Canada’s status as the leading potash producer in the world is secure for the next century, perhaps even the next millennium, judging by the sheer extent of existing reserves and resources underlying the Saskatchewan prairies. And that means the western province will continue to supply the world with both fertilizer and agricultural products for generations to come.
During a recent tour of the Lanigan mine operated by
Most of the known reserves in Saskatchewan (and elsewhere) were developed as seawater evaporated and potassium salts crystallized to become the beds of potash being mined today. They are a mixture of potassium chloride (KCL) and sodium chloride, or salt. Separation of the KCL from the mixture produces a potassium fertilizer that is shipped to markets all over the world.
Lanigan has nearly 1.9 billion tonnes of recoverable ore stretching 10 km north and south of its main shaft. The average grade is 20.7% K2O (potassium oxide) in situ, while the ore thickness varies from 4.7 to 5.3 metres. The presence of hematite in the ore gives the potash products their pinkish-to-red color.
The giant among the company’s potash divisions, Lanigan has the capacity to mine 3.8 million product tonnes per year from deposits 1,000 metres below the prairie. “We’re only operating at about half-capacity, so Rocanville is bigger at the moment,” Cahoon said. “It’s a matter of economics. We can’t compete on the cost side with Rocanville, which is one of the lowest-cost facilities in the world.”
Potash Corp. of Saskatchewan (PCS) operates five potash mines in Saskatchewan, one in New Brunswick, and one in Utah. It is the largest publicly held miner of potash in the world, producing about 10% of global output. It is also the world’s largest fertilizer enterprise, producing three primary nutrients: potash, nitrogen and phosphate.
As might be expected, Saskatchewan’s immense reserves attracted numerous mining companies to the province shortly after the first potash discoveries were made in the late 1950s and early 1960s. The properties making up the Lanigan mine were assembled by Alwinsal Potash of Canada, a partnership of German and French interests.
Potash mining was a highly lucrative enterprise in its early days, and Alwinsal spared no expense building a mine and mill at Lanigan. Construction began in 1965, with first production starting in the fall of 1968 with a capacity of 1.1 million tonnes of KCL. The continuous steel-lined number-one shaft, which has an inside diameter of 5.5 metres, has two compartments (two production hoists in the same shaft) and a hoisting capacity of 31,900 tonnes per day.
As other mines began production in the late 1960s and early 1970s, potash prices plummeted as a result of oversupply. In the mid-1970s, then-premier Allan Blakeney and his New Democratic Party government announced plans to nationalize the potash industry, by expropriation if necessary.
Although market compensation was in fact paid, the government’s actions unleashed a storm of protest, with a few companies vowing never to do business in the province again. The government pressed ahead, formed PCS Mining and purchased the Lanigan mine in the fall of 1977.
As potash prices continued to weaken, irate American producers leveled charges of dumping against the Saskatchewan government. It is impossible to find anyone who was around at that time who will argue that the allegations were not true. However, the government dug in its heels and continued to invest in the industry, taking the long-term view that Saskatchewan would emerge as the world’s leading supplier, which it in fact did.
As a Crown corporation, PCS Mining built a second shaft at Lanigan in the spring of 1981 in order to expand production by an additional 2.7 million tonnes. This phase was commissioned in 1986, bringing total capacity to present levels. (The number-one shaft provides fresh air intake into the mine, with the second shaft being the upcast.)
Three years later, PCS Mining was privatized by the government, along with other Crown corporations. Since then, PCS has developed a reputation for being one of the most technically efficient fertilizer producers in the world. Improved prices restored the company to profitability and made its shares an attractive buy for pension funds and private and institutional investors.
Although PCS has produced hefty profits in recent years, 1999 was a tough year for all fertilizer producers. On a consolidated basis, and including one-time charges of US$518 million related to plant closures and related writedowns, the company reported a net loss of US$412 million last year, or $7.60 per share. If the one-time charges are excluded, net income was US$135.1 million, compared with net income of US$261 million for 1998.
PCS President William Doyle attributed the lacklustre year to lower North American demand and excess product supply. “Nitrogen was a poor performer in 1999, phosphate weakened in the second half of the year, and only potash held its own,” he said. “Our feed and industrial businesses were relatively stable, but fertilizer represents nearly 70% of our business.”
After excluding inter-company sales, total potash sales last year were 6.47 million tonnes, the second-highest on record for PCS. Increased sales to India, Indonesia and Korea more than offset lower sales to Brazil and China.
PCS expects potash will likely outperform phosphate and nitrogen this year, particularly once new production in the latter two commodities comes on-stream. In potash, a large first-half contract with China and domestic movement are expected to be at least equal to last year, which should help sustain volumes and prices. That’s good news for Saskatchewan’s potash mines, including Lanigan, which employs 335 local residents.
Operations
Conventional room-and-pillar mining techniques are used at Lanigan, which has a daily mining rate of 25,000 tonnes. The mining panels are 1,220 metres by 1,400 metres, with 36 rooms measuring 15.2 metres wide. More than 838 km of rooms have been cut to date, separated by wide pillars left to support the overburden.
Up to nine Marietta mining machines, each capable of cutting a path 2.7 metres by 8.2 metres, are used underground. They cut at an average rate of 650 tonnes per hour at an advance rate of about 30 cm per minute.
The ore is loaded on to conveyors attached to the mining machines, transported to underground bins and hoisted to the surface.
The feed ore, containing 33% KCL, 60% NaCl and 7% insolubles (mainly clay), is crushed to free the KCL (which liberates typically below 6 mesh) from the salt and clay impurities. Care is taken not to over-grind particles in the dry and wet impact crushing process.
After scrubbing and de-sliming to remove the clay, it is conditioned with reagents before the flotation process, in which the KCL is floated off the top of the cells. It is then de-brined, dried and screened. Two types of tailings are produced: salt tails and slimes containing clay.
Lanigan’s mill is the largest in the industry, capable of handling 1,300 tonnes per hour. It features the latest in computerized monitoring equipment, as does the control room underground.
Maintenance of the plant and equipment is given a great deal of attention at Lanigan. “It’s critical, given the corrosive environment [because of the salt],” Cahoon said.
The potash, graded for application as fertilizer and industrial products, is stored in three large bins with a combined capacity of 250,000 tonnes. It is then transported by rail to domestic customers, and by sea for offshore deliveries. The product leaving the site is guaranteed to have at least 60% K2O, or 95% KCL.
PCS also uses solution mining at some of its operations, including Patience Lake, Saskatchewan’s oldest potash mine. Situated 6 km southeast of Saskatoon, Patience Lake began life as a conventional underground mine but was converted to solution mining in 1988, following two periods of closure due to flooding.
Water inflows have the potential to put an end to underground mining, as the briny waters can dissolve bulkheads within the sedimentary evaporite beds hosting the potash. This can be sometimes be circumvented by doing this work in the overlying halite beds, which are insoluble. All Saskatchewan potash mines rely on seismic work, similar to that used in the oil and gas industry, to pinpoint potential areas of weakness that could trigger water inflows.
Patience Lake has an annual capacity of 1.03 million tonnes KCL, though its current output is 331,000 tonnes. The potash is dissolved by circulating brine through the flooded mine workings 1,000 metres below surface, which extend laterally up to 18 km from the mine’s shafts.
The brine is then pumped to a surface pond where it is cooled by the prairie winter until the potash precipitates. The cool stripped brine is then heated and re-injected into the mine to do its dissolving job all over again.
The potash in the pond is removed by floating dredges and pumped to the mill. The potash crystals are milled to produce standard, coarse and granular products for agricultural applications.
The Rocanville mine uses the long room-and-pillar method of mining. It has five automated Marietta mining machines, each of which is capable of mining 650 tonnes per hour. Its deposits, found at 960 metres below surface, stretch as far as 11 km from the main shaft.
The Allen mine, 48 km east of Saskatoon, also uses conventional room-and-pillar mining methods. It has the capacity to mine 1.8 million tonnes per year from deposits stretching 10 km from the main shafts. Six Goodman Wabco continuous boring machines, capable of mining 600 tonnes per hour, excavate the ore.
The Cory mine, 6.4 km west of Saskatoon, is unique among PCS potash divisions in that it produces only white muriate of potash products. It has the capacity to mine 1.4 million product tonnes each year, again using conventional room-and-pillar techniques to extract ore at a depth of 1,021 metres below surface. Five continuous mining machines are capable of mining 600 tonnes per hour. The potash produced here is graded for application as fertilizer and industrial products, such as water softener and an ice-melt.
The New Brunswick mine, near Sussex, has the combined capacity of 770,000 tonnes per year of muriate of potash and 650,000 tonnes per year of rock salt. The Moab mine in Utah, a former underground potash mine, was converted to solution mining in the early 1970s.
In the last quarter of 1999, the board of PCS approved a plan to close nitrogen plants at Clinton, Iowa, and LaPlatte, Neb. Both were high-cost producers that had been shut down since mid-August of last year. A phosphate feed plant in Virginia and a phosphate terminal in Florida will also be permanently closed.
Last summer, PCS acquired all the outstanding shares of Minera Yolanda for US$37 million, thereby acquiring a Chilean sodium nitrate and potassium nitrate producer holding reserves in the Atacama Desert. The company, which has since been renamed PCS Yumbes, was not in full commercial production before the acquisition.
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