Shares in Salt Lake Potash rose almost 5 per cent Thursday on the news of very high recovery rates at its proposed Western Australian potash plant.

The company says tests show potassium recovery of over 92 per cent “is achievable”, sending its shares up to 46c in lunch-time trade.

Salt Lake Potash (ASX: SO4) uses brine from Lake Wells, concentrates it in ponds and extracts from the resulting salt sulphate of potash.

Lake Wells is the company’s only project.

It also said there’s a high chance it will also get magnesium sulphate as a saleable by-product to be used as a crop nutrient.

Potash – the shorthand for potassium-based products – is used in fertiliser. Unlike that other critical component of agricultural additives, phosphate, there is no shortage of potash in the world right now.

Indeed, globally the potash market is oversupplied with prices in 2016 driven to nine-year lows and major producer Potash Crop idling some operations.

It is great news for farmers but less so for potash producers like Salt Lake Potash. In May BHP Billiton announced tentative plans to start production in Western Canada by 2023, while Russian fertiliser maker EuroChem Group plans to start potash production of 1.1 million tonnes from 2018.

The International Fertilizer Organisation says potassium capacity will grow by 20 per cent to touch 65.5 million tonnes by 2021.

Demand, on the other hand, is only expected to rise by 11 per cent to reach 45.6 million tonnes.