Regina water deal could be worth $200M, potash firm says
A potash company says it has signed a water deal with the City of Regina that could be worth $200 million over 45 years.
Western Potash wants to build a potash mine 30 kilometres southeast of the city. Known as the Milestone project, it will be a solution mine in which the salty mineral is flushed out with water and dried on the surface.
Uses treated sewage
Under a "definite agreement" the company says it signed earlier this week, the city will provide up to 60,000 cubic metres per day of effluent — treated sewage. That's the equivalent of 24 Olympic-sized swimming pools of liquid per day.
The company plans to build a pipeline to transport the liquid to the mine, which is still in the planning stages.
The treated sewage would otherwise end up in Wascana Creek, so the diversion is expected to improve creek water quality, but also lower the water level, according to city and company officials.
More studies to be done
Western Potash said Monday it is completing a feasibility study to proceed with the mine. City councillors gave preliminary approval to the water deal in June.
"Western Potash Corp. remains involved in ongoing negotiation with numerous parties, any of which could lead to equity and debt financings, joint ventures, takeovers or other types of merger transactions to advance the development of the Milestone project," the company said in a news release.
Although the deal is potentially worth hundreds of millions of dollars to city coffers over the long term, it could be years before the money starts flowing.
However, Western Potash has paid the city $500,000 as a "commitment fee," the company said.