$330 million potash mine moving forward
For years the idea of potash mining in southern Lea County was met with head-shakes and raised eyebrows and the general idea of believing it when it happens.
Last week PolyNatura made the idea closer to reality by announcing it has entered into an agreement with the Nitron Group, LLC., for the supply of multintrient polyhalite products. Under the agreement, Nitron will purchase 75 percent of PolyNatura’s production (1.5 million tons annually at peak production) over a five-year period commencing from first production.
Established in 2008, Intercontinental Potash Corporation (IPC) brought forth the idea of a potash mine in southern Lea County. In 2017, IPC was bought out by PolyNatura, with the goal of building the potash mine. PolyNatura officials are planning for a $330 million polyhalite mine to be built and operational 27 miles west of Jal by around 2022.
“We are excited to partner with one of the most respected names in the global fertilizer industry,” said PolyNatura’s Managing Director Graham Wheelock. “Financial strength, geographic reach, and deep industry knowledge make Nitron the ideal partner to distribute our organic fertilizer globally, enabling farmers around the world to improve crop yields and quality.”
Located deep underground, polyhalite is a naturally occurring mineral that can be applied directly as an organic fertilizer with only minimal processing. Raymond Hoyum, affiliate professor at Auburn University’s College of Agriculture stated polyhalite is totally water soluble and contains potassium, magnesium, calcium and sulfur.
“So it provides balanced crop nutrition,” Hoyum noted. “As growers continue to strive for high yields and improved crop quality, poly-halite should be an essential part of their total fertility program.”
According to a PolyNatura release, polyhalite’s constituent nutrients provide balanced nutrition for crops, supporting improved yields and quality. It is approved for organic use by the Soil Association and Organic Farmers & Growers in the U.K. and similar organizations around the world.
Established in 1982, Nitron is a trader and distributor of fertilizer products. Serving clients in 65 countries, Nitron sold 7 million tons of fertilizer in 2018. The plan is for PolyNatura to build the mine and have the polyhalite transported to Jal. That is where Nitron will take over the transportation process to Houston, then shipped out and distributed to areas throughout South America.
On Monday Wheelock talked about what’s next for PolyNatura. With an buyer for its product in hand, the corporation can begin the search for the $330 million needed for financing the project.
“If everything goes right we are looking at getting the financing in the next 2-6 months,” Wheelock said. “We will start the permitting process as well since the site sits on state and federal land.”
Wheelock doesn’t have an idea on the number of jobs the mine will bring because there is no final determination on the size and design of the mine. He said it will take three years to build the facility — 12-13 months to construct the aboveground buildings and another two years to build the mine. He added there will be future position openings at the current Hobbs office, which only has a handful of employees.
“All we know at this point is that it will bring in hundreds of jobs to Jal and southern Lea County,” Wheelock said. “While many will come from the Jal area, there will be several people moving into the area because of these jobs.”
Steve Vierck, executive director of the Economic Development Corporation of Lea County, said the announcement is good news for the regional economy.
“That industry like a lot of the extraction industry, whether it is minerals or oil and gas, demands a lot of capital,” Vierck said on Monday. “It is challenging to enter in agreements or identify a source of capital, so I think it is encouraging in terms of better enabling PolyNatura’s project to move forward.”
Vierck believes the PolyNatura/Nitron agreement will help the continued move of diversifying the county’s economy. However the county still needs to diversify where it has a competitive advantages.
“When you’ve got the richest minerals in the world, then it is a competitive advantage,” Vierck said. “This sounds like it will significantly move the ball forward in terms of this operation happening.”
Vierck also said that jobs in the potash mining industry tend to be high paying, which means the financial impact will be even greater because salary and wages are higher than that of a normal operation.
“Potash mines also, because they demand so much capital in the construction and the equipment, it can have major benefits to particularly school districts that are particularly dependent on property taxes,” Vierck said.
Todd Bailey can be reached at .