Resources giant's speciality unit plans potash entry
By: Helene Le Roux Published: 09 Mar 07 - 0:00
POTASH Resources giant's specialty unit plans potash entry. The world's largest diversified mining company, BHP Billiton, plans to add a new mineral to the list of commodities that it produces - potash.
Potash is one of the three groups of fertilisers required by the agricultural industry, the other two being phosphate and ammonia nitrate.
BHP Billiton diamonds and speciality customer sector group president Alberto Calderon says that there is a compelling case for developing the company's vast potash resource in Canada's Saskatchewan province.
The mining of potash satisfies the three conditions against which the company benchmarks new projects - it is capital intensive (to develop a new mine requires more than a billion dollars), it requires a high level of technology, and it involves a scarce resource.
The estimated cost of developing a two-million t/y potash mine is $1,5-billion.
Moreover, it takes eight years to develop a potash mine.
Mining usually starts one kilometre below the surface, and to reach the ore, mine shafts typically have to go through 80 meters of glacial deposit, 440m of shale, 120m of water-bearing sandstone (the Blairmont formation), 420m of limestone and 15m of salt.
The market fundamentals for potash are strong. Potash is needed anywhere that crops are grown, making it a global business. The rapidly expanding biofuels industry is one of the growth drivers of potash demand.
Only 12 countries have economically-viable deposits and most of world production originate from Canada (50%), Russia and Belarus (35%). Six companies control more than 75% of the 52-million t/y of potash produced worldwide.
More than 150 countries import the mineral, and demand is increasing as a result of population growth and the rising number of wealthy people in emerging markets who require better quality food.
Calderon says that 85% of existing potash mines are more than 25 years old.
“It is difficult to get substantial land acreage. We entered the potash industry with a junior mining company, and we are quite happy with the 4 000km2 of land that we currently hold.
“We are now busy identifying the best position for a new mine in Saskatchewan,” Calderon adds.
BHP Billiton has interpreted core samples from 260 oil holes to select six preliminary mine sites.
The next step is to perform two-dimensional and three-dimensional seismic evaluations in an area of 300km2.
These evaluations are critical to determine the size of the seal that is required to prevent the mining operation from flooding.
The prevention of flooding - which results from sinking shafts through the Blairmore Foundation that consists of a layer of unconsolidated water and sand - is one of the most challenging aspects of potash mining in Saskatchewan.
The layer is usually frozen to enable shaft sinking and then sealed off.
Two-dimensional and three-dimensional seismic evaluations are performed to identify areas that are naturally sealed off from underground flooding. Once these areas have been identified, BHP Billiton will be able to progress to drilling and a prefeasibility study, which the company hopes to start by 2010. Fact box: Potash Potash is the nutrient that has the greatest impact on food taste and texture and brings important nutritional benefits to many crops. It gives plants strength and aids water retention.
The mineral also contributes to larger yields, greater disease resistance and improved handling- and storage capabilities. As a feed supplement, potash assists animal growth, maintenance and milk production.
In the past, potash was produced from burning wood and refining the mineral from the ashes.
Today, potash is mined from deposits left behind when ancient seabeds evaporated and left behind phosphate particles.
These particles were formed from the remains of sea life, such as sharks, fish and whales. The bones of this sea life are highly concentrated in phosphorus.
Over 20-million years the bones were buried beneath tons of sandy soil and reacted with the soil to form phosphate mineral. POTASH MINING Demand for potash is increasing worldwide, yet there are few economically viable sources of the mineral (potash) Edited by: Helene Le Roux
