1st potash mine in Manitoba gets permission to go ahead near Russell

A long-envisioned potash development in western Manitoba may come to fruition after the government approved the first such project in the province.

The Potash and Agri-Development Corp. of Manitoba (PADCOM) has been granted permission to start extraction and production near Russell, Man., about 310 kilometres northwest of Winnipeg, Manitoba Premier Heather Stefanson announced in a news release Tuesday.

Daymon Guillas, the president of PADCOM, said the mine will create 17 to 25 new jobs in the region starting in October, when the mine is expected to start operating.

Guillas said no provincial government money is being used for the project.

The corporation acquired the rights to the mineral, a key ingredient in fertilizer, in 2014.

Former NDP minister of mineral resources Dave Chomiak said at the time that it could take up to a decade to develop the mine, but it could generate as many as 600 jobs and provide hundreds of millions of dollars in royalties for the province.

Manitoba sits next door to the world's largest producer of potash — Saskatchewan. The province is Manitoba's source of the mineral, and the mine west of Russell is near the provincial border and essentially an extension of the Saskatchewan deposit.

A spokesperson for the province said PADCOM has met the provincial requirements to explore the resource and to produce and that the development was fully funded through private investment. It's estimated the development could generate $5-6 million in revenue to the province, the spokesperson said. 

Guillas said he has worked on the project for years. 

Saskatchewan's bigger deposits and easier access made the Manitoba mine a difficult sell to investors, he said.

"So we just said, okay, well, let's go find another way," he said. 

The company is using a community development model, in which nearby communities share in the profits, he said.

Gambler First Nation has a 20 per cent stake in the project, and the company will present community benefit agreements to several Indigenous communities in the area, the Manitoba Métis Federation and the Municipality of Russell-Binscarth, the news release said.

The corporation estimates the production capacity of the deposit is two million tonnes of potash per year, its website says.

In February, the federal Impact Assessment Agency released a report saying the footprint of the project would cover about one hectare, in the hamlet of Harrowby, about 16 kilometres west of Russell. That report estimates the project will produce 250,000 tonnes of potash per year. 

Two wells have already been drilled near Harrowby, which is near the Yellowhead Highway close to the Saskatchewan border, to explore the potash resource and determine feasibility. 

With the recent Environment Act licence approval and signing of a mineral lease agreement with the province, the project can now move forward.

The price of fertilizers such as potash have risen substantially in the last year, driven by a number of factors, including production disruptions due to bad weather in the United States and China's decision to curtail exports to meet their own demands.

Canada's sanctions on Russia, a major exporter of the mineral, have also increased costs.

CBC Manitoba has reached out to the municipality and Gambler First Nation for comment on the development.