Not any more

Saskatchewan feeds the world

In Canada on August 21, 2010 at 18:44

When it comes to potash, Saskatchewan rules.

As this week’s US$39-billion bid for Potash Corp. of Saskatchewan Inc. illustrates, Saskatchewan’s known potash wealth is so far beyond any other country or region that comparisons are a waste of time. And within the province, Potash Corp. has always had the best deposits.

“We knew from the beginning that Potash Corp. had the assets,” said Chuck Childers, who was chief executive when the company was privatized in 1989. “If they were run properly, it was going to be a valuable company. And that’s the way it’s turned out.”

Just how rich in potash is Saskatchewan? In 1973, the provincial government put out a report estimating that the province’s potash reserves and resources total around 107 billion tonnes. At current production levels, that would be enough to mine for thousands of years. You’ll never hear about “Peak Potassium” as long as Saskatchewan is around.

The province owes its amazing potash wealth to one thing: water.

For hundreds of millions of years, the prairies were largely underwater, with a long sea bed stretching through southern Saskatchewan and extending into Manitoba, Montana and North Dakota.

It remained that way until the so-called “Prairie Evaporite” event almost 400 million years ago. The water covering Saskatchewan slowly evaporated in an arid climate, and as it did, potassium-rich salt was deposited deep in the Earth, about one kilometre underground.

No one knew it was there until the early 1940s, when oil prospectors stormed into Southern Saskatchewan and drilled into the Prairie Evaporite deposit, hoping to find crude. Instead, they hit the fertilizer motherlode.

It took many years of work before any potash mines actually came into production.

The first efforts to sink a shaft were in the early 1950s. But a big layer of underground water made the work extremely difficult, and the operations were overrun by delays and excessive costs. It was not until 1962 that first production was underway.

By 1970, 10 potash mines were up and running in Saskatchewan. And that remains the case today. Despite strong fertilizer prices, there has not been a new potash mine in the province in 40 years. The mines cost billions of dollars to build because of the water issues and the sheer depth of the ore, and no one thought seriously about building a new one until very recently.

The ore is usually mined through conventional underground techniques. There are also cases where it is extracted through a so-called “solution mining” process, in which water is poured underground, the rock material dissolves into it and the briny solution is pumped to the surface.

Once the potassium chloride is separated from the sodium chloride, it is ready to ship.

Despite the dearth of new mines, the richness of the Prairie Evaporate makes Canada the No. 1 producer of potash in the world, with roughly a third of global production. And there are not many competitors. Potash is only mined in 12 countries in the world, while being used in more than 160.

Potash Corp. was created when the province’s best potash mines were nationalized and later privatized, creating a wholly Canadian entity with access to the best the Prairie Evaporite has to offer.

Chief executive Bill Doyle has an easy sales pitch. He points out that the global population is expected to rise to 9.2 billion people by 2050, according to United Nations figures. Food production will have to rise by 70% in order to feed them, and it will have to be grown on equal or less arable land.

That means that fertilizer, and Saskatchewan, will only grow in importance in the future.

“People recognize that you can’t grow food without products that [Potash Corp.] produces,” Mr. Doyle said. “And we’re not going to give that away.”

pkoven@nationalpost.com

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: