You’ve heard of shovel-ready projects?
Western Michigan University’s Michigan Geological Repository for Research and Education, working in conjunction with the company Michigan Potash, said that it has rediscovered a mineral deposit in West Michigan potentially worth billions of dollars that could establish Michigan as a leading U.S. supplier of a key fertilizer used by farmers worldwide, reports the Kalamazoo Gazette.
“This is the United States’ only shovel-ready potash project,” said Theodore Pagano, a potash geologist, engineer and general manager of Michigan Potash Co. LLC, the company that now controls the Borgen Bed, which lies under 14,500 acres in Mecosta and Osceola counties. “What we’re looking at is the introduction of an industry that is critical to the economic health of the state. We’ll be producing a Michigan product for Michigan farmers that would dramatically reduce the expensive transport costs on the more than 300,000 tons of potash consumed in our state annually.”
At current market prices, the deposit is estimated to be worth $65 billion, said Pagano in a phone interview with MLive/Kalamazoo Gazette. Michigan Potash has been purchasing the mineral rights, which the previous owners had let lapse, for the past three years, as well as making sure it was technically, economically and logistically feasible to put the deposit into production, he said.
Production would not begin until mid-2014 at the soonest, said Pagano, who estimated it would take about three years for a build-out. He estimated that the project would create 300 construction jobs, as well as 110 full-time jobs at the site.
The high quality of the mineral resource has the potential to create a multibillion-dollar industry in Michigan that would surpass the state’s historical oil and gas production revenues, as well as create several hundred jobs in Osceola and Mecosta counties, where the deposit is located, said Pagano.
It also could help the state’s agriculture industry, as well as the Midwest as a whole, offering a locally sourced supply of the fertilizer for corn and soybean farmers, said the WMU geologists who worked on the project.
“One of the things that makes this so valuable is that it is an incredibly rich deposit that is in easy reach of the enormous demand from Midwest corn and soybean farmers who operate within a 500-mile radius of this deposit,” said William Harrison, professor emeritus of geosciences and director of the geological repository at WMU. “This is an opportunity for new wealth to come from the use of natural resources never tapped before.”
Potash, potassium chloride, is found in areas once covered by inland seas. After the seas evaporated, the potassium and sodium chloride deposits crystallized into potash ore and were covered by layers of rock and soil. Potash is mined in 13 countries, including Canada, Russia and Belarus. In the U.S., New Mexico is by far the largest source, with smaller amounts mined in Utah and Michigan. U.S. domestic potash production has declined by 65% since 1962, and the country imports more than 82% of its potash fertilizer. U.S. potash prices increased 1,000% between 1962 and 2012, before dropping this summer.
In the Midwest, most corn and soybean farmers get their potash from New Mexico or Canada and can pay upward of $400 a ton. Michigan farmers used about 300,000 tons of potash annually. About $40 to $60 a ton of that cost is for transportation, said Linda Harrison in a phone interview.