The only potash mine in Manitoba plans to begin commercial production next month after nearly two decades of development.
The $30-million facility near Harrowby, a tiny hamlet in the western Manitoba municipality of Russell-Binscarth, will begin producing and stockpiling the agricultural fertilizer in June, said Daymon Guillas, president of the Potash and Agri Development Corporation of Manitoba.
The company is commonly referred to as PADCOM.
The commercial production caps off a 19-year effort by the privately owned company — commonly referred to as PADCOM — to plan, finance and build a potash mine in the face of considerable skepticism within the mineral-extraction industry.
“We’re the no-name brand. We’re not miners. Lots of people laughed at us and said it couldn’t be done,” Guillas said Thursday in an interview from Asessippi, Man.
“There’s a project in Saskatchewan that is name brand. They spent $300 million, and they haven’t produced anything yet. We spent $30 million, and we’re producing.”
The Harrowby facility, first envisioned in 2007, extracts potash from below the surface without excavating the massive caverns associated with the largest of Saskatchewan’s potash mines.
Instead, the Manitoba facility uses a process called solution mining. Brine heated to 40 C is poured into wells, where the warm, salty water dissolves the potash in the surrounding rock.
The potash-saturated solution is pumped to the surface and then cooled in outdoor ponds, allowing potash to crystallize back into a solid substance.
Guillas said the company initially installed a mechanical cooling process that did not produce enough potash for the company to become profitable. With the help of Saskatchewan potash-industry expertise, the company switched to outdoor cooling ponds, which it tested out earlier this year.
Guillas said the new cooling system, which required the company to obtain a new environmental licence, was the final technological obstacle the company had to overcome.
The company also faced a fiscal crunch this past winter, when a $77-million financing deal with a Dubai-based investment firm fell apart, requiring the company to seek more cash from its silent Canadian investors, he said.
“Our potash is Canadian-owned, not foreign-owned. Nobody can tell us what to do with our potash,” Guillas said.
The company has one administrative hurdle left to clear. It must complete a mine-closure plan, which Guillas described as an operating manual for all aspects of the mine.
The Harrowby facility is permitted by the province to produce 250,000 tonnes of potash a year. Guillas said he expects the mine to produce somewhere around 30,000 to 35,000 tonnes during its first fiscal year, which concludes at the end of April 2027.
“We get profitable at 15,000,” he said.
The mine should be able to scale to 250,000 tonnes by 2028-29 and then expand over a series of years to one million tonnes per year, if the financing is available, Guillas said.
To place that in context, Saskatchewan — the world’s largest potash producer — produces 25 million tonnes of the mineral per year.
Most of the company’s potash is destined for the export market. The company hopes to reach Europe and South America by using the Hudson Bay Railway and the Port of Churchill.
“We can go to Churchill and back in six days, so it’s a short train ride,” Guillas said. “So, the Port of Churchill lets us get product to a port and to a vessel in a very affordable way.”
Arctic Gateway Group, which runs the northern Manitoba railway and port, said it has the capacity to carry the volume of potash the company initially expects to produce and load it onto ships at Churchill.
“AGG recently added 30,000 tonnes of new bulk storage capacity at the port, which could be used for potash storage,” company president Chris Avery said in a statement.
Avery said the port will need more handling facilities to handle larger volumes of potash from PADCOM and the much larger potash mines in Saskatchewan. Arctic Gateway will also need to upgrade the railway to handle heavier loads.
“We believe there is a strong long-term case for Churchill to play an expanded role in getting western Canadian potash to international markets,” Avery said.
Guillas said the company is also looking at other rail routes but has not completed the logistics for export shipments if Churchill is not ready.
“We have markets. We have lots of markets, but we don’t have a path yet for that,” Guillas said.
In the meantime, the company is simply looking forward to commercial production. So is the provincial government, which stands to collect somewhere in the vicinity of $8 million a year in royalties once the mine produces 250,000 tonnes a year.
“We look forward to PADCOM becoming commercially operational and to begin delivering economic benefits for all Manitobans this year,” Manitoba Business and Mining Minister Jamie Moses said in a statement.
All it took was 19 years to get here, Guillas said.
“You don’t need to be a brand-name mining company to do it. You just have to have the guts and the patience to do it.”
