Regenerative fertilizer and power producer EarthRenew Inc., Toronto, announced on May 18 that it has signed a nonbinding Letter of Intent (LOI) to lease approximately 15 acres of land from K+S Potash Canada General Partnership (KSPC) near its existing Bethune, Sask., potash mine and processing plant, where it is eyeing the construction of a facility to produce up to 100,000 mt/y of granulated regenerative and organic fertilizer product.
Pursuant to the terms of the LOI, EarthRenew anticipates entering into a potash supply agreement whereby KSPC shall supply potash byproducts for raw material input into the company’s regenerative fertilizer blends from its Bethune mine for a minimum period of 15 years.
EarthRenew also anticipates signing a minimum 15-year lease agreement for the leased lands. Other key terms of the LOI include: terms of the lease and shared services for the facility, granulation services, marketing and distribution, and the potential option to collaborate on future product innovation and research and development within the facility.
“The signing of this LOI represents our commitment to working towards increased manufacturing capacity,” said EarthRenew CEO Keith Driver. “We are very excited to be pursuing an opportunity that would allow us to work closely with a global leader like K+S Potash and to secure consistent access to their high-quality potash.
“Customers prefer our regenerative products because they are made from natural mineral sources, which are essential to the plant but do not leach into groundwater like conventional products,” he continued. “KSPC’s potash is an integral part of our blends and this LOI further establishes our long-term relationship and commitment to building the best soil health products possible.”
“We welcome the possibility of EarthRenew establishing its facility near our site to secure a local outlet for our potash byproducts,” said KSPC President and General Manager Sam Farris. “The opportunity to add value to our potash locally would mean more local jobs and economic activity, and would open the door to further partnership between our companies in the future. The KSPC team has been working with the EarthRenew and Replenish teams for the past several months as a by-product sales partner, and we look forward to building on those relationships with this exciting potential partnership opportunity.”
The company said the facility is expected to cost an estimated C$10-$15 million and will be financed by a combination of debt, equity, and suitable grants. Once produced, management expects to price these fertilizer products in a range that follows published commodity indices for potash derived products based on regional basis pricing – currently C$345-$545/mt representing a gross margin of approximately 30 percent.
EarthRenew said KSPC is an arm’s length party to EarthRenew and its newly-acquired Replenish Nutrients Inc. Construction of the facility remains subject to several conditions, including, without limitation: execution of definitive agreements with KSPC, including a long-term lease agreement and agreements respecting shared services; completion of permitting and engineering activities; and EarthRenew entering into design and construction contracts for the facility.
EarthRenew said it continues to investigate several project locations across Western Canada and into the U.S., and there can be no guarantees that the necessary permits will be obtained, that the definitive agreements and construction and design contracts will be entered into, or that the facility will be constructed as contemplated – or at all.