ND Potash Mining Project Stalls

A company that has been exploring the potential for potash mining in North Dakota said the test results weren't as promising as hoped and it will focus instead on a project in England.

BISMARCK, N.D. (AP) — A company that has been exploring the potential for potash mining in North Dakota said the test results weren't as promising as hoped and it will focus instead on a project in England.

Potash is used for soil fertilizer. Potash mining is a major industry in Canada's Saskatchewan province, which borders the region where Dakota Salts LLC has been prospecting in North Dakota.

The company drilled a test well in late 2010 east of Lignite, a community about 90 miles northwest of Minot in Burke County. The drilling permit was the first the state had issued in 34 years, according to the North Dakota Geological Survey.

News of the test well and Dakota Salts' leasing of more than 16,000 acres for possible mining spurred the North Dakota Legislature to approve a new 2 percent tax on potash production last year.

But Don Dickie, a senior geologist for Dakota Salts' parent company, Sirius Minerals PLC of London, said the North Dakota potash deposits are "not on the front burner" of the company's plans.

"We had expectations that we would be able to (find) a thick, high-grade potash deposit similar to what you would see in Saskatchewan," Dickie told The Associated Press. "Our results were not up to that level."

J.T. Starzecki, a senior manager for the company's U.S. operations, said it's looking at information from the test well and other drilling data from Burke County to determine what best to do next.

"Rather than running off and drilling more expensive holes, we wanted to have more method to the madness, and ensure we had the right steps in place," Starzecki said.

Meanwhile, Sirius is concentrating its efforts on what Starzecki called a "massive" potash deposit in Yorkshire, in north England. On its website, Sirius describes that project as the company's "main development asset."

Ted Hawbaker, of Portal, a critic of the Legislature's efforts to tax and regulate potash mining, said the land where test drilling was done hasn't yet been restored to its original condition, even though drilling ceased about a year ago.

The site is "a mess" and the state Industrial Commission, which granted the drilling permit, hasn't done anything about it, Hawbaker told a North Dakota legislative committee studying potash taxation.

"There's plastic, there's junk all over. It hasn't been cleaned up," Hawbaker said. "It sits there just as they left it."

Ed Murphy, North Dakota's state geologist, said Dakota Salts would restore the site this spring. The work will include filling in waste disposal pits and removing a short gravel road that provided access to the site, he said.

Janet Cron, Burke County's tax director, said company officials haven't met with the county commission to discuss the project or what they might do in the future.

"I think communication is a little lacking," Cron said. "They have never been up to Burke County and sat down with our commissioners. I find that, really, not very nice."

Starzecki said Dakota Salts tried unsuccessfully to arrange a meeting with county commissioners. The company also held town meetings to answer residents' questions before the test well was drilled, he said.

"We've always been accessible to anybody that has questions or concerns," he said.

Potash demand — highest in China, where the fertilizer helps grow rice, fruits and vegetables — has been recovering from a slump that coincided with the recession, according to the International Fertilizer Industry Association, a trade group based in Paris. The association forecasts potash demand growing by 20 percent by 2015, with production expanding at an even faster pace.

Saskatchewan accounts for about 30 percent of the world's potash production, according to the Canadian Fertilizer Institute, an Ottawa-based organization that represents manufacturers. Potash is used in the United States to raise corn.