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Rio Tinto’s well-kept secret is out. The company is a joint venture partner in a rather large potash deposit in Saskatchewan, not too far from BHP’s Jansen mine.
The secret is out. Rio Tinto (NYSE:RIO) has been sitting on a world-class potash deposit in southern Saskatchewan not too far from where BHP Billiton (NYSE:BHP) is building its US$3.8 billion Jansen mine.
Despite the mining giant being rather tight-lipped about the project, Rio’s joint venture partner, North Atlantic Potash, a Canadian subsidiary company owned by Russian JSC Acron, has already filled the market in on progress at the Saskatchewan deposit. In December, North Atlantic announced the completion of an initial exploration program at the KP 405 potash project and successfully delineated a resource.
According to North Atlantic’s December 12 news release, KP 405 has an inferred resource of 1.4 billion tonnes of potash with an average grade of 31% KCl. The company believes that based on a solution mining operation, it can recover roughly 329 million tonnes of KCl at the wellhead from the resource defined within the northern area of KP 405.
Arie Zuckerman, VP of JSC Acron and President of North Atlantic described the project as a “massive potash deposit is located in one of the most favourable potash regions in the world.” Zuckerman went on to say that “The size, quality, and temperature characteristics place the project globally in the top tier of potash deposits. Exploration shows that this deposit has the potential to support a world-class solution mine for more many years and its technical characteristics point to very favourable operating costs.”
Despite being slightly older news, KP 405 has regained some market attention after Rio Tinto highlighted the project in its 2013 Strategic Report. The mining giant is calling KP405 the eighth “tier-one” discovery in the past decade.
The miner, who took an interest in potash in 2011 after partnering with North Atlantic, sees ” higher nutritional standards, population growth and limited arable land make potash a critical factor in maintaining global food security, and a natural complement to RTM’s existing borate fertiliser business.”
North Atlantic’s CEO, David Waugh, explained that if a three-million ton per year mine were to be built on the KP405 site, the deposit could last for over 100 years.
The companies are planning to move the project forward into the next phase, aiming for a prefeasibility study some time in the future.
Securities Disclosure: I, Vivien Diniz, hold no investment interest in any of the companies mentioned.