The potential of potash

The potential of potash

News that an area near Scarborough could hold the world’s largest deposits of high-grade potash has excited many in the area. But is this an appropriate development?

In the middle of June this year Sirius Minerals, a company that across the wider public at least had probably only been of interest to committed mining investors, made a widely publicised announcement about its latest find.

It said that an independent assessment of three test boreholes it has already carried out at its York Potash Project subsidiary suggested that there could be as much as 1.35 billion tonnes of high-grade polyhalite – a compound which can be processed to make potash - within the area to the west of Scarborough and the south of Whitby over which it has mineral rights.

To put it into human context, that would be enough to employ over 1,000 people directly, considerably more than that indirectly, in an area near a town which, despite ongoing successful attempts at regeneration, some of which have been covered in this magazine, could probably still do with something of a helping hand.

It is small wonder that Jim Dillon, chief executive of Scarborough Borough Council, has already spoken positively about the project, even before it gets to planning.

Potash INSET“This has the potential to be the single biggest investment North Yorkshire has ever had and would transform the area,” he said, adding that the council is already talking to higher education providers in the area to make sure they were providing the right skills for local young people to take advantage of what the project may have to offer.

Graham Clarke, operations director for Sirius Minerals, the company which runs the York Potash Project, says the kind of mining operation that could be in place here isn’t on the scale of the South Yorkshire coalfields.

“But there is over a century of mining potential here, and upwards of 1,000 jobs,” he says. Clarke, who has a long career in potash mining, says such a find is important too as a morale booster for an industry which, following the closure of many UK coal mines over the past two decades, is now down to employing probably only around 6,000 people in total in the UK.

“So an extra 1,000 would be significant,” he says. “I really think there is a national interest here too. The mining industry was the foundation of much of British industry, so it deserves special attention.” In fact, while the current projected mine may not be as significant as Britain’s coalfields, which went on to power the Industrial Revolution and with it the British Empire, it is some of these former empire colonies that could be making use of the potash that the project has to offer.

The mineral is mainly used in fertilisers around the world, and as the world population grows ever more above the 7 billion mark, it is likely to be more and more in demand in the future.

“Potash is one of three nutrients that plants need,” says Clarke, “and it is especially important now that the growth in world population and in particular the growth of towns is removing some previously excellent agricultural land that lies on the town edge.” Farmers in India and China, it seems, could well be looking to York potash to help with ever increasing demand.

So how did such a large deposit come to be here? While it may be hard to envisage now, as you drive around the hairpin bends with sweeping views that are such a common feature in the North York Moors, some 250 million years ago the whole area stretching from here to southern Holland was a placid salty sea, not unlike the Dead Sea in Israel today.

“Some 250 million years ago there was a saline sea between here and Germany,” says Clarke. “The salt dried out and the potash crystals came out of it. Now above all that is 250 million years of geology. The Germans are making use of this same Zechstein deposit.”

It’s not only the Germans either. Further south in the East Riding of Yorkshire, it is this same Zechstein seam which several gas companies are finding useful as a place to store imported gas – something the UK is due to become more and more reliant on as North Sea natural gas supplies dwindle.

Even within the North York Moors area, the Zechstein seam is hardly unknown. Before moving to Sirius last year, Clarke worked for over two decades for Cleveland Potash, a potash mine some miles further north at Boulby which has been running since the early 1970s and is now owned by ICL, an Israeli-based company that has potash operations all around the world, including the Dead Sea.

But Clarke says the surveys already carried out within the York Potash region suggest that what is on offer here is a considerable step up from what is being mined at Boulby.

There, he says, they are mining muriate of potash (MOP), a standard version of the product that currently supplies a £60m market around the world. It is however, very impure – only around 30 to 40% of what you bring out of the ground is actually potash.

By comparison, the polyhalite that York Potash will be taking out includes sulphate of potash (SOP). That’s a much, much purer form that could potentially have far wider uses, although for the moment the emphasis is still very much on the word “could”, as the market for SOP currently only stands at around £10m.

But it is growing, and Sirius, whose chief executive and founder Chris Fraser has a long track record in mining iron ore in Australia, reckons that, even if the seam they are interested in is located some 120 to 150 metres below the Boulby seam, it is now worth mining.

“This polyhalite hasn’t been mined before because the benefits of polyhalite have only recently been fully recognised,” says Clarke.

“But unlike MOP you can make it into several different compounds. Traditionally the supply of SOP hasn’t been as easy, and people have looked at converting MOP into SOP, but this is costly. Now we have the largest deposit of SOP in the world.

"It’s important as a fertiliser, but it can also be converted into gypsum for plaster, and the magnesium oxide from it can also be made into refractory blocks. Our project is about much more than just fertiliser.”

But of course, there is something we haven’t mentioned here. The York Potash Project may be the biggest and purest potash deposit in the world, but it also happens to be located within the North York Moors National Park, one of the UK’s most popular beauty spots and a key leisure and tourism destination because of that.

Wouldn’t mining here be rather inappropriate? Clarke says it wouldn’t necessarily be any different from what has been going on in the area for decades.

The potash seam here was first discovered here in the 1920s, he says, when people were initially exploring for oil and gas.

“But throughout history people have always mined this coast,” he says, “whether for jet stone, alum, or ironstone.

These views are all shared by people who understand what the National Park is for.” In any case, says Gareth Edmunds, the project’s external communications director, the company has already included a number of details into its plan which will hugely mitigate any potential disruption.

First and foremost is its plan to have the polyhalite shipped away from the mine through an underground pipeline to a port in Teesside.

“We are currently looking for a dock up in Teesside,” he says. Then there is the unusual plan of the proposed mines themselves. To minimise visual intrusion on the landscape, the headframe of the mine will actually be some 5 - 600 metres below the surface, and workers will access it from a drift mine or gently sloping tunnel down from the surface. (The company has relied on much on German research and technology so far in the project – the company it used to make the assessment of the deposit size is actually part of the former East German research institute. So it is gratifying to note that British engineering prowess has been responsible for these headframes. Alan Auld Engineering in Doncaster came up with the design.)

It is for this reason that Edmunds has been unwilling to compare the proposal too closely with the Boulby Mine, where all operations are clearly visible on the surface.

All the York Potash mineheads, by comparison, will be much less intrusive, he says. He even claims that Sirius is currently looking at the prospect of using geothermal energy from within the ground to supply all the mine’s energy needs – quite a tall order for an energy-intensive industry.

It is perhaps an indication of how seriously Sirius as a company takes its reputation in the area that Edmunds was the second person to be employed full time by the company when it floated at the beginning of last year.

External relations are clearly crucial. Still, he says the support the project has received so far from the local community has been overwhelmingly positive.

Parish councils have been asking how they can help, he says, and he even met one lady at a public meeting who had been living close to one of the company’s first test boreholes and told him that she missed seeing all the apparatus there.

“It was my little Paris,” she told him. On a dark winter night, trudging through the Forestry Commission woodland that surrounds many of the six borehole sites that have so far been worked, is not difficult to see how the drill head might resemble the Eiffel Tower.

Still, not everyone is so keen to share such romantic impressions. The North York Moors National Park Authority, which will be faced with making a decision about whether to permit such development when the formal application to start proper mining is made, says it won’t comment on any proposals until such an event happens.

But Tom Chadwick, chairman of the North Yorkshire (sic) Moors Association (NYMA), is prepared to.

“There has been no formal application yet,” he says, “but if there is one that resembles what they have been proposing so far, then we will oppose it. There is no place for industrial intrusion in this landscape. Yes, the Boulby mine has been there for almost 40 years, but it too is a blot on the landscape."

Chadwick claims – and at this point Clarke agrees with him – that the market for SOP is still relatively untested, and that it is only the huge increase in the market price of potash in recent years that has made the project viable.

But Chadwick, who is a former art teacher, goes further. He claims that what demand there may be for SOP in the immediate future will probably be satisfied by a mine that is already under construction in New Mexico.

He claims transporting such large amounts of polyhalite underground over such a large distance has never been tried before.

“And even if the frameheads below the surface, there will have to be an office on the surface, and to remove that amount of earth will require a hill of between 500,000 and 700,000 cu m – what are you going do to with that?

"There will also be security, which probably means fencing, and a road built up to the site.”

He acknowledges the employment argument, but points out that the major employer in the region remains tourism – which depends for its success on there being a landscape worth coming to.

“There is the problem that this kind of development can stigmatise an area, as we have already seen to a certain extent with Boulby, and that can make people think it’s not worth coming to, even when that’s not the case.”

Edmunds disputes much of this, and says the NYMA has turned down his offer of a meeting several times.

Polyhalite may not have been transported underground before, he says, but other much coarser material has been.

“The kind of mineral transport systems that we’re planning to use are successfully tried and tested all over the word and, once installed, are a highly efficient and effective way of moving the mineral without disruption above ground,” he says.

He is also confident that the proposed scheme will overcome any concerns about piles of debris.

But this is the kind of issue that will be much discussed when formal applications are put in place – and that could be soon.

Edmunds says that, if the scheme is approved, they hope to start mining by 2017 – possibly even sooner. There is also the matter of finance to raise.

Sirius chief executive Chris Fraser says initial start-up costs for the project will be £1.7bn, a sum he insists is achievable. Chadwick, however, has his doubts.

Three previous proposals to mine in this area in the 1970s came to nothing, he says, and he is also concerned that so much of what is being proposed is untested that the whole make-up of the project might change beyond recognition if and when it gets started.

He even alleges that, with the exception of Clarke, few of the Sirius management team have good enough knowledge of potash mining.

It’s a point that Edmunds disputes, as you might expect.

“Our team includes some of the most experienced and talented people in the mining industry,” he says.

The company as a whole is certainly attracting high calibre people.

Recent non-executive appointments to the board include Network Rail chairman Sir David Higgins, while just at the end of June Alan Watling was announced as the new managing director of York Potash.

He comes to the project from an iron ore mine in Sierra Leone. In the meantime, the community themselves could be getting busy with another spin-off from the project. Sirius has just launched York Potash Foundation, an independently run trust which will use 0.5% of the returns the company will be making once mining is underway on social, environmental and educational projects.

“That could add up to £3m a year,” says Edmunds. Combined with the work that is going on with local education establishments both through the council and through the project’s own education manager, it seems preparations are well underway.