Itafos, Toronto, has indicated to the U.S. Bureau of Land Management (BLM) that it is interested in securing the required permits to develop the Husky-North Dry Ridge surface mining project and the Paris Hills underground phosphate deposit previously owned by Agrium Inc. and Stonegate Agricom, respectively, in southeastern Idaho.
Itafos last January acquired the Conda Phosphate Operations near Soda Springs, Idaho, for $100 million from Agrium Inc. (GM Jan. 19, p. 1), which now is part of Nutrien Ltd., Saskatoon. Conda produces about 540,000 mt/y of MAP, super phosphoric acid, merchant grade phosphoric acid, and specialty products. Itafos sells 100 percent of the Conda MAP production to Agrium via an offtake agreement. In turn, Agrium has an ammonia supply agreement with Itafos tied to a phosphate benchmark. Some 40 percent of the Conda sulfuric acid is produced internally, with the remainder sourced from third parties at a benchmark price.
Nutrien will be responsible for any mine cleanup activities at the legacy Agrium sites in Idaho.
Jeff Cundick, BLM minerals branch chief in Pocatello, told Green Markets that Itafos has not yet had the BLM assign any of the Agrium phosphate leases to Itafos, but his office has been in contact with Itafos officials. Itafos had not responded to inquiries at press time.
When releasing its earnings in August (GM Aug. 17, p. 27), Itafos indicated that top priorities included executing its corporate strategy by focusing on optimizing its Conda operations, finalizing permits for its Paris Hills project, and integrating its Conda and Paris Hills projects. This is in line with August corporate filings in Canada in which Itafos said it intends to extend mine life through the development of Itafos Paris Hills and other alternatives. The Itafos Conda mines are 15 miles from the production site, and 35 miles from Paris Hills.
Itafos said the Itafos Conda mines have a combined reserve life through 2024. Itafos Paris Hills is still in the midst of a feasibility study, however, the company expects it will produce 1 million mt/y of phosphate rock. The company said its reserves represent a 19-year mine life.
In 2012, Agrium submitted an application to mine the Husky-North Ridge in the Caribou/Targhee National Forest, but ceased that permitting process in December 2015 to better concentrate on getting permits for its Rasmussen Valley Mine, also in Caribou County, Cundick said. He also noted that the phosphate reserves of what had been Agrium’s Rasmussen Valley Mine and a private Lanes Creek Mine will be depleted in 5-6 years.
As is common in the mining industry, Itafos initially offered resources for the BLM to hire a project manager as part of an interdisciplinary team, Cundick said. Itafos’ development of the Paris Hills property, acquired from Stonegate Agricom in July 2017, not far from Bear Lake on the Idaho/Utah border, will not involve the BLM, he said.
“That effort will not likely include BLM since there is very little federal phosphate associated with that deposit. Itafos will need to work with the State of Idaho Department of Environmental Quality, among other agencies, to gain approval to mine that property,” said Cundick.
In June, Itafos announced that it had closed a $165 million credit and guarantee agreement (GM May 25, p. 28) with CL Fertilizers Holding LLC, formerly Houston-based Zaff LLC, which was founded in 2011 with offices in Dubai, United Arab Emirates, and Singapore. Zaff changed its name to CL Fertilizers (CLF) last February.
CLF owns about 58 percent of Itafos’ 142 million outstanding shares. Itafos announced that some of the funds managed by BlackRock Financial Management Inc. could be used as working capital and other cash requirements for its Conda and Paris Hills projects.