Canada Potash Corp. owns 8 Subsurface Mineral Permits in the world’s largest Commercial Potash Mining Belt in Saskatchewan, Canada. This Potash Mining Belt is flat lying with rich potash reserves, has good continuity and undeformed. It typically occurs at the depth of less than 1,100m, facilitating cost‐effective underground mining. The grade of ore within the area is relatively high with excellent value. The climate of the mining area is temperate. The land in the mining area is flat with good existing infrastructure. The area has adequate professional and skilled labour and the political risk is lower compared to other regions in the world.
The Commercial Potash Mining Belt in Canada is the world’s single largest source of mineable potash, comprising over 50% of the world’s known potash reserves. With good continuity, the potash bearing Prairie Evaporite Formation in Saskatchewan typically occurs at depths of less than 1,100 m, facilitating cost‐effective underground mining not possible at greater depths. Potash beds in the Prairie Evaporite Formation are flat lying and undeformed and, therefore, not exposed to external complexities that would otherwise increase production costs relative to other international deposits.
The grade of ore within the Prairie Evaporite Formation is relatively high ranging from 20‐35% K2O compared to areas of Europe and Mexico, where K2O grades are 19% on average. This makes it possible for companies to economically extract viable potash quantities from relatively limited hectares of land.
The climate of the mining area is temperate, exhibiting the four seasons: winter (November ‐ March), spring (April‐ May), summer (June to early September), and autumn (late September to October). Summers are typically warm (+25°C in July) with moderate rain (approximately 60 mm), while winter is cold and relatively dry (‐23°C in January and less than 20 mm precipitation). During spring and fall, ground thaw, increased rainfall and water run‐off make the ground soft and may impede work with heavy equipment, especially on the flat to gently rolling farmland that dominates the area. However, the land in the mining area is flat with low flood risk.
A grid system of highways and rural paved and gravel roads has been developed and maintained by the Saskatchewan Government providing excellent access throughout southern Saskatchewan. The major paved road, Highway 16 (referred to locally as the Yellowhead Highway) provides access to Saskatoon and transects most of the area historically defined to host mineable potash. The main Canada Pacific Railroad runs parallel to the Yellowhead Highway. The permits can be accessed by any number of regional roads and/ or private lanes in addition to Highway 16. Yorkton, North Battleford, Humbolt, Melville and Regina can all serve as bases to access CPC’s permits.
The region is well served by natural gas delivery pipelines and an electrical distribution network. The principle supplier of electricity in Saskatchewan is the Saskatchewan Power Corporation (“SaskPower”), a government owned company operating three coal‐fired power stations, seven hydroelectric stations, four natural gas stations and two wind facilities with an aggregate generating capacity of 3,214 megawatts (“MW”). SaskPower also has purchase agreements with several private companies for a total available capacity of 3,668 MW. SaskPower maintains more than 155,000 km of power lines, 52 high voltage switching stations and 175 distribution substations.
The city of Saskatoon is located within 30 km of the limits of the Project area and can provide a source of professional and skilled labour. Ten active potash mines operate in the area (two solution mining mines, eight conventional underground mine). The closest mine is Lanigan Mine. The location of six potash mines within 50 km of the southern limit of the majority CPC’s permits also suggests that the local people will have experience in potash mine construction and operation.
In addition, investment in the mining of potash in Saskatchewan has lower political risk compared to Africa and South America.
Exploration and Development of Potash
Currently, in Saskatchewan, there are three types of companies involved in mineral exploration and development, (as shown in the figure).
1. Traditional fertilizer manufacturer: Potash Corp., Agrium, Mosaic, k+ s and Acron;
2. Giant mining company looking to expand their reach in potash mining: BHP Billiton, and Rio Tinto and Vale;
3. Company engaged in the exploration and development of potash projects: West Potash, Encanto, Karnalyte and Canada Potash Corp.
Canada Potash Corp. has acquired 8 Subsurface Mineral Permits covering approximately 2,430 square kilometres of land in south‐central Saskatchewan. This represents the second largest land holding of potash permits in the province.
Potash production is one of most important economic arms of Saskatchewan, which contributes to about one-third of the world’s potash supply. In the 1950s, Saskatchewan began to use the solution mining. The first vertical mine using conventional underground mining was built in 1956, and went into production in 1958. More conventional underground mining and solution mining were developed in the 1960s, At present, there are three companies in potash production in Saskatchewan, PCS and Agrium, Mosaic. They have 10 mines in total (table 2). Eight are using conventional underground mining, and two are using solution mining.