Feds approve massive potash mine on dry Utah lakebed; it could bring hundreds of jobs, millions in sales

Courtesy photo by Peak Minerals The BLM has approved a 125,000-acre complex of evaporation ponds on Utah's dry Sevier lakebed, where Peak Minerals plans to produce up to 370,000 tons of potash a year.

The bed of Utah’s dewatered Sevier Lake soon will become a sprawling network of trenches and evaporative ponds producing a valuable form of potash under a decision signed Tuesday by the Bureau of Land Management

After 11 years of environmental analysis, the Sevier Playa Potash Project still needs to secure some state permits and water rights, but Crystal Peak Minerals is poised to begin construction as soon as next year on its 125,000-acre lease, according to Kevin Oliver, the BLM’s West Desert district manager.

Over the 30-year life of the project, potash production could be as high as 372,000 tons a year, worth $232 million at the current price of $625 a ton, according to Crystal Peak CEO John Mansanti. The firm also expects to extract salt and magnesium chloride and support quality employment in a rural part of Utah.

“The possibility of 175 good-paying jobs is just a thrilling prospect,” said Millard County Commission Chairman Dean Draper, who believes these gains will help offset anticipated job losses when the nearby Intermountain Power Plant switches from burning coal to natural gas in 2025.

Still, Draper is concerned about housing when Crystal Peak hires 275 workers to build the project.

The bulk of the lease covers federal land, but about 5% is on Utah state trust lands and an additional 4,000 federal acres are needed for utility rights of way.

Mansanti called the project a “paradox” because it is in Utah’s West Desert, known in some quarters as “the middle of nowhere,” yet major utility and rail lines run near it.

“Because of the corridors that go to California and elsewhere, we’ve got good rail access, good power access, good vehicle access,” he said. “So it’s actually a good place for locating a project.”

(Christopher Cherrington | The Salt Lake Tribune)

A remnant of prehistoric Lake Bonneville, Sevier Lake sits between Delta and Milford, running 26 miles north to south at a width of about 8 miles. This terminal body has been largely dry for decades due to upstream diversions of the Sevier River for agriculture.

“It’s basically a salt playa; it’s a big beach,” Mansanti said. “There’s no brine shrimp. There’s no kind of water insects or anything like that. No fish. Because there’s no wildlife you really didn’t have a whole lot of other activities out there.”

Over thousands of years, potassium compounds and other minerals have accumulated onto the lakebed. Crystal Peak now hopes to harvest these valuable minerals using the evaporative power of the sun.

The firm plans to drill up to 2,264 wells and cut up to 306 miles of trenches into the lakebed to collect brines that will be moved through a system of ponds, covering up to 18,000 acres, according to the project’s environmental impact statement. As the water evaporates, the brines will get more concentrated as they pass through ponds from north to south.

The fluids will be so concentrated at the southern ponds that the minerals will precipitate out and moved into a processing plant sited at the playa’s south end near the ghost town of Black Rock off State Road 257, according to Mansanti. A 3.5-mile rail spur will connect the plant with the existing Union Pacific line to the east.

"Our key thing now is obtaining the financing to start construction," Mansanti said.

Rep. Chris Stewart, R-Utah, showered the project with praise, calling it “great news” for his state by creating many “family-supporting jobs.”

“It’s also exciting to see more potash being produced domestically, especially in Millard County,” Stewart said. "I am pleased to have Crystal Peak Minerals operating in my district.”

The Canada-based firm obtained mineral rights to the Sevier playa by paying a $19 million bonus to the federal government. It will pay a 5% royalty on all production, the BLM’s Oliver said. At today’s prices and at the company’s production goals, that royalty could generate up to $11.5 million a year, half of which would go to the state.

“There’s a lot of excitement about the project. We believe that we’ve done a good job to look out after the environmental feasibility of this project and the economic viability as well ,” said Mike Gates, the BLM’s Fillmore Field Office manager. “I think we’ve struck a good balance.”

The project has the potential to double U.S. production of the more valuable form of potash — sulfate of potash — a chemical union of two key plant nutrients, potassium and sulfur. Utah’s evaporative potash mines are the nation’s only source of potassium sulfate, used on high-value crops such as nuts, fruits and potatoes.

These plants don’t tolerate chlorine, a key element in the other type of potash, so they are usually fertilized with sulfate of potash.

“They get a better yield, they have better color, and it tastes better,” Mansanti said. “It sells at a premium ... anywhere from $100 to $250 a ton.”

According to the Utah Geological Survey, Utah produced 491,000 tons of potash in 2018, worth $241 million, and it remains the only domestic producer of sulfate of potash. U.S. growers now import about 90 percent of this more valuable potash.

“This project could double our national production for sulfate of potash, thereby strengthening our local and national economies, and reducing our dependence on foreign minerals," said Joe Balash, the Interior Department’s assistant secretary for land and minerals management.