Economy Features

Manitoba’s next big thing

Potash. Photo provided by Steve Halabura
Potash. Photo provided by Steve Halabura

We hear a lot about Saskatchewan’s potash, but not much about Manitoba’s potash deposits. In fact, many people do not know that there is a sizeable deposit of the precious pink fertilizer in the Keystone Province.  

Potash 101
Potash is a generic name for the chemical compound potassium chloride. In nature it occurs most commonly as the minerals sylvite and carnallite.  Potash is a vital plant fertilizer, part of the “N-P-K” trio that farmers are familiar with. It’s an inorganic material that cannot be synthesized from something else (like urea fertilizer) so it must be mined from rock beds or precipitated from potassium-rich brines.

Potash will be around for a long time.  Because it cannot be synthesized from other raw materials (like urea can be made), every year new supplies must be mined. Long-term world demand for potash has grown at an average annual rate of between 2.5 to 3.0 per cent since 2000, driven by the expansion in the production of grains, oilseeds, fruits, and vegetables with increases in food demand driven by population growth, declining soil fertility, and climate change.  

Before the discovery of potash in Saskatchewan, the fertilizer was mined first in Germany, then in New Mexico.  After the Second World War, potash discoveries in Saskatchewan, Russia, and Belarus took hold as deposits in Germany and New Mexico were mined out.  Today, the world leaders are Saskatchewan, Russia, and Belarus, with lesser supplies in China, Israel, Brazil, and the United Kingdom.

Why is the potash deposit on the Canadian Prairies so big?  Some 385 million years ago a time referred to by geologists as the “Middle Devonian,” Saskatchewan and the western part of Manitoba was a vast land-locked inland sea called the Elk Point Basin located at the equator. For millions of years, seawater from a larger global ocean seeped into this inland sea, where the water evaporated, leaving behind the salts.  These salts were buried and today they are called the Prairie Evaporite Formation.  

By “big,” I mean REALLY BIG.  Next door, Saskatchewan’s vast potash resource ranging from 76 to 125 billion tonnes of potash (KCl) which at current production rates, is at least 2,000 years of mining life.  Saskatchewan is the world’s largest single potash producer at 31.8 per cent of the total, with Russia and Belarus having a combined production of 37.6 per cent.  In terms of exports, Canada (i.e., Saskatchewan) is the largest exporter at 39 per cent of the total, with Russia and Belarus collectively exporting 40 per cent, or 22 million tonnes of KCl.

Manitoba’s potash
Where does potash occur in Manitoba?  In the ground, potash occurs in four distinct beds, named in descending order the Patience Lake, Belle Plaine, White Bear, and Esterhazy Members.  Only the lowermost White Bear and Esterhazy Members extend into southwestern Manitoba. The known areas of potash in Manitoba are divided into three geographic areas, these being the northernmost Russell-McAuley area, south of the Yellowhead Highway and immediately east of the producing Esterhazy and Rocanville potash mines, the central Daly-Sinclair area along the TransCanada Highway, and the southernmost Pierson area immediately north of the US border.  

The only actively explored area is the Russell-McAuley area, because here the potash beds are shallowest and are of sufficient thickness and grade to economically mine using underground mining methods. Resource estimates for the Russell-McAuley area are just over one billion tonnes of potash, while not as large as Saskatchewan’s area, is still enough for a mine or two.

A history lesson
The first report of the possibility of potash underneath the lush farmland of the Prairies was reported by Canadian geologist J. B. Tyrrell in 1892.  During a trip across western Manitoba, Tyrrell sampled salt springs and discovered that the water contained traces of potash, or potassium chloride as its known by chemists.  This was confirmed in 1914 when another Canadian geologist noted that comparison of the potassium content of the salt springs should encourage the systematic exploration for potash deposits in Manitoba.   

The first discovery of the potash mineral sylvite was in gamma ray recordings taken from a deep oil exploration well drilled in the early 1950s by the California Standard Company (now Chevron) at Daly, some 15 kilometres west of Virden.  Since Calstan was an oil company, the well became the first oil producer in Manitoba and the potash occurrence was overlooked.  

Manitoba’s first potash development was approved on June 14, 2022. Announced at the 2022 Prospectors and Developers Association of Canada conference by Premier Heather Stefanson, Potash and Agri-Development Corporation of Manitoba is leading the work, along with Gambler First Nation participating as a 20 per cent equity owner.

“This operation will use a more environmentally friendly mining process. The physical footprint is small and the process will be using green Manitoba electricity, not fossil fuels,” Daymon Guillas, president, PADCOM said in June. “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.

By 1956, another seven oil exploration wells indicated the presence of potash; however, active potash exploration in Saskatchewan spilled over into Manitoba, with the drilling of two potash exploration wells near Russell in 1956 and 1957.  Cores were taken and the presence of the mineral was confirmed, leading to the mining companies Tombill Mines and Sylvite of Canada (a subsidiary of Hudson Bay Mining and Smelting) drilling an additional ten successful exploration wells by the mid-1960s.  The same group had a potash lease five kilometres west of the Saskatchewan border, and in 1969 decided to develop a mine on the Saskatchewan lease, which is now the Nutrien Rocanville mine.  

About the same time Prairie Potash Mines Limited, a subsidiary of Inco Ltd., was exploring a large block about 15 kilometres south of the Sylvite leases. The company drilled and cored 15 wells, outlining sufficient potash reserves to supply a one million tonne per year mine for 50 years.  Unfortunately, new mines coming into production in Saskatchewan created an oversupply in the market, collapsing prices and leading projects not yet at the mining phase to shutter.  Prairie hung on until 1977, when the long period of low prices made it abandon its leases.  

In 1980 International Minerals and Chemicals Corporation (IMCC), the owner of the Esterhazy mines west of the Manitoba-Saskatchewan border, entered into an agreement with the Province of Manitoba whereby IMCC would explore the potash deposit in the McAuley Area.  To the north in the Russell area, a similar block was taken by Amax of Canada Limited. Both projects succumbed to continued weakness in markets and pricing and for the next 35 years, the western Canadian potash scene was dead. 

The period 2005 to 2013 saw a major run both in potash demand and price.  This was brought about by the shuttering of old production in the former East Germany, the flooding of a mine in Russia, and a global expansion of farmland and thus fertilizer needs.  Exploration erupted across Saskatchewan and Manitoba, where two new companies—in the Russell-McAuley area with Western Potash to the north and Agrium to the south—undertook exploration works, including seismic surveys and new drilling.  After doing their work, Agrium moved back to Saskatchewan to concentrate on a property near Melville and Western to its Milestone land block southeast of Regina.   

Quo Vadis, Manitoba potash?
After all that work, why no mines in Manitoba? 

Manitoba potash has certain advantages. The beds are shallow, so would not require as deep a shaft as in Saskatchewan.  The potash ore is high grade and relatively clean, containing only minor amounts of clay.  Finally, there is good road and rail connections which is very important when it comes to shipping product.  

But there are also disadvantages. Manitoba’s deposit is right at the edge of the potash deposit, so the naturally occurring fresh waters seeping in from the edge have created mining hazards where the beds have been washed away. The beds overlying the potash are also water-bearing, which poses a hazard to underground mines. Finally, the beds do not form a broad blanket, but form a narrow north-south embankment, which makes it tricky to lay out a big and flat underground mine.  These factors increase the risk and mining cost and have been enough to scare conventional miners back to Saskatchewan.  

But here is where innovation may be the key to unlock potash’s wealth. The traditional mining methods of underground tunnels and large vertical solution caverns require lots of capital to build and use up valuable resources like fresh water.  “New Generation” companies like Buffalo Potash and Gensource Potash hope to use selective solution mining and new technology to allow for cheaper, and more efficient potash production, while using less water and leaving less surface waste salt.

In closing, here are some statistics from the world’s largest resource and producer—from right next door in Saskatchewan. Using government figures, potash year-to-date production in 2021 was some 7.4 million tonnes versus some 7.7 million tonnes in 2022, which is increase of 4.5 per cent.  However, year-to-date sales in 2021 was $2.94 billion versus $8.53 billion in 2022, which is an increase of 190 per cent.  If we look at average per-tonne realized price, the 2021 year-to-date was $399 per tonne versus a year-to-date 2022 price of $1,108 per tonne.

Yes, Manitoba, potash is a great business—time to get to it!


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