The economics and marketing of Canadian potash

CIM Bulletin, Vol. 73, No. 815, 1980

M.A. UPHAM, President, International Minerals & Chemical, Corporation (Canada) Limited, Toronto, Ontario

In 1943, potash mineralization was first recognized in the Prairie Evaporites of the Province of Saskatchewan in a deep oil-well hole. Exploitation started in 1950 under a shroud of doubt that this huge reserve could be mined. It was fraught with almost insurmountable physical problems in penetrating the Prairie Evaporites. After 12 years of experimentation and development of new shaft-sinking methods, mining equipment and processes to treat the high-grade potash ore (sylvanite), a new era of high-risk resource development dawned in Saskatchewan.The development of 10 new mines opened up the largest known mineable potash reserves in the world and Canada became the second largest producer of potash to supply domestic (U.S.A. and Canada) and overseas markets. A monumental program in marketing—devising new transportation systems and strategically locating warehouses—was developed in order to expeditiously service domestic and overseas customers. The year 1969/70 started a period of overcapacity and the problem of prorationing. As the market strengthened in 1974, the Saskatchewan Government applied the reserve tax to the industry. Then, they announced the setting up of a Crown corporation to acquire ownership by purchase of up to fifty per cent of the industry. During this time, potash was discovered in New Brunswick within 50 to 60 miles of a seaport, where two deposits have been explored by the same pioneers who started the potash development in Saskatchewan.With this background, the paper will examine various elements of the economics and marketing of Canadian potash.
Keywords: Industrial minerals, Potash, Markets, Saskatchewan, New Brunswick, Underground mining, Solution mining, Production costs, Taxation, Exports, Transportation.