“Market rumours” about brine flowing into its Esterhazy, Sask. potash mine have led U.S. potash producer Mosaic Co. to describe the inflow as “elevated” but still inside historic range.
Mosaic, a Minneapolis-area firm majority-owned by Cargill, said Thursday that brine inflow rates at Esterhazy, about 90 km southeast of Yorkton, rise and fall regularly, and that while the current inflow is elevated, it’s “within the historical range of inflows at Esterhazy.
“The company is evaluating the inflow and is managing it as in the past,” Mosaic said in a release, noting it has “successfully mitigated” inflows at the facility since 1985, when salt-saturated brine first began flowing in the mine.
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While Mosaic has managed brine in the past, some inflows have been more expensive than others. In December 2006, a major inflow required pumping, storage work and injections of calcium chloride to control, reducing brine inflow to 5,000 gallons per minute by early March 2007.
While that inflow had no effect on the Esterhazy mine’s production, the company in March 2007 budgeted for related costs of $30 million to $40 million in its 2006-07 fiscal year.
The interconnected K1 and K2 mines had previously operated at Esterhazy since 1962 and 1967 respectively. Most recently, the company completed a $35 million expansion at Esterhazy in late 2006 that brought the facility’s production capacity to 5.3 million tonnes of potash per year.
Mosaic in 2008 announced plans for two further expansions at Esterhazy in response to what was then “robust” global demand for potash. The two developments were each expected to add 900,000 tonnes of annual production by 2012 and 2020, at costs of $700 million and $1 billion respectively.
Due to the resulting rapid rise in potash prices, however, demand soon softened significantly and potash firms began rounds of shutdowns and layoffs, starting with a temporary layoff for 700 staff at Esterhazy in early 2009.
