Compass Minerals, Overland Park, Kan. announced on Sept. 4 a two-phased plan to strengthen its sulfate of potash (SOP) specialty fertilizer production through upgrades to its processing plant and expansion of its solar evaporation ponds at the Great Salt Lake in Utah.
The initial phase is expected to increase Great Salt Lake Minerals’ SOP production capacity by more than 20 percent through modifications to the company’s existing solar evaporation ponds, coupled with yield improvements and increases in the processing capacity of its plant. These projects are expected to progressively increase the company’s SOP production capacity in 2008 and 2009, with nearly 100,000 additional tons available by 2010. This initial phase is expected to cost approximately $25 million over three years, beginning in 2008.
“These investments in capacity and efficiency will help us lower our production costs as well as meet the growing worldwide demand for SOP as an environmentally friendly, organic specialty fertilizer,” said Angelo Brisimitzakis, Compass Minerals’ president and CEO. “These projects are consistent with our focus on strategic investments that leverage our strong asset base for long-term profitable growth and continue our commitment to operational excellence.”
For the second phase, Compass Minerals is pursuing strategies to add new solar evaporation ponds to its existing 43,000 acres of ponds at the Great Salt Lake. Additional SOP feedstock produced by the new solar evaporation ponds would reduce the company’s reliance on higher-cost potassium chloride, which it currently sources to extend its pond-based SOP production.
The State of Utah recently issued a record of decision to lease 23,000 additional acres to Compass Minerals at the Great Salt Lake. In addition to leases, the company must receive construction permits from the U.S. Army Corps of Engineers in order to build additional solar evaporation ponds. The final scope of the project ?Çô including the timing, cost, additional pond harvest, and need for additional processing capacity ?Çô will be determined following the company’s detailed engineering analysis and the Corps of Engineers’ comprehensive permitting process. The company would not expect to begin construction of the additional solar ponds for at least two years.
“The pond expansion makes sense from both economic and environmental perspectives. Solar evaporation is a lower-cost and environmentally friendly production method, particularly in comparison with other forms of SOP production that rely heavily on the use of fossil fuels,” Brisimitzakis said. “The demand for SOP is consistently growing as the need for fruits, vegetables and tree nuts increases in the U.S. and abroad.”
The Compass facility currently has the capacity to annually produce approximately 450,000 st of SOP, approximately 500,000 tons of magnesium chloride, and over 1.5 million tons of salt. Compass estimates the recoverable minerals exceed 100 years of reserves at current production rates, and capacities are so vast that quantities will not be significantly impacted by the companies’ production. Company rights to extract these minerals are contractually limited, although it believes it will be able to extend lease agreements, as in the past, at commercially reasonable terms, without incurring substantial costs or incurring material modifications to the existing lease terms and conditions.
In calendar 2006, Compass shipped 377,000 st of SOP, with 270,000 st (72 percent) going to the U.S. and 107,000 st (28 percent) exported.
Compass Minerals, the largest producer of SOP specialty fertilizer in North America, has been producing minerals from the Great Salt Lake for 40 years. The company draws naturally occurring brine from the lake into shallow ponds and allows solar evaporation to produce sulfate of potash, as well as salt and magnesium chloride minerals. Sulfate of potash is a specialty fertilizer that improves the yield and quality of high-value crops such as fruits, vegetables, tea, tree nuts, and turf grasses.