Potash Mining
Potash MiningHistory of Potash Mining
Michigan’s potash mining history is marked by repeated failures, beginning with Pittsburgh Plate Glass’s discovery of high-grade deposits in the 1980s and construction of a small plant in Hersey that changed hands multiple times before Mosaic Company finally shut down potash production in 2013.
Even experienced mining giant Mosaic found the operation unprofitable and converted it to salt-only mining, letting valuable mineral leases lapse – a telling sign that experienced operators found Michigan potash economically unviable.
History
In 1985, PPG Industries established Michigan’s first potash solution mine in Osceola County. Over the next 30 years, various companies owned and operated that facility with hopes of expansion and increased profit margins.
Eventually, each of them sold out and moved on. In 2010, when Theodore Pagano first began leasing for his newly-formed “Michigan Potash Co. LLC”, he made it known that he intended to purchase the former PPG operation (then owned by Mosaic). He was never able to accomplish that.
Michigan Potash subsequently purchased a much smaller site nearby, onto which it hopes to squeeze an operation almost 8 times larger than the original one. Locating near the prior mine offered several potential advantages:
- The company could avoid sinking millions of dollars into drilling deep exploratory wells (which PPG had already done).
- It may be possible to avoid costly environmental testing, studies, and assessments by “recycling” those conducted by PPG almost 40 years ago.
[ Unfortunately, the DEQ, when presented with those old studies, maps, tables, etc., failed to notice (or possibly didn’t care) that Michigan Potash had neglected to include any surface information or hydrogeological testing or studies about its own site, which differs dramatically from the old PPG site. This lack of oversight likely resulted, in part, from chronic underfunding at the DEQ, coupled with its well-established pro-development stance. ]
Both the EPA & DEQ accepted the substituted PPG information, even though:
a) It pertains to a site which differs significantly in both topography & hydrogeology.
b) The data does not reflect recent precipitation patterns.
We figure that by the time these companies come to us, they've done all their homework. We usually just go ahead and issue permits. If problems come up in the future, we'll deal with them then.- Mel Kiogima, Sr. Geologist, Michigan DEQ Discussing Michigan Potash Project 2/1/17
In 1985, as now, there was much excitement over a coming "Potash Boom"
With expectations of growth driven by job creation and royalty payments to landowners. A relatively small number of jobs were created, but local landowners never received significant royalties. The area population actually declined to the point that the local school was permanently shut down.
MPSC officials discuss their involvement in “rediscovering” this potash deposit (despite it having been mined until 2013). They go on to point out that Mosaic (the last company to attempt mining this) made a colossal blunder by allowing thousands of acres of mineral leases to lapse. (These lands were subsequently re-leased by MPSC.)
Mosaic is one of the world’s largest and most experienced mining companies, and mineral leases are at the heart of everything they do. It’s incomprehensible that they would make such an amateurish mistake.
So the question becomes: Would Mosaic intentionally give up leases on a deposit of “the world’s purest potash ore” and leave it sitting for someone else to “snap up” to become the largest potash producer in the United States? A much more plausible explanation is that Mosaic, with the benefit of its vast experience and access to exploratory well data, decided what was worth keeping and what was not.