Estevan Mayor Roy Ludwig and Buffalo Potash CEO Steve Halabura. Photo submitted
ESTEVAN – On June 9 during a visit with the Estevan City Economic Development Board, Buffalo Potash Corp. CEO Steve Halabura formally committed to set up a solution mining research and development facility on land owned by the city.
The parcel is located beside the Southeast College in the Glen Peterson industrial development and is ideally sited for developing the type of test facility envisioned by Buffalo Potash, according to the company.
The proposed facility will house a prototype crystallizer and associated process equipment, a chemical analysis laboratory, and Buffalo’s regional office. The purpose will be to allow for the testing of potash brines produced from Buffalo’s first mining test sites at Disley and Odessa and to test processes and equipment designed for installation in the larger fertilizer production facility to be built in the Estevan – Bienfait area.
The plant, named the “Estevan Fertilizer Production Facility or “EFPF”, will make upgraded muriate of Potash (MOP), sulphate of Potash (SOP), hydrochloric acid, and calcium chloride for sale to North American markets.
Steve Halabura. Photo by Brian Zinchuk
Halabura, a regular columnist with Pipeline Online, said in a June 16 phone call that Saskatchewan is a leader in the potash resource. “We should also be leaders and solution mining research and development.”
He couldn’t say the value of the facility yet, because they don’t have the value of the test crystallizer yet, nor the building it will go it. The cost will likely be in the several million dollar range.
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It won’t be the scale of the fertilizer facility, however. They’re still looking at a number of parcels for the larger fertilizer facility.
Halabura said, “The R&D facility really is a great strategic location, with Southeast College literally, beside the lot. It’s in the new industrial area, where there’s hotels, restaurants in the vicinity; all the infrastructure is there so we can really speed that process.”
The processing facility needs to be on a rail line, he noted.
Timelines
The Estevan R & D facility brings the number of sites Buffalo is working on to three. The first two are the initial satellite solution mines planned for Disley and Odessa, Saskatchewan. Eventually product from those mines will be trucked to Estevan for processing at the aforementioned processing facility.
On the left is the Disley Block secured by Buffalo Potash. Map courtesy Ministry of Energy and Resources
As a solution mining outfit, the entire process will rely heavily on businesses that also work in the oil and gas service sector, from seismic surveys, drilling and service rigs to facility construction. Buffalo’s design, a patented process called “Horizontal Line Drive,” will involve three horizontal wells in parallel to extract the potash, but leaving the associated salt underground. That setup will be replicated over and over to build out each mine site.
It’s very similar in concept to steam-assisted gravity drainage (SAGD) extraction used in heavy oil and oil sands.
“We’ve got 18 months to begin construction of the R & D facility,” Halabura said. “The first mine, we have just finished permitting 3D (seismic survey) at Disley. We’re hoping to get out there soon and shoot the program and do our first drilling as soon as we have the data. That probably would be later in the summer.
The second mine site is near Odessa. “We’re getting interest in both properties,” Halabura said. “If we can do Disley and Odessa concurrently, we will. It’s strictly a matter of finance to those initial operations in place.”
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The war in Ukraine is having a dramatic impact on global potash markets, as Russia and its ally Belarus are key potash suppliers, and the Black Sea is a war zone.
Halabura said, “There’s a lot of momentum when it comes to fertilizer production. You know, the markets have been really, really choppy when you look at what the Dow has been doing, and the TSX, but investor sentiment in key niches, and fertilizer is one of those niches, there’s interest in anything that speaks to food sustainability. But we’re in a little bubble that’s kind of floating on the overall markets, and we don’t want to lose momentum.”
“We’re having some good progress in our private placement. That’s still moving ahead,” he said. “There’s quite a bit of interest. We’re happy with how that’s going.”
This comes at a time when Manitoba just approved its very first potash mine. It, too, is a solution mine along the lines of what Buffalo is working on, and of similar scale. Both projects are looking at 250,000 tonnes per year, although Buffalo is hoping to ramp up to 500,000 tonnes per year.
Halabura noted that large projects like BHP’s Jansen get a lot of coverage, but there’s considerable interest in smaller modular potash producers like Buffalo and Gensource.
“That’s important to note that, hey, this is another whole sector that doesn’t get that much press, but it can represent significant economic opportunity.”
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Feds gave money to BHP
He found it maddening that just this week, the federal government gave $100 million for the BHP Jansen Lake project. That taxpayer money went to the largest mining company in the world at a time when commodity prices are high and BHP is swimming in money. BHP’s website notes, “We have announced an interim dividend of US$1.50 per share, bringing total shareholder returns to more than US$22 billion over the past 18 months.”
“It was totally irrational,” Halabura said. “They’re doing it anyhow. They’re not a Canadian company. What’s going on?
“That really rubbed me the long way.”
He would like to see contributions to “the little guys,” too.
Homegrown
“Our vision is to be a homegrown, fully integrated producer of potash-based fertilizer. This means that Buffalo will not only have its own mines and potash upgrader, but with our own R & D facility focusing on innovative and sustainable mining and processing technology,” said Halabura. “Given the importance of potash to our economy, why shouldn’t we, as a province, strive to become leaders in developing the next generation of solution mining and potash production capacity?”
While in Estevan, Buffalo Potash also met with the South Saskatchewan Economic Partnership to discuss the Buffalo vision and plan. “Buffalo sees the partnership as a crucial element in diversifying the local economy, and it’s important for people elsewhere in Saskatchewan to understand how many advantages the southeast offers to investors and industrial developers. It’s not just about oil – it’s also about the ideal mix of energy, infrastructure, services, workforce, and investment support.”
Estevan Mayor Roy Ludwig said in a release that it’s been rewarding to see the Buffalo project advance as it has. “The Buffalo team has demonstrated its commitment to our community and developed the plan from a dream into something that is becoming real. I look forward to seeing the R & D facility come to life.”
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