By Steve Halabura
The world could use another 23 million tonnes of potash, given the current global fertilizer crunch. The question is where to get it from? The logical place is Saskatchewan, given its almost infinite resource of the pink stuff.
Here is the problem – how do we, as a province, get to this production rate as quickly as possible?
There are two obvious and commonly discussed ways to achieve this. The first is to advance the construction of large mines, as is being done by BHP. The second is expanding existing production, which has been recently proposed by Nutrien. These two potash players have dominated the news in the potash sector by proposing just these two types of strategy.
But there is a third way to rapidly expand Saskatchewan’s potash production, and while there isn’t much about this in the news, it is worth close examination. As much a business philosophy as a technical process, this way is what is variously named “modular” or “selective” solution mining. I will simply call it “small scale mining”.
This third way is based upon designs and business models that utilize mining and processing techniques and technologies that lead to cheaper, cleaner, and more versatile production capability. Instead of one large mine, think of several smaller mines that collectively add up to the same production capacity.
This is not such a new idea. In the 1960s, all the mines that were constructed began at output capacities less than one million tonnes per year. Also, there were at least six other solution mining tests besides what is now Belle Plaine that used varieties of techniques to mine potash on scales smaller than the underground “tunnel” mines.
The grandfather of using horizontal wells to mine potash was Intrepid’s Moab Utah mine, where such wells were used to tackle the challenges posed by the complex structural condition of the deposit. Therefore, use of horizontal wells is often called the “Moab Method”, however this is where the similarity ends in terms of technology. Technologies proposed for Saskatchewan are either variations of this method, or in the case of Buffalo and Beechy Potash, unique and patented mining processes.
During the last potash boom from 2005 to 2013, Potash One, the predecessor to the present K+S Bethune solution mine, had a plan to develop smaller “satellite” mines; however, its acquisition by K+S in 2010 set this plan aside and the mine developed according to a more conventional large mine using existing solution mining technology.
Nevertheless, the idea of “small modular mines” did not die. In 2013, Gensource Potash began designing a way to deploy selective solution mining as a speedier and more efficient way to get to potash production, and after much work, is poised to begin production at its Tugaske location. Western Potash is operating a pilot selective solution mining operation at its Milestone property. Buffalo Potash is moving forward with launching its “Hub and Spoke” business model by deploying its patented HLD mining system at its Disley and Odessa sites. In Manitoba, PADCOM recently received its license to begin potash development at its Harrowby site near Russell.
The common theme to all of these is the application of selective solution mining, which means using salt brine to selectively dissolve the potash and decrease or eliminate the dissolution and removal of halite. Selective solution mining occurs today when after the primary phase of mining during which the cavern is constructed using fresh water, salt water is used to selectively leach potash from the cavern walls.
Another common theme is that all incorporate, in some form, combinations of horizontal injection and production wells. Horizontal wellbore offer a crucial advantage to solution miners – they provide contact between the wellbore and the potash bed along the horizontal length of the bed, rather than just along the vertical intersection of the bed. Horizontal mining is a very common technology applied many thousands of times in the oilpatch, especially in the heavy oil and bitumen sectors, so why can’t it be applied to potash?
Horizontal drilling offers other advantages to potash mining. Mining potash is about maximizing the contact between solvent and the potash, so intersecting a potash bed along its horizontal length allows for maximum contact to occur. Think about it this way: there is more surface area contact between a flat sheet of paper in contact with an underlying table than for the contact area between a vertical cylinder penetrating the same table. By analogy, a network of interlinked horizontal wells should provide for more contact with a horizontal potash bed than can be obtained using vertical wellbores that penetrate through the bed.
Existing solution mining technology, known as the “Belle Plaine” method because it was first deployed at the Belle Plaine mine, uses vertical wells that lead to the creation of large vertical caverns that span the entire thickness of potash beds, thus creating a large surface area by virtue of the cavern walls. To create the initial cavern, fresh water must be used since not only potash beds, but also the intervening barren salt beds must be dissolved. Once the large cavern is created, then salt water can be used to selectively leach out potash from the cavern walls and any rubble created during cavern construction.
“Small modular mining” cuts right to the heart of the process. The wells snake through the high-grade potash beds, introducing a heated salt water solvent directly to the potash ore, and thus immediately initiate the potash leaching process. This has great sustainable and green mining potential.
First, since none of the barren halite must be removed, nor big vertical caverns created, there is a highly reduced need for fresh water possibility. Decreased use of fresh water, since no need to dissolve intervening salt beds, would be required for conventional vertical cavern mining.
Second, less energy should be required as there is much less fresh water to be evaporated during the primary mining phase.
Third, by selectively leaching potash in-situ, much of the salt and clay waste should be left behind in the mining plane or gallery. This reduces the amount of salt and clay waste brought to surface, which then must be disposed of or stored.
Fourth, horizontal solution mining, in creating horizontal galleries versus vertical caverns, should lead to less surface subsidence. This means more extraction of the potash in place, as there is no need to keep supported (or inflated) a landscape of interspersed caverns with intervening pillars.
Higher extraction ratio means less resource volume is required, which for a given thickness, means less surface area. This allows for a lower requirement for lease area and the possibility of mining irregularly shaped deposits.
“Modular” mining means several things from a business viewpoint. For instance, larger distributors can have their own “bespoke” mine, and the ability to take their product at the source. It means less capital risk because mining capacity can be increased as demand increases.
A great advantage is being able to use standard oilfield technology, services, and supplies. Processing technology is “off-the-shelf” in most cases. This offers great advantages in terms of safety, the need to deploy people underground, and all the hazards this entails.
This type of mining offers an opportunity for Saskatchewan First Nations to access a mining technology that allows them to physically mine their reserve lands, thus being actual producers rather than simply employees.
In closing, I would like to comment upon a fundamental premiss: Why do potash mines have to be big?
In many circles, potash is perceived to be a dry bulk tonnage commodity, akin to iron ore, or metallurgical coal. In this worldview, a small number of very large mines sell big amounts of the material to a small number of equally large consumers, both linked by a logistics system that allows for the movement of lots and lots of stuff. In this way, unit costs are minimized, thus allowing for significant margins to the plethora of value-added processors that exist between the big buyer and the individual consumer.
The “big business” of potash is great, but there is one crucial difference between potash and iron ore or coal that allows for smaller opportunity: in principle, you and I could drive up to a producing mine and buy the MOP we need for our planting right from the load-out. However, you and I can’t drive to an iron ore mine, buy a couple of B-trains of ore, then drive it home, forge the steel, and use it to build our tractor and air-seeder.
Thus, there is a market niche for the smaller, niche potash producers. There will always be smaller distributors, users, buyers, and such for whom a 5,000 to 50,000 tonne delivery direct from a mine provides some security of supply.
This aspect of potash markets allows us to imagine potash production following a model similar to oil and gas production. In this scenario, numerous small-to-medium-sized mines produce potash in a competitive manner, offering buyers selectivity in terms of competitive pricing. There are more opportunities for smaller investors to participate in the potash space. Mine owners and operators could be a First Nation, thereby allowing their peoples to exercise their sovereign right to economic development.
Obviously small modular mining won’t replace the large mines we see today, however, I believe the sector will develop to the point where potash produced by small green modular mines will, to the smaller distributor and end-user, be an alternative to buying from the larger established potash businesses.
Nuff said…
