K+S potash mine project progressing on time and on budget – by Bruce Johnstone (Regina Leader Post – October 7, 2013)

http://www.leaderpost.com/index.html

Project near Bethune set to begin production in 2017

It looks more like a big oil discovery than a multi-billion-dollar mining project, but Saskatchewan’s first new potash mine in 40 years is taking shape and set to begin production in 2017, according to the head of K+S’s $4-billion Legacy mine project.

“We’re right on track, in terms of not only schedule, but budget,” said Sam Farris, vice-president and general manager of operations for K+S’s Legacy mine project.

The reason the Legacy project looks like a hot oil play is the presence of not one, but two, big drilling rigs on the gently rolling prairie just north of Buffalo Pound Lake. “They’re not much different than a conventional oil rig,” said Farris. In fact, the drilling rigs being used by K+S are oil drilling rigs operated by Akita Drilling Ltd. Instead of oil, however, K+S plans to produce a briny mixture composed of potash, salt and water from three different potash formations about 1,500 metres below the surface. That salty solution will be crystallized to form the “mother liquor” that will later be processed into three different potash products.

Solution potash mining was pioneered in Saskatchewan by another German company at the Mosaic Belle Plaine (formerly Kalium) mine about 50 km southeast of the Legacy site in the early 1960s.

Kassel, Germany based K+S, Europe’s largest potash company and the world’s fifth-largest potash producer, wants to become the first company to build a new potash mine in the province in four decades.

Ironically, a predecessor company of K+S built the last new potash mine in Saskatchewan in the 1970s, the Alwinsal mine (now known as Potash Corp Lanigan division), which was acquired or “nationalized” by the Blakeney NDP government in 1977 for $76.5 million.

However, as K+S Group CEO Nobert Steiner said at the sod-turning for the Legacy project in June 2012, “we are not looking back in anger anymore.” And K+S is putting its money where its mouth is.

In March 2011, K+S paid $434 million to Potash One of Vancouver for the right to develop the Legacy project, then in the fall of 2011 announced that K+S would be spending $3.25 billion to develop a solution potash mine at the site – lightning speed in the world of mining development. While other companies, like Vale, put their potash projects on hold after the pink mineral’s precipitous plunge from nearly $1,000 US per tonne in late 2008 to $400 US a tonne recently, K+S is proceeding full speed ahead. Even the fallout from the recent collapse of the BPC potash marketing cartel in Eastern Europe hasn’t diminished K+S’s faith and confidence in the Legacy project.

Earlier this year, K+S announced that the project would now cost $4.1 billion – $850 million more than previously planned – reflecting higher labour, capital and equipment costs, including rail and port facilities in the Port of Vancouver.

For the rest of this article, click here: http://www.leaderpost.com/business/Right+track/9005283/story.html

 

 

Comments are closed.