Muskowekwan Chief Reginald Bellerose provides an update on the mine plans on Sept. 2, 2016. Photo by Manfred Joehnck.
Muskowekwan First Nation and Encanto Potash Corp have finalized a mineral lease for a solution potash mine on Muskowekwan land northeast of Regina.
Under the federal Indian Mining Regulation, Muskowekwan Resources will be the lessee of the 61,400 acres containing the proven and probable reserves of 161 million metric tons of potash, and will further contribute the lease to the project with Encanto.
Encanto says the project will be the largest solution potash mine in the province. There are already two solution mines in Saskatchewan, which use injection wells on the surface. Brine is injected underground and is circulated throughout the mine to dissolve potash and salt. The solution is then returned to the surface and potash is separated and conditioned.
The province’s nine other potash mines use traditional underground machines and shafts to bring the product to the surface for refining.
The next step is securing financing for the project which is slated to cost $3 billion to build, said Gary Deathe, the director of corporate development with Encanto.
He said, considering the amount of potash reserves that are available to them, that should not be a problem.
“We will be meeting with strategic investors who may be so inclined to invest in a project of this size and meets the certainty of the arrangement we (Encanto) have arranged with Muskowekwan and the other two levels of government in order to have that comfort level to invest that kind of money on reserve,” he said.
Deathe said Encanto has a First Nations-first hiring policy, so they want to have as many Muskowekwan members with the right skill set working at the mine. He said there will be over 1,600 construction jobs and 400 permanent jobs once the mine is producing potash.
In February, the First Nation, Encanto, and the provincial and federal governments signed an agreement under the First Nations Commercial and Industrial Development Act (FNCIDA) legislation that applies existing provincial rules to large-scale projects on First Nations land.
FNCIDA works by reproducing the provincial rules and regulations that apply to similar large-scale commercial or industrial projects off reserves and applying them to a specific on-reserve project. This approach, called incorporation by reference, ensures that both on and off-reserve projects are subject to similar regulatory regimes. It increases the certainty for investors, developers and the public while minimizing costs.
Encanto has been exploring the possibility of a potash mine in southern Saskatchewan for years.
It signed a joint venture agreement with Muskowekwan First Nation in 2010 and in January it announced two new 20-year sales agreements with India-based firms.