US boosts potash projects in Utah, Michigan

Privately-held Michigan Potash & Salt and Utah-focused Peak Minerals have two of the most advanced potash projects in the United States as the Trump administration pumps money and permits into a sector that’s been mostly dormant since the 1960s and dependent on imports.

Peak Minerals, backed by Hong Kong-based private equity firm EMR Capital, is seeking funding for its $435-million (C$604-million) capex Sevier Playa project as it contends with an environmental group’s opposition.

“We’re in advanced discussions with lenders and equity investors and possible royalty investors to fully fund phase one of the project,” Woods Silleroy, Peak’s vice-president of operations, told The Northern Miner by email this week. “We remain confident that the environmental work performed by the Bureau of Land Management will prove to be unimpeachable.”

The federal FAST-41 permits program could approve Michigan Potash’s U.S. project this year after the government extended a $1.26-billion loan guarantee for the 726,000-tonne a year proposed mine.

Critical mineral

The U.S. potash industry has been largely idle since the 1960s, when the development of massive, lower-cost deposits in Saskatchewan rendered most American operations uncompetitive. In a new push, the White House listed potash as a critical mineral last year and unlocked government funding.

It wants to wean the U.S. off 6.1 million tonnes in annual imports that account for more than 90% of domestic needs and to ease fertilizer costs for struggling U.S. farmers. An agriculture bailout cost the government $12 billion in bridge financing in December. The timing may be right for smaller potash projects.

The administration’s best bet for quick action may be Peak’s Sevier Playa project about 300 km southwest of Salt Lake City. Support for Peak from the U.S. Department of Agriculture included an $80-million grant, Silleroy said.

Then the Bureau of Land Management approved construction of Sevier Playa’s 195,000-tonne initial stage in June. The approval was the last Peak needed to start construction although the Southern Utah Wilderness Alliance is challenging the project.

Financing needs

Peak still requires $355 million in construction capital, but the company has signed offtake agreements with Anglo American (LSE: AAL) and Mexico’s Fertilizantes Tepeyac. The deals cover 60% of Peak’s initial 195,000 tonne annual output. Silleroy said Peak is in negotiations on another 20% of output and is considering further contracts or spot market options for the remainder.

Michigan Potash & Salt also received an $80 million USDA grant, in December. The FAST-41 program overseen by the Federal Permitting Improvement Steering Council is awaiting an environmental report and a final Department of Energy decision on government funding, according to the program’s website.

“The department continues to work closely and collaboratively with Michigan Potash, the Environmental Protection Agency and the Permitting Council to advance the project,” an energy department spokesperson said by email on Wednesday.

The company has an offtake agreement for all of its initial run and has announced a deal with Austin, Texas-based potassium-battery technology developer Group1 for taking later production.

Early-stage development

While some legacy U.S. production has continued in places such as New Mexico and through byproduct or solution-mining operations, the country has not built a new world-scale conventional potash mine in more than half a century. It has become heavily dependent on imports, mainly from Canada, for the vast majority of its supply.

“The U.S. agricultural sector will need to rely heavily on imports (e.g., from Canada) for the foreseeable future,” the U.S. International Trade Commission said in a November executive memo. “It will take considerable time and money to build the required infrastructure.”

But some companies with early-stage projects see opportunities in the Trump administration’s new push to boost domestic potash mining. Sage Potash (TSXV: SAGE, US-OTC: SGPTF) and American Critical Minerals (CSE: KCLI, US-OTC: APCOF) are two Canada-listed juniors benefiting from the government’s onshoring initiative.

Sage received $14 million from the USDA in September and raised C$14 million (US$10.2 million) in a private placement last year. The company anticipates its Sage Plains project will produce 300,000 tonnes annually in Utah’s southeast. Sage will use the financing for more drilling as per its November 2025 technical report.

American Critical Minerals raised C$7.45 million in in December to support exploration at its Green River Potash and Lithium project in Utah. The company plans to drill four holes this quarter.

Existing producers

America’s existing potash producers aren’t showing interest in major capital spends. Mosaic (NYSE: MOS) said in December that it had spun off its Carlsbad, New Mexico mine to Delaware-registered International Minerals Carlsbad for $30 million in cash. Mosaic added that its potash production is now entirely focused on operations in Canada. The new company said it planned to increase production at the mine but released no new spending plans.

Intrepid Potash (NYSE: IPI), which owns three mines and accounts for most domestic output, said in November that operational changes could result in moderately increased output but proposed no new development.

Most U.S. potash is imported from Canada, the world’s largest producer. BHP (NYSE, LSE, ASX: BHP), the world’s biggest miner, is slated to ramp up its $8.7-billion Jansen potash project in Saskatchewan to full production of 8.5 million tonnes per year in 2031. This would represent 10% of global supply once complete and would be more than enough to meet growing US demand.

Nutrien (TSX, NYSE: NTR), which produces about 14 million tonnes of potash a year as Canada’s largest supplier, floated plans in November to build a potash export terminal in Washington state to serve Asian markets. But the proposal stirred backlash at home as industry players and policymakers questioned why Canada’s main producer would invest in major export infrastructure outside the country rather than expand capacity at domestic ports.

In December, the U.S. agreed to remove sanctions on potash from Belarus, which could eventually work its way into U.S. markets if it can overcome logistical challenges imposed by European sanctions.