Vanguard One project a milestone for the potash industry
It’s not outer space, it’s under ground, but Gensource’s Vanguard One project is going where no mine has gone before.
From the mining operation itself to the company’s vertically-integrated business plan, Mike Ferguson, the president and CEO of Gensource Potash Corporation, says the mine north of Moose Jaw will set a new standard for the industry. And, it’s starting from the bottom up, with a mining operation so environmentally friendly it isn’t even considered to be a development project at all.
“It’s huge. It’s a great milestone,” Ferguson says of the Province of Saskatchewan’s decision that the Vanguard One project is not required to complete a full Environmental Impact Assessment (EIA), the first potash mine to ever receive such a distinction. Ferguson says the project did not “trigger any of the requirements for an environmental assessment,” essentially deeming that the project isn’t a development. “So, it’s very exciting – the first potash project ever to proceed this way and for good reason. We simply don’t have an impact the way a traditional potash operation has,” he says.
The Vanguard One project will use selective dissolution mining technology, a form of solution mining similar to that already in use elsewhere in Saskatchewan. The difference is that, instead of using clean, fresh water, a highly concentrated brine of sodium chloride (Nacl) is injected into deep wells. The approach doesn’t require any workers or equipment underground and, since the Nacl solution can’t dissolve any more salt, it only dissolves potassium chloride (KCL) and the potash-laden solution is then pumped to the surface. “This is a potash mine like no one has ever seen before. There are no tailings; there are no brine ponds,” says Ferguson.
The smaller scale of the project compared to traditional mines is also a factor, with Vanguard One expected to produce 250,000 tonnes of potash per year, about a tenth of a typical potash operation. Ferguson says that means less of an environmental impact and less of an impact on the nearby communities. “There’s also a community or sociological impact due to the size of these things,” he says, pointing to the K+S Potash Canada Bethune mine, which he says is the “size of a small city.”
The project will employ about 150 people during construction and fewer than 50 people once it’s in operation. “So we see these things as the right size. They’re right size for communities in Saskatchewan and for the environment. They’re very small and distributed so we don’t create huge impacts in the one location,” he says.
Production at Vanguard One is now expected to begin in late 2020. The feasibility study is complete and the environmental assessment has been deemed to be unnecessary, so Ferguson expects construction to begin this winter. “We’ll start drilling the caverns in the wintertime on frozen ground when it’s nicer to drill on frozen ground rather than mud. We’ll start surface construction in the spring,” he says. Still to be finalized this fall is the financial package, and Gensource is working with a U.S. company to finalize an agreement to purchase all of the project’s final product. The company, which has requested anonymity for now, is “a Fortune 50 company in the United States; a very large and existing player in the fertilizer business,” Ferguson says.
That kind of vertical integration, where production goes almost directly to the user, is a key component of the Gensource business model, which also stresses being small and efficient. “Our definition of vertically integrated simply means creating that direct connection from the product produced in Saskatchewan to a specific, identified market,” he says. The U.S. company will provide that connection. “That’s what these guys bring to the table; they are in front of the farmer every day, buying their grain from them, selling them seed, and selling them fertilizer. So, they are the touch point directly between us and the farmer who puts this stuff on his fields,” he says.
Ferguson says the Vanguard One project is the first “module” of what Gen source expects to become the basic building block for future endeavours. “Our larger business plan, of course, is to have several of these things going and, once that starts to happen, we can start to service the end market much better than existing structure of the industry,” he says. That end market is, of course, the farmer who uses the output of a potash mine to fertilize their fields. Ferguson says the goal is to “provide a better supply chain for that family, for that person who’s operating that farm.”