Potash is Mined in One of Two Ways

 

By Richard (Rick) Mills

Ahead of the Herd

 

As a general rule, the most successful man in life is the man who has the best information

 

1. There are conventional underground mining operations; Western Canada's potash deposits occur in the Middle Devonian Prairie Evaporite formation at depths in excess of 900 m. Start up costs run in access of $2.5b. These costs include driving vertical shafts down to the potash and purchasing underground mining/surface milling equipment. This money needs to be paid up front before any production can start leaving the company at risk to commodity market swings. Very few junior companies will have the experienced management team and the requisite financial backing necessary to pull off building conventional underground potash mine.

 

2. Solution mining involves pumping heated water through the ore body to dissolve the potash and pumping the resultant brine solution to a refinery for extraction. Deposit temperature is an important component in the economics of solution mining - a minimum temperature of 50 degrees Celsius is thought to be needed. The solubility of potash increases with temperature such that the higher the formation temperature, the higher the yield of potassium chloride in the brine solution.

 

The presence of carnallite is also a factor; carnallite will not dissolve and creates an impediment to the flow of the brine solution.

 

Start up costs are fractionalized; $100,000,000 will give you production of 100,000 tonnes per year allowing current production to pay for future expansion.

 

It’s cheaper to drill brine injection/production wells to handle solutions than to construct a pair of extremely deep conventional shafts, undertake the initial underground development work and install mining machinery. So there should be a significant saving in the initial capital cost of a solution mine versus a conventional underground mine.

 

But solution mines use hot brine instead of mining machines to extract the potash from underground deposits and for this reason their operating costs are very sensitive to the price of fuel. With natural gas prices low, solution mining is very competitive.

 

Richard (Rick) Mills

rick@aheadoftheherd.com

www.aheadoftheherd.com

 

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Richard is host of Aheadoftheherd.com and invests in the junior resource sector. His articles have been published on over 300 websites, including: Wall Street Journal, SafeHaven, Market Oracle, USAToday, National Post, Stockhouse, Lewrockwell, Uranium Miner, Casey Research, 24hgold, Vancouver Sun, SilverBearCafe, Infomine, Huffington Post, Mineweb, 321Gold, Kitco, Gold-Eagle, The Gold/Energy Reports, Calgary Herald, Resource Investor, Mining.com, Forbes, FNArena, Uraniumseek, and Financial Sense.

 

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Legal Notice / Disclaimer

 

This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. Richard Mills has based this document on information obtained from sources he believes to be reliable but which has not been independently verified; Richard Mills makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Richard Mills only and are subject to change without notice. Richard Mills assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, I, Richard Mills, assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information provided within this Report. 



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