Conventional mining processes have benefited from decades of research and development to optimize output and efficiency — but they still don’t work in all situations, especially when it comes to potash.
That is where potash solution mining comes into play. The process holds some major business and operational benefits when used in the right circumstances. Read on to learn what they are and which juniors and major producers are pursuing potash solution mining.
The potash solution mining process
Unlike conventional mining, which involves moving large amounts of dirt to access a mineral resource, solution mining requires boring injection and recovery wells into the ground. From there, a heated brine solution is injected into the deposit to dissolve potash salts. The dissolved salts are then pumped out of the cavern to the surface where the water is evaporated, either artificially or in solar evaporation ponds; salt and potash are left behind.
After a company has successfully brought its potash minerals to the surface and separated out the water, the process to create the final product is the same as it is for conventional mining.
Why potash solution mining?
Potash solution mining is ideal when ore is found at more than 1,000 meters below ground level and when dealing with sedimentary rock. In those circumstances, the depth and rock type make conventional mining risky and dangerous.
Safety is a major concern that is addressed by solution mining. Deep mining in sedimentary rock can lead to tunnel collapse or floods because of the porosity of the rock. Solution mining doesn’t require human workers to enter mine shafts, meaning in the case of a collapse or flood, human lives are not at risk.
Solution mining is often used when it’s the only choice. High temperatures, rock solubility and deeper depths often rule out conventional mining immediately, but are ideal for solution mining. The mining process used also depends on the type of potash. Carnallite, for example, can’t be extracted through conventional processes because it’s too soluble. Using solution mining allows miners to extract potash they wouldn’t otherwise be able to reach.
Efficiency and markets
Constructing and starting up a solution mine typically takes less time and investment. The process requires less manpower, less infrastructure and the structures needed can be built more quickly than those used in conventional mining operations. This makes solution mining a good choice for companies with less capital that would still like to take advantage of opportunities when they come up in the short term. Lower startup costs can also help improve the internal rate of return of a project and reduce the potash price required to justify development.
With all of that said, investors shouldn’t assume that a solution mine is inherently more efficient with capital. After all, projects will vary in terms of their challenges and necessary investments.
So if potash solution mining is more efficient, safer and quicker to start, why is it not the norm? Just like conventional methods, there is a time and place for solution mining, and the process comes with downsides that need to be carefully considered.
Water use and contamination
Because potash solution mining relies heavily on pumping water underground, there are environmental challenges that miners need to take into account. The process itself is intensive in terms of water usage, and the contamination of nearby water sources like aquifers is a real risk if solutions leak.
Solution mining isn’t going to create large openings or allow for human workers to enter easily to view the process. This is a trade off for the efficiency and smaller surface area that comes with solution mining for potash. As a result, miners need to be able to understand geological makeup in great detail before considering solution mining.
Limited metal extraction/output
One of the major benefits of conventional mining over solution mining is sheer output. Conventional mines have more fine-tuned control over how they extract ore and can build out infrastructure to mine large deposits.
Solution mining, on the other hand, is limited in output potential by factors like mineral solubility and saturation rates. This also means that other present minerals can’t be mined via solution mining if they aren’t soluble.
Which companies use potash solution mining?
While many potash projects can be mined through conventional mining, there are quite a few projects that are mined via solution mining.
Potash Corporation of Saskatchewan (TSX:POT,NYSE:POT)
As the world’s largest potash producer, PotashCorp has both conventional and solution mining projects. The company’s Patience Lake mine was originally an underground operation; however, it was converted to a solution mine in 1998 after flooding hampered conventional mining operations. According to its most recent quarterly report, PotashCorp expects its merger with fellow agriculture giant Agrium (TSX:AGU) to close late in the third quarter of this year.
The Mosaic Company (NYSE:MOS)
Mosaic operates three potash mines in Canada, including two shaft mines with three production shafts and one solution mine. The company also operated one potash shaft mine in the US. Construction of Mosaic’s new Saskatchewan potash operation, Esterhazy K3, has recently reached potash at a depth of 3,350 feet. With its new K3 expansion, the Esterhazy mine will become the largest potash mine in the world.
Intrepid Potash (NYSE:IPI)
Intrepid Potash supplies approximately 3.5 percent of the US’s annual MOP consumption. In August, the company announced its Q2 and H1 2017 results, reporting a net loss of $5.9 million; that’s compared to a net loss of $13.4 million for the same quarter in 2016.
K+S recently announced the grand opening of its Bethune solution mine in Saskatchewan, previously known as the Legacy project. The mine is expected to reach annual production of 2 million tonnes by the end of the year.
This is an updated version of an article originally published by the Investing News Network in 2011.
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Securities Disclosure: I, Sivansh Padhy, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Gensource Potash is a client of the Investing News Network. This article is not paid-for content.