Huge potash discovery in the Mid West

25 Aug, 2011 04:00 AM
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 Potash West managing director Patrick McManus said it could only be a matter of five years before WA has the capacity to produce its annual quota of potash.
Potash West managing director Patrick McManus said it could only be a matter of five years before WA has the capacity to produce its annual quota of potash.

A WA company claims it has found the world's biggest potash deposit in the Dandaragan area.

Potash West said it could only be a matter of five years before WA produces its annual quota of potash.

The company plans to mine the deposit in a bid to take on international suppliers and reduce the cost of fertiliser for farmers.

With 2107 square kilometres pegged for exploration in the Dandaragan trough the company believes the venture has massive potential for farmers in WA.

Potash West managing director Patrick McManus said producing potash in Australia would push prices down and make farms more productive.

He said potash was a fertiliser in which the usage rates typically had not been as high as they could be in order to get maximum efficiency out of the land because the potash industry was previously controlled very strongly by major producers in the northern hemisphere.

But he wanted to assure growers in the area that the company's venture wouldn't mean massive negative implications or disruption.

"At the moment we have agreements with a couple of farmers but we have only just started making contact with the landholders in the area where we have exploration licenses to seek their permission to come onto their land and drill," Mr McManus said.

"It's in its very early stages so we don't want to ring any alarm bells.

"Given the size of the area our first step, via remote mapping, is to try to figure out how thick the various deposits are in different areas and then zone in to what we think is the most prospective area.

"Then we'll speak to shires and farmers in certain areas to see if we can gain access to, first of all, roads to do broad-spaced geographical drilling to figure out exactly what the ground looks like underneath.

"Then hopefully farmers would be interested in allowing us to go and drill on their properties."

Previous exploration by numerous companies indicated potash sediments were widespread for more than 150 kilometres along strike and 15km in width.

But the potash is tied up as a form of potassium in a mineral known as glauconite which is well spread within the greensand belt of WA's Mid West.

The deposits have been drilled and well identified as a source of potassium a number of times since the 1960s but the then low potash prices made them unviable.

"The deposits have been labelled unviable in the past," Mr McManus said.

"Current fertiliser pricing means potash is now about four times a tonne more expensive than what it was up until 2003.

"It was $80-$100/t and now it's over $400/t.

"By the time it is imported into WA it is north of $600/t."

He said there were a number of things the company needed to establish before any kind of mining took place.

"The material called glauconite, where the potash is found, is not the conventional source of potash that people mine in Russia and Canada," he said.

"It has a lower potassium content but on the other hand is closer to the surface and is closer to home.

"We need to figure out the best practice of extracting the potassium from the glauconite and once we have we will need to get a bit of a cost estimation on the process."

Parallel to that exploration work is underway to see where the glauconite deposits are thickest and of the highest grade.

"In general terms at this stage we're looking for areas that can be mined easily," he said.

"Our first studies are based on producing about the same volume of potash that WA currently uses each year.

"It's almost certain that if it can go ahead, WA would be self-sufficient in potash which would provide a great saving to growers."

Mr McManus said the first real indication of viability should happen toward the end of next year and if the preliminary drilling showed promise a further feasibility study would be undertaken throughout the next year, followed by financing and construction.

"We're probably about four to five years away from the commercial production of potash," Mr McManus said.

"Obviously before we go near any farms we'll be talking to farmers.

"Many producers in the pegged area are already familiar with the process of mining mineral sands and our exploration will be very similar to that."

The company's project comprises 10 exploration licences located between 50km and 230km north of Perth.

The tenements lie between the Brand Highway to the west and the Great Northern Highway to the east.

Potash West listed on the ASX on May 11 after a successful and oversubscribed $6 million IPO.

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The view of the PGA on this issue suggests that they also believe that the earth is flat. At
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And Rural Realist WAFF are even worse. Look at their call on single desk, GM, wool floor price