By: Terrie Welwood
“It’s fifteen years in the development. It’s the right time, the right economic model and we’re looking forward to sharing the profits and spending the profits on regional development,” Daymon Guillas, president of Potash and Agri-Development Corporation of Manitoba (PADCOM).
Potash deposits don’t respect provincial boundaries, so there was little question that there would be potash around here somewhere. Thus, it wasn’t a really big surprise that a mineral rich deposit lies near Harrowby – just a couple of miles near the Saskatchewan border.
The issue of potash development is one that’s been around this area for decades. Over the years, the question quite often was more about ‘when or if’ the province of Manitoba would take steps to develop the industry.
That question was answered last week when premier Heather Stefanson made an announcement at the Prospectors and Developers Association of Canada conference in Toronto.
“This is a significant step forward in our commitment to establish Manitoban 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.”
Daymon Guillas president of PADCOM and Harvey Haugen, CEO of Beechy Potash Products and Greg Nesbitt, the recently appointed Minister of Natural Resources and Northern Development were in attendance for the premier’s announcement.
Guillas in particular, has been waiting to hear those words for years. In fact, in a phone interview shortly after the provincial announcement, you could definitely hear ‘the smile in his voice’ as he laid out the long road taken to get here and the innovation of environmentally friendly solution mining that has finally given the project the final push to bring it to fruition.
“When the last price spiked in 2006, 2007 and 2008, that triggered all those big beautiful expansions at Rocanville and Esterhazy, we really pushed Manitoba hard to develop Manitoba’s potash,”Guillas explained.
After about a year and a half of lobbying, letter writing and meetings the province finally said they were not going to develop anything here and that if Guillas wanted Manitoba’s potash developed, he’d have to find his own developer.
“So, we at the Russell Inn said ‘hold my beer, we’re ready to go’.”
That launched more calls, more letters and meetings with companies around the world.
“They were happy to see us,” Guillas said. “But for underground mining, Saskatchewan has bigger, better deposits that offer less risk.”
That level of outright rejection, Guillas said, went on from 2007 – 2014.
“We were pretty deflated at times because we spent about $1.5 million bidding on it and chasing it.”
Then, he said, Harvey Haugen, CEO of Beechy Potash Products Corporation tracked him down.
“He said he knew a lot more about potash than I do and that he had a better plan.”
Manitoba’s deposit, Guillas soon learned, is not meant for underground mining. Instead, solution mining is the answer.
Haugen has decades of experience in traditional underground mining and as the CEO of Beechy Potash Products has worked with the system of solution mining and the equipment needed to make the idea work.
“In Manitoba, we’re really on the very edge of the potash deposit,” Haugen said. “It’s very large and covers almost all of Saskatchewan but fingers of it extend into Manitoba.”
The layer that is here, Haugen said, is a very high-grade zone.
In fact, the one metre thick layer that they’re targeting consists of 70 to 80 percent potash.
“We drill a horizontal hole through that one metre zone for approximately one mile (1,600 metres) in that zone of very high-grade material,” Haugen explained.
Currently, there are two interconnected wells in that zone which were drilled in December and are ready to roll.
Brine is then pumped through – one end and back to the other – so there’s a continuous flow through that zone.
“So we dissolve the potash.” Haugen said, “We do not dissolve the salt.”
What comes out of the well is a solution saturated with potash.
“When that brine is cooled about half of the potash will come off the brine as it crystallises.”
The brine is then reheated and sent back into the system again in a continuous flow meaning very little water is used.
As only the potash is dissolved and removed once it crystallizes, the salt tailings of traditional underground mines are not a factor either.
“As we start up, it will be diesel power so our numbers in the first year won’t be great,” Haugen said. “But once there’s a hydro line in there, we’ll be using 100 percent Manitoba Hydro so we will be producing potash using zero carbon – which is unheard of.”
At the same time, because the process involves the recycling of brine, the amount of water being used is negligible as well.
“Zero water, zero carbon and zero tailings,” Haugen said. “You can’t get any better than that.”
In the end, the environmentally friendly mining process that would make the project a reality, means that PADCOM will be a completely different system involving no underground personnel at all.
“Because so many people work in mines in Saskatchewan, I always want to be very clear that Saskatchewan is the king and queen of potash mining in Canada and the world over,” Guillas said. “They have the highest quality and produce 15 million ton a year, when we start we’ll produce 50,000 ton and then 100,000 and then 250,000.”
“We have the same quality but we’re very small in comparison to Saskatchewan,” Guillas stressed. “But for our region, we’re pretty significant and that’s what we’re really proud of.”
Guillas stressed that the PADCOM operation at Harrowby will grow very slowly.
With no need for underground personnel, it’s expected the start up will involve about 17 employees.
“We don’t want to create false expectations,”Guillas said.
Once fully operational and up to the once to the 250,000 ton mark, he expects they’ll be looking at 25 employees.
As mentioned two wells are already operational on the property, which in total takes up only about a hectare of land.
“Oil wells in Manitoba do not require an environmental license and because we’re fall less invasive than that, we could drill in October.”
Drilling exacting where Haugen told them too they found exactly the high grade they needed.
“So now we have the confidence to continue.” Guillas said. “We’ve bought all the equipment and the building package and with the environmental license in hand, a way we go.”
Start-up, it’s expected will come in October.
During all the discussions, Guillas said, the idea of building a better and healthier business model took hold.
“Rheanne Gray has always been the social conscience of the Russell Inn company and an offshoot of our project will see continuous growth involving all of the partners – under the guidance of Ms. Gray who will head the regional development economic development committee.”
As the potash project took over more and more of his time, Guillas said, Leanne Bily, another long time Russell Inn staff members began to over see all the staff at the Inn, Subway and C-Store, labor costs and controls and Rheanne continues to drive the hotel company and business development.
“So without our awesome Russell Inn staff – Leanne, Rheanne and everybody else, this never would have happened.”
A profit sharing agreement has been set up with Gambler First Nation, Waywayseecappo First Nation, Birdtail Sioux First Nation and Treaty 2 lands and the Manitoba Metis Federation as well as with the RM of Russell- Binscarth.
Gambler First Nation has signed on as a twenty percent equity owner.
That partnership, Guillas said, will see the formation of a community economic development fund called Impower which will be chaired by Rheanne Gray and Leanne Bily will continue to take on more.
“We’re looking forward to the new business model,” Guillas said. “It’s a natural resource that’s owned by the public and it should be shared.”
“If all we’re creating is good jobs and the construction of a facility, when it’s a natural resource – when there’s long term wealth there will be more given back to the employees, the town, the region and the province,” he added.
“Unless we’re going to profit share it properly, leave it in the ground. So off the top, eleven percent of our net profit is being shared with the three local first nation communities, MMF and the regional economic development fund. So people who want to start up businesses, new technologies can go to Impower. We really want to enhance the quality of life in the region, help people startup businesses and that’s where Impower will come in.”