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of sulphur a year is used by industry, mostly in the form of sulphuric
acid, but there is still an excess. From a peak of $180 a tonne in
1988, sulphur prices have dropped to $36 a tonne this year. To unload
an additional 6 million tonnes on the market would mean the price would
drop to near zero.
But TCO has to do something. It has put in a $54m plant to process the
sulphur into flakes for the Chinese fertiliser market and granules
for the western market. The flakes are already being exported by rail
to China and the granules will be heading west to Black Sea ports for
European and American markets. At most TCO expects to be selling 3,000
tonnes a week next year, but even that vast quantity means the sulphur
mountain will still be growing at 1,000 tonnes a week.
Joel Adamson, whose task it is to address the issue, said: “We have
to take a softly-softly approach. As it is, each tonne we sell makes
a loss, simply because of the distances we have to transport it. To
depress prices further makes no sense, so we are producing a high
quality product at a very low price to try to corner the market. We
hope prices will go back up, but in the meantime we hope to get an
increasing market share so at least we can begin to reduce the size
of the mountain.”
Given the problem facing the existing field, a much larger offshore
field nextdoor operated by Agip will not try to sell its sulphur - but
neither will it create another mountain. Instead it plans to store
millions of tonnes in underground chambers, thereby postponing the
problem indefinitely.
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