.2
million tonnes at 746 g Y/tonne (i.e., 0.96 kg Y
2
O
3
/t). Also, in past exploration other
more valuable heavy REE such as neodymium (Nd) and dysprosium (Dy) were
identified as being associated with the yttrium but no systematic testing for these
additional REE was conducted.

3. In May we announced that CRP subsidiary Avenir Makatea Pty, trading as Korella
Terminals, had commenced a scoping study into a stand-alone 5Mtpa
phosphate/fertilizer export facility in the Port of Townsville (Korella Terminal). This
study is being undertaken by an assembled team of industry specialists who bring
together years of experience in logistics, major capital works construction, port
operations/construction, and financing of new major port/rail facilities for bulk
commodities.

4. At the same time a scoping study for a 2 Mtpa phosphate export mine based on the
Korella South is underway and will underpin the economic basis for the 5Mtpa
export facility in the Port of Townsville.

5. Later that month we provided a further update on the activities now taking place
under the umbrella of our 100% owned subsidiary Pacific Rare Earths Limited (PRE).

3

PRE was originally formed in 2018 to project-manage a Rare Earths Elements (REE)
study on rock phosphate nodules and seafloor muds on the Chatham Rise. PRE is
now coordinating the scoping study for concentration of Total Rare Earth Oxides
(TREO) from our Korella Mine and Korella South Exploration Area. Three Rare Earth
Oxides, Yttrium, neodymium, and dysprosium, described as critical minerals and
Heavy Rare Earth Elements, are found in abundance at Korella and Korella South as
well as Chatham Rise.

6. In June we provided a further update on the Dicalcium Phosphate (DCP)
manufacturing project we announced on 14 January 2022. DCP and derivative
Monocalcium Phosphate (MCP) are essential additives to improve bone growth and
structure in all farmed animals. DCP and MCP are added to the feed ration and are
an important ingredient in supplemental feeding. Samples had been sent in
February to phosphate technology specialists Prayon SA for testing to establish the
parameters for production of DCP through their “GetMoreP” technology. Prayon
undertook tests in accordance with the standard appraisal protocols for the
GetMoreP™ process. Initial test work suggests, with slight modifications using their
process technology suite, low-grade Korella phosphate is a suitable feedstock for
MCP production with European Union acceptable fluorine levels.

7. Most recently we reported further on the acquisition of the fully permitted Korella
phosphate mine in Queensland, Australia with its ability to generate positive cash
flows starting in 2022. We still expect acquisition documentation will be completed
and executed in the near future.


For more information contact Chris Castle on 021 558 185 or chris@widespread.co.nz or
check out www.rockphosphate.co.nz

Neither the Exchange, its Regulation Service Provider (as that term is defined under the policies of the
Exchange), or NZX Limited has in any way passed upon the merits of the Transaction and associated
transactions, and has neither approved nor disapproved of the contents of this press release.

An unfolding food crisis: a perspective
from the fertiliser industry
Fertilisers are a vital ingredient for feeding
the world sustainably
To understand the importance of fertilisers in this scenario, think of fertilisers
as food for plants. Just like people, plants need nutrients to grow and thrive.
Nitrogen-based ammonia fertilisers and the mineral fertilisers, phosphate
and potash (potassium), which are processed from mineral deposits taken
from the ground, are often referred to as N, P and K. It is a widespread
practice of farmers and agronomists to apply the right nutrient source, at
the right rate, at the right time and in the right place (the ‘4R’ approach).
Combinations of fertiliser applications vary, depending on the type of crop,
the soil at the farm, local climate conditions, geography and so on. Organic
fertiliser (manure, for example) has a role too; although, not at a scale to
provide the high yields necessary to feed billions and not within planetary
boundaries for methane. If farmers do not apply fertilisers, their crop yields
go down - and with the main exception of legumes, which can get one
of the nutrients, nitrogen, from the air by themselves, all crops need plant
nutrients. The efficient production, distribution and use of plant nutrients
including mineral fertilisers are essential to the global food system.
The war in Ukraine is the biggest geopolitical
disruption to hit the global fertiliser market
in decades
Global fertiliser market facts
Fertilisers are consumed in almost every country. The largest suppliers
are countries which have the relevant raw materials needed for fertiliser
production, as follows:
• For nitrogen, the raw material is hydrogen, typically from natural gas
or coal (the trend in fertiliser production is to move toward low-carbon
and ultimately net-zero emissions, using renewable energy and
innovative recycling techniques). In 2020, global nitrogen production
totalled 85 million tonnes (Mt) of ammonia. The top four producing
countries were China, Russia, USA and India.
• Gross phosphoric acid production can be used as a proxy for total
processed phosphate production. Global processed phosphate
production totaled 87Mt of phosphoric acid. In 2020 China, Morocco,
USA and Russia led production.
• Global potash production was 71Mt in 2020 and the top producers were
Canada, Russia, Belarus and China.
• The top five ammonia fertiliser producing countries accounted for 61%
of the world total in 2020. For phosphoric acid and potash, the top five
countries accounted for 79% and 85% respectively. See figure 1.
Global fertiliser prices are market-driven and determined by the balance
between supply and demand among other factors such as export restrictions,
logistics constraints and the time of year in the agricultural cycle of planting
and harvesting (‘seasonality’). The war in Ukraine is the biggest geopolitical
disruption to hit the global fertiliser market in decades.
The role of Russia, Ukraine and Belarus in fertilisers
The war in Ukraine is having several repercussions on the fertiliser supply
chain. Russia is a major player in global fertiliser trade, and international
sanctions on Russian individuals, entities and financial transactions have
disrupted the flow of many commodities, including nitrogen, phosphate and
potash fertilisers. This trade disruption from Russia alone has halted 14% of
the urea volumes traded globally, 11% of ammoniated phosphates trade and
21% of global potash trade. Russia also supplies 23% of the world’s traded
volume of ammonia and 46% of the ammonium nitrate trade.
Add to the picture Belarus, sanctions on which have restricted a further 20%
of global potash trade, resulting in a disruption of 41% of world supply. To
replace this volume is not easy, despite other producing countries ramping
up supply as quickly as they can. Potash comes from deep mines and
bringing capacity online takes years; in fact, across the inorganic fertilisers it
can take from three to up to 10 years to reach that point. See figure 2.
Some of the largest fertiliser consuming regions import significant volumes
from Russia and Belarus. While some regions may be able to turn to
alternative suppliers, global supply outside of Russia and Belarus is
definitively not enough to satisfy global demand. Europe, Latin America and
South Asia are most exposed in volume terms. See figure 3.
Sanctions on Russia have also led to record high gas prices in Europe,
which has been passed through to fertiliser production costs. Natural gas
accounts for 70-80% of nitrogen fertiliser production costs, and spiraling gas
prices have led to unsustainably high costs for European nitrogen fertiliser
producers - reinforcing the case for decarbonising the fertiliser and other
sectors, already a driver in response to climate change.
The war in Ukraine has placed a cloud of uncertainty over the Black Sea
ports and shipping, coupled with sky-high insurance premiums and barriers
to financing and payments due to sanctions on financial transactions.
Precise information is difficult to obtain, but it is safe to say that this year
will not be the usual planting season in Ukraine and farmers elsewhere in the
northern hemisphere are concerned about implications for the 2023 season.
A precarious balance
In 2021, Russia or Ukraine (or both) were in the top three global exporters of
wheat, maize, rapeseed, sunflower seeds and sunflower oil, according to the
FAO, which also states that most of the countries that are highly dependent
GLOBAL FERTILISER MARKET
8
One hundred years ago, the world was in a global food shortage. The discovery in the
early 1900s of an efficient process for making ammonia out of hydrogen and the nitrogen
that is in the air led to the production of nitrogen-based fertilisers. This innovation vastly
expanded the availability of food such that today mineral fertilisers are responsible for
half of the food we eat. But now conflict in Europe is interrupting the availability of
agricultural commodities including fertilisers, weakening a global food system already
stressed by the effects of climate change and the Covid-19 pandemic, and prompting
calls for action to mitigate a growing food crisis, especially in emerging markets.
By Alzbeta Klein, CEO/Director General, International Fertilizer Association

GLOBAL FERTILISER MARKET
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on imported foodstuffs rely on Ukrainian and Russian food supplies. Russia
is the world’s largest exporter of wheat. In addition, the World Food
Programme says that over the past 10 years Ukraine has become its biggest
supplier of foods such as sunflower oil.
These and other statistics point to serious shortfalls in food supplies. At
times like this, it is common for governments to restrict exports of strategic
commodities and products. It was already the case during the Covid-19
pandemic and was a feature of previous food crises. The International
Fertilizer Association (IFA) is apolitical; we describe what we see and reflect
on experiences from the past. While solutions to replacing production
capacity are long-term, steps can be taken now to mitigate the situation.
These include eliminating export restrictions, as the FAO has called for, and
governments with surplus stocks in vegetable oils and grains, among others,
to release some of their surplus on world markets, as the WTO advocates.
IFA members are bringing on supply and tackling distribution challenges
where they can.
And last but not least, it is time to make fertilisers essential goods. Mineral
fertilisers are precursors to wheat, soy, corn and many other everyday
staples. Without fertilisers, there will be limited production of staple
commodities and food. Fertilisers were declared essential during the
pandemic by many countries, and now it is time to do so for all.
Brazil launched a national fertiliser plan in March aiming to reduce
the country’s dependence on imports from just under 85% to around
45% by 2050. With concerns about fertiliser supplies for the 2022/23
crops, short term actions include the launch of the “Caravana Embrapa
FertBrasil” which aims to increase efficiency in fertiliser application and
reduce usage by around 20% for the next crop. For the longer term the
government aims to encourage investment in the production of natural
gas, the raw material for nitrogenous fertilisers, as well as increasing
domestic production of potash and phosphates.
The EU has a medium-term objective of reducing fertiliser usage by 20%
by 2030 under its Farm to Fork Strategy. The EU Commission issued a
Communication in March on “Safeguarding food security and reinforcing
the resilience of food systems”. Short-term plans include the provision of
direct aid to farmers to cover increased input costs and to EU ammonia
manufacturers to subsidise raw material costs. It states that free trade
agreements already in place should facilitate the replacement of Russia
and Belarus for potash and phosphate imports. Those two countries
currently account for 60% and 35% respectively of EU imports of potash
and phosphates. In the longer term, the Commission is encouraging farmers
to prioritise the efficient use of fertilisers and decrease their usage through
practices such as precision and organic farming and agro-ecology,
and also to encourage research and innovation into the substitution of
synthetic fertilisers and development of greener production methods.
The US government in March announced it would support additional
fertiliser production for US farmers to address rising costs. The USDA will
provide $250M through a new grant programme to support domestic,
independent, innovative and sustainable fertiliser production to supply
US farmers. “Recent supply chain disruptions...have shown just how
important it is to invest in this crucial link in the agricultural supply chain
here at home,” said Agriculture Secretary Tom Vilsack. A public inquiry
has also been launched on the competitive nature of the markets in
fertiliser, seeds, other agricultural inputs and retail.
The International Fertilizer Association (IFA) is the only global fertiliser association, with some 400 members in approximately 70 countries and a mission to
promote the efficient and responsible production, distribution and use of plant nutrients. The mission plays a critical role in helping to feed the world sustainably.
Figure 1: The countries with the largest production of fertilisers are dictated by the presence and economics of the relevant raw materials
(Production by country, million tonnes product, 2020)
Figure 2: Russia, Belarus and Ukraine are major suppliers
to global nitrogen and potash trade
(% share of global trade, 2020)
Figure 3: Europe, Latin America and South Asia are highly exposed to
imports from Russia, Belarus and Ukraine
(Imports by source, million tonnes product, 2020)
Countries addressing the fertiliser situation
Most nations that produce food have had to reassess their domestic fertiliser markets, to ensure the soaring
input costs do not limit production at a time when food supply is also compromised. Some examples are:
60
40
20
0
100%
75%
50%
25%
0%
20
15
10
5
0
AmmoniaUreaANPhosphate
Rock
MAPDAPPotash
Russia Ukraine Belarus Rest of World
Rus+Bel+Ukr Rest of World
West
Europe
AfricaNorth
America
South
Asia
Central
Europe
West
Asia
Latin
America
East
Asia
Oceania
Urea
MAP+DAP
MOP
Urea
MAP+DAP
MOP
Urea
MAP+DAP
MOP
Urea
MAP+DAP
MOP
Urea
MAP+DAP
MOP
Urea
MAP+DAP
MOP
Urea
MAP+DAP
MOP
Urea
MAP+DAP
MOP
Urea
MAP+DAP
MOP
40
30
20
10
0
30
20
10
0
AmmoniaPhoshoric AcidPotash
China
Russia
U.S.A.
India
Indonesia
Saudi Arabia
Egypt
Trinidad
Canada
Iran
Rest of World
China
Morocco
U.S.A.
Russia
Saudi Arabia
India
Brazil
Jordan
Mexico
Israel
Rest of World
Canada
Russia
Belarus
China
Germany
Israel
Jordan
Chile
Laos
Brazil
Rest of World