Fertilizer company K+S has newest Sask. potash mine

The German fertilizer company K+S held a groundbreaking ceremony in Saskatchewan Tuesday, for a resource — potash — that lies 1,500 metres below the surface.

The German fertilizer company K+S held a groundbreaking ceremony in Saskatchewan Tuesday, for a resource — potash — that lies 1,500 metres below the surface.

The event was notable because work on the site will lead to the first new potash mine in Saskatchewan in nearly 40 years.

The $3.25-billion Legacy mine project is near Bethune, about 60 kilometres northwest of Regina.

"People are watching very much what we are doing," K+S chairman Norbert Steiner, said Tuesday.

"Our time frame is very tight as we want to have the first production available in the year 2015, maybe in the second half, not much, but we should start with that and then ramp it up 2017 to two million tonnes. And then the secondary mining phase will come along with more."

Under skies that threatened rain, company officials and politicians were escorted around the future mine site.

K+S will use a solution process to remove minerals from under the rolling green fields that cover most of the land. Solution mining involves dissolving underground water-soluble minerals with water, which is then extracted from the ground and the minerals recovered from it.

Saskatchewan has the world's largest deposits of potash, a mineral mainly used in fertilizer, and Steiner said the resource will help feed the world for generations to come.

"This is why we are investing a massive amount of effort, energy and capital into this project," he said.

"We believe that the Legacy project is an investment in the future of our company, an investment in the people of Saskatchewan and an investment in a sustainable future."

K+S, the world's fifth-largest potash producer and No. 1 producer of salt, acquired the project when it bought Vancouver-based PotashOne in early 2011.

Legacy will occupy only a small area of the property acquired in that deal.

The project is expected to create more than 1,000 jobs during peak construction and employ 300 people when the operation hits full production.

The German potash investment is part of a growing trend of mining expansion in Saskatchewan. Other companies — from PotashCorp of Saskatchewan to Anglo-Australian mining giant BHP Billiton — are also expanding or building new mines in the prairie province.

It's good news for Saskatchewan's bottom line. The government collects royalty money from companies that develop resources and that has helped fill provincial coffers.

Saskatchewan's Energy and Resources Minister Tim McMillan put on a hard hat and picked up a shovel at the groundbreaking. He said it may be the first new mine in nearly 40 years, but he hopes it's not the last.

"We hear about other players in the market that have invested billions of dollars already into potential mines and are yet to make the go-no go decisions. I would think it's very likely that this isn't the only (new mine), that there will be several more," said McMillan.

"We think that we have a great resource. We have a great business environment and there's a lot of optimism in this industry."

Steiner said being in Saskatchewan for the groundbreaking brought back memories of one of his favourite childhood books.

It's about a young Mountie conducting his first investigation, his posting in Regina and a horse ride to Moose Jaw for supplies, Steiner said as he propped the tattered book on the podium.

"I can hardly believe that I'm right here today, near Moose Jaw, as the representative of an important company."

But it was more than fondness for a book that brought K+S to Saskatchewan. Steiner said the company did its homework before launching the project and found the province to be "promising."

"We have analyzed a lot of different issues and a lot of different projects and at the very end Saskatchewan turned out to be the right place. The infrastructure is OK. I think also the legal environment in which we are is better than in some countries in Asia or in Africa," he said.

"We want to become bigger. We want to be a part of the potash industry that is growing with the demand and this is why we are here in Saskatchewan."