Venture eager to mine potash

Michigan potash deposit could mean millions to the state and provide a nearby source for growers.

Michigan, with all its great natural resources, has yet another bragging right. Northeast of Big Rapids in the small town of Evart, the Michigan Potash Co. is looking to mine a rock called the Borgen Bed, which lies a mile and half below the surface.

This rock is potash, a potassium-rich salt commodity valuable as a crop fertilizer, and it is the purest known on earth today, according to a report by the U.S. Geological Survey

Covering 15,000 acres, the bed spans over Osceola and Mecosta counties. Company officials say it has the potential to reduce imports of potash, improve the nation’s trade balance, create jobs, greatly increase the state’s tax base, improve the rural economy and provide farmers with an easily accessible U.S. product.

The Environmental Protection Agency approved Michigan Potash Co.’s permits for solution mining and injection wells in 2016 and 2017. However, separate permitting is required by the Michigan Department of Environmental Quality, which held a public hearing and took comments this spring.

If the project is approved this summer, MPC hopes to break ground on a $700 million potash extraction and processing operation, according to Theodore Pagano, a potash geologist, engineer and general manager at MPC.

The company has already secured mineral rights from 450 families, who will receive royalties. Construction is expected to take 30 months and employ 300 workers. Once on line, the plant will offer 170 full-time jobs and will initially produce upward of 650,000 tons of potash annually.

“This is arguably one of North American’s most significant rediscoveries in many, many years,” Pagano says.

He calls it a “rediscovery” because the potash reserve was discovered during an exploration in the early 1980s.

“Having a deposit is nice, but you have to be able to deploy it — access it in a way that protects land, life and resources; otherwise, it’s not worth having,” Pagano says.

Digging in
Finding a way to bring it to the surface would come in the late 1980s, when solution-extraction technology was brought to the state by Pittsburg Plate Glass’ Kalium team based out of Canada. The Kalium team was responsible for the invention and success of the solution-extraction technology in Canada and recognized the promise and strategic location of Michigan.

The team successfully explored, produced and proved its hypothesis by building and operating a facility in Hersey, near Evart. Over time, the Kalium team and the Hersey facility were merged into the Mosaic company. Mosaic operated the potash mine until it sold the operation to Cargill Inc. in 2014, when Cargill ceased the facility’s potash production in favor of mining salt.

So, why did Mosaic close an industrial mine? Pagano says the mine has a 150- to 200-year life, producing a million tons a year.

Ward Forquer, who had worked for Mosaic and is now MPC’s vice president of potash marketing and business development, says the facility, even though it was expanded in 1997 to produce 500,000 tons annually, was small in a huge Mosaic portfolio, and the vision for the Michigan mine was lost.

“Mosaic’s Canadian mines were producing millions of tons each annually,” Forquer says.

Scott St. Germaine, MPC president of operations, says, “It didn’t strategically fit at the time. Mosaic’s CEO told us Michigan made 1% of the company’s product, while taking 3% of the corporation’s time to produce. The funding capital wasn’t there.”

In recent years, the price of potash has dropped considerably. In 2012, potash was running about $550 a ton. Now, it’s $300, but Pagano contends, even with a $60 million annual outlay for operations, MPC will have one of the lowest operating costs in the world and will be very competitive. “We will have the ability to pass some of the differential and spread onto distributors,” he says, adding that reduced shipping costs and solution extraction provides real savings.

MPC says it can supply all of Michigan with its 300,000 tons of annual potash consumption, and will have easy access to markets in Indiana, Illinois, Ohio and Tennessee. It can also ship across the Great Lakes to serve Wisconsin.

Potential discovered
In 2008, Mosaic gifted Western Michigan University with 78 salt cores that were drilled for original exploration. That information is open to the public, which promoted Pagano to spend some time with William Harrison, WMU professor emeritus in the geology department. “Except for the Kalium team, nobody else in the world knew this existed,” Pagano says, who verified with Harrison that it was of the highest-grade potash in the world.

Pagano began assembling a team to pursue the new opportunity, which included former Kalium-Mosaic management members and others involved in the industry. Collectively, their expertise spans 280 years.

Harrison calls the deposit amazing. “When I was in school and studied samples from Canada, I always thought this stuff was a red, dirty salt that had a lot of clay, mud and iron in it,” he says. “When I saw this [Michigan] material, I couldn’t believe it because it’s actually crystal clear. It’s incredibly pure. In some zones, it’s almost twice the quality of the rest of the world. That’s good for farmers because they will get more of the key ingredient — potassium — rather than impurities.”

New vision
The proposed new facility would be 2 miles farther from the Muskegon River than the Mosaic operation and is being designed with no wetland impact.

St. Germaine says there has been some public concern about water use, environmental impact and truck traffic. “But, for the most part, overall community approval rating is outstanding,” he says. “I lived on the Muskegon River all my life and still live about a mile from it and enjoy taking my grandkids there, I would never be involved in a project that I knew was going to contaminate Michigan waterways.”

The project includes two water wells — one for production and one for backup and employee water needs. Combined, they are permitted for 1,200 gallons per minute, but St. Germaine says they will not use that much. For operations, “we are drilling a water well far below the aquifers tapped for human consumption,” he says. “The water we are using is nonpotable; it’s coming from wells more than 300 feet down and unsafe for drinking.”

Once the facility is operational, the company expects to use about 500 to 700 gallons of water per minute — about a third of one irrigation well, Pagano says.

While the process will require water, Forquer notes that potash is desired by farmers because it is most responsible for water-use efficiency in all crops. Irrigation needs go down substantially, saving water, and dryland farming is possible, where otherwise it would not be,” he says. “Potash is a critical element for good water stewardship.”

The process
The company is permitted for 11 new potash wells (putting eight on line to start), which will be drilled straight and then directionally (10%) from a central location on 2.5 surface acres to cover more than 250 acres of mining subsurface, St. Germaine says.

“We will push hot water through the cavities, which are 300 feet apart, until they connect, and then extract the potash with the water,” St. Germaine explains.

“With the potash dissolved in the water, it gets pumped back up to the surface through a high-pressure line — with state-of-the-art leak detection — about an eighth of a mile to the processing facility,” he says. “That’s where we use mechanical vapor recompression, which boils off about 1,600 gallons of water per minute. The water is recaptured and pumped back into the ground to dissolve more potash, which is potassium chloride, a food-grade product.”

Worldwide, most potash is mined conventionally. But by using liquid extraction, St. Germaine says the Michigan product is 99% pure. Impoted potash “gets loaded on a train, loaded on boat, loaded on a truck, and it has a lot more fines that plug up applicators,” he says.

Also in the Borgen Bed and brought to the surface is sodium chloride, or food-grade table salt.

St. Germaine says the closed-loop system allows for about 90% of the water to be recycled.Once the water is boiled off, the product is cooled, and the potash crystalizes and is collected. It’s then run through a 290-degree-F dryer, compacted with a roller, and crushed to size and stored.

There are growth phases established for MPC, but to start, St. Germaine says the company plans to produce 1,500 tons of potash a day. It will also make upward of 2,000 tons of salt a day. “We won’t keep all of that,” he says. “We will ease into the market slowly, so most of it will get re-dissolved and put back into the subsurface.”

To move the product to distributors, Pagano says Michigan is uniquely set to service competitive rail lines from Baldwin Gennesee & Wyoming and Clare Great Lakes Central, as well as by truck, barge, lakers and ocean-going vessels.

To access the freeway, MPC partnered in a 50% cost-share with the Michigan Department of Transportation for a 1.5-mile road improvement project, costing $5 million.

Good timing
In the past, domestic U.S. potash production was largely sourced from New Mexico and some from Utah. In the last 18 months, U.S. potash supplies from New Mexico have become depleted, and production has dropped 950,000 tons per year (over 70%).

“Certainly, in the U.S., this Michigan deposit is one of the most significant mineral finds, and it just so happens to be a ‘Strategic and Critical Mineral’ that the U.S. is 94% to 96% import-reliant upon,” Pagano says. “It’s also located in the demand center of the U.S. Corn Belt, where our farmers need it most.”

The Strategic and Critical Mineral list was created after President Donald Trump sought to boost domestic production of 35 critical minerals to reduce reliance on foreign suppliers.

“Potash is one of the world’s tightest-controlled natural resources, and is overseen by a foreign oligopoly, for which the United States is critically dependent upon,” says Pagano, who notes that U.S. farmers consume 10 million tons of potash annually, largely supplied by Russia and Canada.

The two countries together control more than 80% of the world’s potash reserve, and consolidation in the industry has meant fewer options for growers.

In September 2016, Potash Corp. of Saskatchewan Inc. and Agrium Inc. merged to create the world’s largest fertilizer producer called Nutrien, based out of Canada, representing a market value of roughly $29 billion, according to reports.

“This operation gives growers another choice — another competitor in one of the largest oligopolies in the world,” Pagano says.

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