The Manitoba government has approved Manitoba’s first potash development, allowing the Potash and Agri-Development Corp. of Manitoba Ltd. (PADCOM), Russell, Manitoba, to start extraction and production in western Manitoba. Premier Heather Stefanson made the announcement on June 14 at the Prospectors and Developers Association of Canada conference in Toronto.
PADCOM plans an initial 100,000 mt/y solution mine near the hamlet of Harrowby, on the Saskatchewan border, some 16 kilometers west of Russell. Thereafter, it plans to boost production to 250,000 mt/y, with the project having a 100-year mine life at that capacity.
“This is a significant step forward in our commitment to establish Manitoba as a global leader in sustainable mineral development,” said Stefanson. “Our government is proud to announce PADCOM has received all required approvals to move Manitoba’s first potash mining operation into production. We are working with Indigenous leadership and communities to promote participation in the mineral resource sectors and to ensure communities share in the benefits that result from growth in these sectors.”
Gambler First Nation and PADCOM have developed a partnership, with Gambler First Nation participating as a 20% equity owner.
“We are pleased to partner with PADCOM on this landmark project, which will create jobs and help spark further economic development opportunities in our community,” said Chief David LeDoux, Gambler First Nation. In addition, PADCOM will present community benefit agreements to several Indigenous communities in the area, the Manitoba Métis Federation, and the Municipality of Russell-Binscarth.
PADCOM has completed the first part of the project, in which two wells were drilled in Harrowby to explore the local potash resource and determine feasibility. Following the recent Environment Act License approval and signing of a mineral lease agreement with the province, PADCOM is now authorized to move the development to the next phase of production.
“This operation will use a more environmentally friendly mining process,” said Daymon Guillas, PADCOM President. “The physical footprint is small and the process will be using green Manitoba electricity, not fossil fuels. We are excited to partner with Gambler First Nation to develop Manitoba’s first potash operation. This initiative will help support Manitoba’s economic recovery and plays a major role in making Manitoba a global leader in mining and mineral development.”
The product will be white soluble 95-99.9% muriate of potash in a large granule form. Further compaction may be added later.
PADCOM’s plan is to sell the product to a single customer loaded on trucks. PADCOM said meetings were successful in developing a long-term offtake agreement. However, the deal has not been finalized, and the offtake partner has not been named. The buyer would be responsible for the logistics.
PADCOM said that its partner, Gambler First Nation, worked aggressively to find markets for the potash. Negotiations included Federated Co-op, as well as a consortium between a Quebec-based company and the Government of Cuba.
PADCOM said it turned down a Quebec/Cuba consortium and potential investors from California because their first questions were about cutting social and Manitoba royalties, as well as wages. PADCOM said it believes that local ownership is required to maximize the benefit from a public resource rather than out of country and/or large pension fund ownership that generally only care about increasing dividends every year “on the backs of hard-working, good people.”
As of December 2021, PADCOM said it employed six full- and part-time employees and had previously employed two Metis peoples. While the Metis peoples have recently left the company, it is hiring two additional full-time staff from the Gambler First Nation. The project is expected to create some 17-25 jobs, with production expected to begin this fall.
In addition to Gambler First Nation being a 20% partner in the project, 11% of the net profit will be given as follows: 1% each to Gambler First Nation, Birdtail Sioux First Nation, Waywayseecappo First Nation, Treaty 2 Territory, Manitoba Metis Federation, Specialized Middle School Program, and Citizenship University Program; and 4% to Socio-Economic Development Fund.
The entire footprint of the project is one hectare, privately-owned by PADCOM, which includes an underground pipeline loop that extends approximately 1,600 meters horizontally to access the potash. The complex will also include a potash processing facility with centrifuge and dryer, a crystallization plant, product storage and truck loading, water, brine and propane tanks, intake well of potash brine, downhole injection of brine well, and ancillary structures, including a permanent office. Potash will be mined using hot brine injected and extracted via wells. The project is literally on the border with Saskatchewan, and is an extension of the rich potash seams in that province.
Beechy Potash Products Corp., Beechy, Sask., is also a partner in the project. Beechy President Harvey Haugen will direct the planning for the plant at the local level. Haugen owns the technology patent PADCOM is using for the solution mining. PADCOM said the technology has a reduced environmental footprint, eliminates the necessity of salt storage on the surface, and reduces energy and water consumption.
Haugen told Green Markets that the project is about 50% complete, and that financing is in place to complete the project. He said the costs are very low compared to traditional projects.
Once up and running, Haugen said the plant’s low capital cost model can be replicated elsewhere, with plants envisaged for other locations.
The product will be initially transported by truck and then eventually rail to markets in Canada, the U.S., and internationally. The plant is just across the road from a CP Rail siding. PADCOM expects up to 7-8 truckloads of potash trucked out per day when the plant achieves 100,000 mt/y capacity or 274 mt/d, compared to some 40 trucks a day at a nearby Bunge canola plant. Another neighbor is listed as the Twin Valley Co-op’s Anhydrous Ammonia Depot.
PADCOM has an application to Manitoba Hydro to access power for the project site. If installation is delayed, the project will proceed using a diesel generator until installation can be completed by Manitoba Hydro.
Water will be trucked to the site from the nearby Russell Municipal Water Plant. This will require an estimated nine truckloads per day using their existing 4,200 gallon trucks, with the potential to be reduce to 2.5 truckloads based on plans to buy larger trucks. A water well at the site is under consideration, but would take additional regulatory review.
PADCOM said the potash resources have been studied by a number of companies over the years, with some 51 drill holes intersecting its potash zone. A major proposal was made by Canamax Resources (Manitoba Potash Corp.) in 1987 for a conventional potash mine.
BHP Billiton made a similar study in 2009. The Manitoba government put the project up for bids in 2015, and PADCOM was the successful bidder. It said its own study prior to purchase showed a total resource estimate of 231-521 million mt across both the North and South Blocks of the resource.
PADCOM said the North Block, on which it is focusing, has an estimated 111 million mt, according to a BHP study, with a 20-year life for a 2 million mt/y mine.