Potash exploration rights are selling like hot cakes in Saskatchewan, with several sites in the Regina area and nearby Belle Plaine being eyed as possible sites for new, billion dollar mines.
George Patterson, the executive director of exploration and geological services for Saskatchewan Energy and Resources said exploration permits on about 5.5 million hectares of land have been taken out provincewide by exploration companies in recent months.
That’s way up from the situation as recently as eight months ago when there were the total amount of permits that had been taken out for potash exploration only amounted to about 200,000 hectares, Patterson said.
“There certainly are a lot of permits,” Patterson commented, in a telephone interview Friday.
A combination of factors, including a tight world supply for potash and higher prices for that fertilizer product, have clearly played a role in sparking increased interest in potash exploration, Patterson said.
Among the company’s known to be interested in exploration and possible mine development, specifically in the Regina area, is Rio Tinto, the Anglo-Australian mining giant, which has acquired exploration rights to a number of blocks of property, including property east of the existing potash mine, owned by Mosaic, near Belle Plaine.
Preston Chiaro, the chief executive of energy and mineral with Rio Pinto, was quoted in a recent article in the National Post as saying the company is interested in developing projects in Argentina and Canada that would give the company 10 per cent of the world’s potash market by 2012.
Another business — the Vancouver based Potash One company — has obtained extensive exploration rights on several sections of property near Belle Plaine.
In a news release issued July 24, Potash One announced it had obtained full ownership of Potash Permit KP289 (also known as the legacy project) north of Belle Plaine.
That acquisition in conjunction with other acquisitions means the company has potash mineral rights for over 300,000 acres of property (in the general vicinity of Belle Plaine) the news release said.
In a telephone interview Friday Farhad Abasov, the senior vice-president of Potash One, said seismic and other testing of the legacy project site should occur this year.
Abasov said he is optimistic that the mine will be built, possibly within four to five years.
Total investment would be in excess of $1 billion, he said, adding that the mine would employ about 300 people.
A solution mining process would be used which would involve injecting water into the ground which would bring dissolved potash to the surface without the need for underground mining, Abasov said.
In addition to Potash One and Rio Tinto, several other players are involved in potash exploration in the province, Patterson said.
But it can be anywhere from seven to 10 years from the time initial exploration begins until a new potash mine goes into full production, Patterson said.
“These guys (buying exploration rights) are all in the preliminary exploration stage,” Patterson said.
But that exploration activity still has the potential to lead to major investment and employment in the potash industry, he said.
The new exploration activity is on top of already announced plans, valued at $7 billion to $8 billion, to expand existing potash mines in the province, Patterson said.
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