K+S reported that it expects to be able to extract some 10 million mt more potash specialties due to the expansion at its Werra complex over the expansion’s lifetime (to 2060) compared with the volume produced today. In an earnings call with analysts on Nov. 14, K+S said it hopes to convert the Unterbreizbach, Thuringia, and Wintershall sites, which together make up the Werra integrated production complex, to a dry processing method by 2026/27 (GM Oct. 21, p. 32).
“The
secondary mining technology combined with the dry backfill will allow us to use
high ore content areas, and therefore, we will need to extract less rock salt
for the same output,” said K+S Chief Operating Officer Holger
Riemensperger.
“The
Unterbreizbach site, for instance, we can run another eight years,” he
said.
K+S will use its
proprietary electrostatic separation (ESTA) process to sort salt minerals dry
without the use of water. The technology already is well established at the
company, but now has been “decisively further developed,” the company
said.
Once completed,
the conversion of production at the Unterbreizbach and Wintershall plants will
more than halve the total volume of process water for the Werra Plant to 1
million cubic meters per year, K+S said. Not using water in the production
process will also mean drying downstream processes will not be needed, reducing
the need for fossil fuel energy. CO2 emissions will be reduced by around 50% at
the two sites.
“Combining
all of these together substantially improves our cost position and allows for a
higher proportion of potash magnesium specialties. The specialty potash
magnesium fertilizer I am referring to is our Korn-Kali brand, where we have a high market share in all the
regions where we serve,” said Riemensperger.
But today the
company is “production limited” and not able to meet the growing
global demand, he told analysts.
The dry processing
conversion project will increase capacity of granule production as well, which,
Riemensperger reminded, improves field applicability and also provides the
option of adding secondary nutrients.
“Due to the
significantly reduced CO2 emissions, one can call this ‘green potash,'” he
said.
Riemensperger put
the total investment in the project at about €600 million (approximately $615.5
million at current exchange rates), adding that the incremental difference
between the investment and the investment need going forward in a shareholder
equity situation is only €300 million. “In other words,” he said,
“the extra 10 million mt potash specialties come at only €300 million
investment”.
The Werra plant is
home to three of the company’s combined sites. For the time being, the third
production facility – the plant at the Hattorf site – will continue to operate
with the current technology, K+S has said.
The project to
convert to a dry processing method is a linchpin project in K+S’ “Werra
2060” strategy, designed to strengthen the competitiveness of the Werra plant
and to extend its life with increased and more stable production, as well as
reducing the environmental footprint of the company’s domestic potash
production.
The Werra plant
currently generates half of K+S’ German production output, and according to the
company, can cover approximately 40% of Western European potash demand.
The company
highlighted the deposit at Werra, including the new Marbach field, has reached
another 40 years of potash mining.
Also in the Werra
2060 project, K+S sees the new Marbach mining field as helping open up
prospects for the company’s Werra Plant until 2060 (GM June 9, 2021). The Marbach mining field extends from the
southwestern edge of the current mining operations in the Eitratal Valley in
eastern Hesse in the direction of Fulda.
Riemensperger
reminded analysts at this month’s earnings call that Marbach is “well
explored and K+S knows what to expect in the area, so the site is low risk.”
At present, K+S is
not actively mining in Marbach.
Responding to an
analyst’s question about the timing of a decision on resumption of potash
production at the company’s Siegfried-Giesen site, Riemensperger said there are
still some legal claims ongoing.
“Before [the
claims] are finally decided, we cannot go for an investment decision. So the
decision may be still a couple of years away,” he said.
Mining operations
were discontinued at the Siegfried-Giesen site in the Hildesheim district of
Germany’s north-central Lower Saxony State in 1987, but the mine was retained
as a reserve mine by K+S because it has substantial proven reserves. The potash
deposit there has a high content of valuable nutrients and is particularly
suitable for the production of fertilizer specialties.
The Sarstedt salt
deposit on which Siegfried-Giesen is based has proven reserves of more than 100
million mt of sylvinite and hard salt, sufficient for at least 40 years of
potash production.
The Lower Saxony
State Authority for Mining, Energy, and Geology (LBEG) in January 2019 issued
the permit for a possible resumption of potash production at the site (GM Feb. 1, 2019).
K+S provided
little in the way of any update on the ramp-up of its Bethune potash mine site
in Saskatchewan, other than that the company was doing “a Bethune ramp-up
deep dive” in the course of 2023.
At a first-quarter
2022 earnings call in May, K+S reported that it was increasing the capex budget
by €50 million for Bethune to accelerate the ramp-up of the operation “not
only targeting the short-term acceleration of the ramp-up, but proactively also
the longer-term ramp-up of the site,” Chairman of the Board of Executive
Directors and CEO Burkhard Lohr told analysts at a company earnings call (GM May 13, p. 1).
According to Lohr
at the time, the ramp-up project would increase production capability at
Bethune by no more than 50,000-150,000 mt annually as of 2023. He had said for
technical reasons there is not much more capability than that in Bethune, and
that the increase would come from secondary mining.
However, in the
long-term, K+S said it is looking to a ramp-up in capacity to 4 million mt/y at
Bethune, as well as to increase the operation’s granular products.
