Proceedings of the 48th Annual Forum on the Geology of Industrial Minerals Scottsdale, Arizona | April 30 - May 4, 2012 World Potash Developments Mark D. Cocker & Greta J. Orris Arizona Geological Survey Special Paper 9 Chapter 1 Proceedings of the 48th Annual Forum on the Geology of Industrial Minerals Scottsdale, Arizona | April 30 - May 4, 2012 Arizona Geological Survey M. Lee Allison, State Geologist and Director Manuscript approved for publication in 2014. Printed by the Arizona Geological Survey. All rights reserved. For information on the mission, objectives or geologic products of the Arizona Geological Survey visit www.azgs.az.gov. This publication was prepared by an agency of the State of Arizona. The State of Arizona, or any agency thereof, or any of their employees, makes no warranty, expressed or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed in this report. Any use of trade, product, or firm names in this publication is for descriptive purposes only and does not imply endorsement by the State of Arizona. Special Paper 9 Suggested Citation: Cocker, M.D. and Orris, G.J., 2013, World Potash Developments, in, Conway, F.M., ed., Proceedings of the 48th Annual Forum on the Geology of Industrial Minerals, Phoenix, Arizona, April 30 - May 4, 2012. Arizona Geological Survey Special Paper #9, Chapter 1, p. 1-16. FOREWORD The 48th Forum on the Geology of Industrial Minerals was held in Scottsdale, Arizona, April 30 - May 4, 2012. From across the U.S., Canada, UK, and Jamaica, more than 80 people attended. This was the Forum’s second appearance in Arizona; the first being the April 9 – 12, 1985, meeting in Tucson. The earlier Forum celebrated the University of Arizona’s centennial. This 48th Forum coincided with celebration of the State of Arizona’s centennial. The Forum on the Geology of Industrial Minerals has been held annually since its inception by the late Professor Robert Bates of Ohio State University nearly 50 years ago. The 48th FGIM was organized by the Arizona Geological Survey with support from the Arizona Geological Society, Clear Creek Associates, Golder Associates, National Exploration Wells & Pumps, the SME Dryer Fund, Arizona Rock Products Association, Arizona Mining Association, and the Arizona Section of the American Institute of Professional Geologists. Field trips were planned and moderated by the late Doug Shakel and included visits and guest lectures on the Colorado Plateau and Mogollon Rim, the minerals and geology of Eastern Arizona, and Phoenix area industrial mineral sites. Special thanks to: John Bezy for his remarks on Sedona; Paul Lindbergh for cogent discussions of Jerome; Brian Langford for his description of Phoenix Cement; the Jerome State Historic Park rangers for their historical overview; David Pelletier for his remarks at Drake Cement; Ted Eyde’s for his comments at Lyle Hectorite Pit; Melissa Hadley’s overview of Morton Salt; Dan McQuade and Kyle Henderson for guiding us through the Salt River Materials Group Beeline Plant; to Evvy Otis for remarks on Imerys Perlite; and Bob Foster for discussing the Feldman Quarry. We were fortunate to have Drew Meyer, President of the Society for Mining, Metallurgy, and Exploration (SME), as keynote speaker. His thought-provoking presentation set the tone for dynamic discourse throughout the Forum. The wide variety of papers presented fell into the following categories: Carbonates, Potash, Sandstones & Aggregates, Rare Earth Elements, Education & Outreach, Miscellaneous, and Arizona Geology. Papers from the Forum are posted following light editing for general clarity and standardization of bibliographies. Thank you to all participants, writers, sponsors, field trip coordinators and guides, the Scottsdale Cottonwoods Resort, and AZGS staff for making the 48th Annual Forum a smashing success. M. Lee Allison Director, Arizona Geological Survey Tucson, Arizona World Potash Developments Table of Contents Abstract 2 Introduction 2 Developments in Potash 3 Production and Exploration 3 Loss of Production 4 Increased mine production 5 Brownfield mine development 6 Greenfield Development 7 Advantages of Brownfield versus Greenfield Projects 8 Challenges for Greenfield Potash Projects 8 Energy 8 Water 9 Transportation 9 Deep water ports and safe storage facilities 10 Mining, maintenance, geological, engineering and management expertise 10 Production downtime 11 General construction costs and time required 11 Living facilities (30 to 50 + years) 11 Potash mining supply chain 12 Summary 12 References Cited 13 Figures 1. World map of significant potash-bearing marine evaporite basins 4 2. Pie diagram of the world’s largest potash producers 5 3. Expansion of the Allan mine headframe, Saskatchewan, Canada 6 1 World Potash Developments World Potash Developments Mark D. Cocker, Greta J. Orris U.S.Geological Survey, Tucson, Arizona, USA Email: [email protected] Abstract K+S, several government-owned entities, and many, relatively new, junior companies. While greenfield Potash is a non-renewable resource that is a exploration is valuable in defining new sources key ingredient in fertilizer along with phosphate of potash, brownfield expansion projects cost and nitrogen. Increased demand for fertilizers and considerably less and new production from these potash has driven potash prices from US$96/tonne in projects have ready access to existing infrastructure September 1990, to US$203/tonne in July 2007, to not likely present in greenfield operations. a current US$495/ tonne (April, 2012). A dwindling During the latter part of 2012 potash price supply of arable land worldwide coupled with softening has led to suspension of some of the population growth requires increased food production greenfield projects and production shutdowns. A price from that land. Potash helps improve crop yields and turnaround in early 2013 has strengthened the potash enhances flavour, color and texture to crops used as industry which is now looking at an upturn in prices food or used to feed livestock. Increasing populations through the remainder of the year. together with higher standards of living in developing countries result in increased demand for food and Introduction more protein from meat, as well as more fruits and vegetables. Developing countries like China, Brazil Potash denotes a variety of mined and and India have historically under applied fertilizers, so manufactured salts, all of which contain the element crop yields are low. potassium in water-soluble form (Jasinski, 2011a). Most of the world’s potash production has come Industry uses the term potash to refer to potassium from a relatively small number of mines in the United chloride (KCl), as well as potassium sulfate, nitrate, States, Canada, Germany, France, Belarus, Ukraine, and oxide (K2O) (Neuendorf and others, 2005). The and Russia. As of 2012, the leading companies in principal product, KCl, is referred to as muriate potash production include Potash Corporation of of potash or MOP, but potash grades are generally Saskatchewan (PotashCorp), Uralkali, Mosaic, expressed as K2O. The principal use (95 percent) Belaruskali, Israel Chemicals Ltd. (ICL), K + S, of potash is for fertilizer along with phosphate and Qinghai Salt Lake Potash, Arab Potash Company nitrogen. Potassium is an essential nutrient for plants, (APC), Soc. Quimica y Minera de Chile SA (SQM), animals, and humans with no known substitutes. Agrium, Intrepid, and Vale. Most of the presently Potash helps improve crop yields and adds flavour, active mines were established in the 1960s and 1970s, colour and texture to crops used as food or used to so much of their infrastructures are on the order of 40 feed livestock. to 50 years old. Increased demand for fertilizers and potash in Price increases since 2009 have encouraged the past 5 to 10 years can be related to the fact that mining companies to upgrade production capacity at fertilizer allows larger and more frequent crops to those mines with extensive reserves. Mine expansion be produced. Demand for food has exceeded supply and brownfield exploration (that is adjacent to current causing world grain prices to double from 2007 to mines) is another way to increase potash production 2011 (Brown, 2011: O’Brien, 2007). A doubling of capacity. Greenfield exploration has expanded with the world population to 6.9 billion from 1970 to the new projects in Thailand, Laos, Russia, Kazakhstan, present has required more food production (Brown, Uzbekistan, Belarus, Canada, United States, Eritrea, 2011). Potash-bearing fertilizer allows more crops to Ethiopia, Gabon, Congo, Brazil, and Argentina. be produced per acre, but that increased productivity Companies involved include BHP Billiton, Vale, 2 World Potash Developments is offset by the worldwide supply of arable land turnaround bodes well for those companies expecting dwindling from 0.45 hectares per person in 1961 to to begin production or increase production during the 0.25 hectares per person in 2010 (North American next several years. Potash Developments, 2011). Most of that decrease In 2010, world potash mine production was is related to population growth, although part is about 33 Mt of K2O equivalent. Canada is the largest related to over pumping of irrigation wells and falling producer of potash (9.5 Mt in 2010) among the 13 water tables, especially in India and China, as well as major potash-producing countries, followed by Russia, desertification