Gary and Carol Dunbar sit smack dab in the middle of potash possibilities.
They farm beside Highway 33 southeast of Regina near Kronau, Sask. On one side is a large area that Brazilian mining giant Vale has exploration permits for. On the other is a large area held by Vancouverbased Western Potash.
Both companies are proposing to build solution mines at a cost of $2.5 billion each.
The Dunbars live within the Western Potash boundaries but have also leased a quarter section to Vale.
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Vale’s proposal, known as the Saskatchewan Project, would produce 2.9 million tonnes of potassium chloride a year. It would employ 400 workers once built.
Western’s proposal, known as the Milestone Project, is to produce 2.5 million tonnes annually and employ 300 people.
If they go ahead, both projects would be operational in 2015-2016.
It seems like a long time, but Carol Dunbar said people in the area are already excited.
The companies recently held a series of open houses in the small communities within their holdings.
“Most are on board,” she said about friends and neighbours during a meeting near Regina.
“For two big companies to be down there, it’s pretty exciting.”
The mines would be solution mines, similar to Mosaic’s operation in Belle Plaine, Sask., which means farmers wouldn’t see many changes above ground. The companies need land for a processing plant and salt storage.
“We’ll just keep farming,” Dunbar said.
The precise locations of the plants haven’t been determined.
Will Longworth, project manager for Vale, said it appears the southwestern corner of the permitted area, north of Kronau, would be the best site, but a decision will be made later this year after the prefeasibility study is complete.
Environmental studies and more consultation and negotiation with landowners are required.
“Definitely we’ve been leasing mineral rights in the area,” Longworth said.
“Obviously a lot is freehold. If the project went forward, we’d have to look at securing the surface rights.”
He said Vale’s experience so far is that people have mixed feelings.
“Some people definitely see it as an opportunity and others wouldn’t want to see development,” he said.
Water is one of the main concerns.
Vale said it will require 2,000 cubic metres of water per hour.
David Price, project director at Western Potash, said his company’s operation would need 1,200 cubic metres per hour.
“It’s a lot of water,” Price said. “Because it’s a solution mine, we can re-circulate and do as much recycling as possible.”
Pipelines would need to be built to get water to the plants.
“We won’t be sourcing water from this area,” said Dean Pekeski, executive vice-president of Western Potash.
Price said the company is working on a deal with the City of Regina to use its waste water.
Western Potash’s exploratory drilling took place mostly north of Riceton toward Kronau.
Financing is a hurdle for the smaller company.
“Within the next 12 to 18 months, we’d hope to identify a partner or a group to help finance (the mine),” Pekeski said.
Both companies are proposing solution mines because the potash-bed is deep at 1,700 metres.
Potash’s profile has risen over the past year since BHP Billiton tried to take over PotashCorp.
The federal government nixed the takeover, but BHP continues to work on a new conventional mine near Jansen, Sask. It also has a permitted area east of Regina next to the Vale holding.
Last week, German fertilizer giant K+S Aktiengesellschaft acquired through a friendly takeover 100 per-c e nt of the remaining common shares of Potash One that it didn’t already own.
Potash One’s Legacy Project proposes to build a new solution mine 80 kilometres northwest of Regina near Bethune, Sask. It would be operational by 2015 and produce 2.9 million tonnes per year
The provincial government approved the Legacy Project’s environmental impact statement last fall.
