An Introduction to Potash Solution Mining

Agriculture Investing
Potash Investing

Potash solution mining is an involved yet efficient process that can create new mining opportunities where conventional techniques would fail.

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 has major business and operational benefits when used in the right circumstances. Read on to learn what they are and which major potash 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 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 — Safety is a key concern that is addressed by solution mining. Deep mining in sedimentary rock can lead to tunnel collapses or floods because of rock porosity. 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.

Extraction opportunities — 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. 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.

Potential drawbacks for miners

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.

Visibility underground — 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.

On the other hand, solution mining output is limited by factors like mineral solubility and saturation rates. This also means other minerals present 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.

Nutrien (TSX:NTR,NYSE:NTR) — As the world’s largest potash producer, Nutrien 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. Nutrien is the product of a merger between agriculture giants Agrium and Potash Corporation of Saskatchewan.

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 has phosphate operations 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 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 MOP required in the US. The company operates three solar evaporation mines in Utah and New Mexico, and says they benefit from their proximity to western markets and from the arid climate in those states.

K+S (ETR:SDF) — In 2017, K+S announced the grand opening of its Bethune solution mine in Saskatchewan, previously known as the Legacy project. The mine has an annual production capacity of of 2.86 million tonnes per year.

What do you think of potash solution mining? Let us know in the comments below. And now that you know a bit more about potash solution mining, have a look at some related articles in this space:

This is an updated version of an article originally published by the Investing News Network in 2011.

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Securities Disclosure: I, Amanda Kay, hold no direct investment interest in any company mentioned in this article.

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