Producing Sulfate of Potash from Polyhalite
with Cost Estimates
PREPARED FOR
Dated March 23, 2010
Prepared by
Donial Felton B.Sc. Chemical Engineering, Chemfelt Engineering
James Waters, MET MBA PE
Richard D Moritz B.Sc. Mining Engineering, MBA Member MMSA
Terre A Lane B.Sc. Mining Engineering, Member AusIMM
Gustavson Associates, LLC
TABLE OF CONTENTS
SUMMARY .................................................................................................................................................................. 1
SULFATE OF POTASH .................................................................................................................................................. 1
PREMIUM PRICING OF SOP ........................................................................................................................................ 2
CURRENT COST OF PRODUCING SOP AND ICP EXPECTED COST TO CONVERT POLYHALITE TO SOP ........................ 2
CURRENT SOP PRODUCTION METHODS ..................................................................................................................... 3
INTRODUCTION ....................................................................................................................................................... 3
PROCESS TECHNOLOGY ............................................................................................................................................. 3
Calcination ........................................................................................................................................................... 3
Leaching ............................................................................................................................................................... 4
Solar Evaporation ................................................................................................................................................. 4
Harvesting............................................................................................................................................................. 4
Upgrading ............................................................................................................................................................. 4
Granulation........................................................................................................................................................... 4
PROCESS DESCRIPTION ........................................................................................................................................ 5
UNITED STATES BUREAU OF MINES EARLY WORK.................................................................................................... 5
BRINE HARVESTERS AND SOLAR EVAPORATION........................................................................................................ 5
THE GREAT SALT LAKE PROCESS .............................................................................................................................. 6
MANNHEIM FURNACE – A RELATIVELY HIGH COST METHOD ................................................................................... 8
ICP SOLAR EVAPORATION PROCESS DESCRIPTION .................................................................................................... 9
PRODUCTION COSTS ............................................................................................................................................ 12
ICP SOLAR EVAPORATION OPERATING COSTS ........................................................................................................ 12
BRINE HARVESTER AND SOLAR EVAPORATION ....................................................................................................... 12
MANNHEIM OPERATING COSTS................................................................................................................................ 13
DEVELOPMENT STRATEGY ............................................................................................................................... 14
CONCLUSIONS ........................................................................................................................................................ 15
REFERENCES .......................................................................................................................................................... 15
APPENDIX 1 – GREAT SALT LAKE BRINE PHASE DIAGRAM ................................................................... 16
APPENDIX 2 – ICP POLYHALITE LEACHATE BRINE PHASE DIAGRAM ............................................... 17
APPENDIX 3 – ICP COSTS ..................................................................................................................................... 18
APPENDIX 4 – AUTHORS QUALIFICATIONS .................................................................................................. 19
i LIST OF FIGURES
FIGURE 1 – GSL FLOWSHEET ......................................................................................................................................... 7 FIGURE 2 – MANHEIM FURNACE .................................................................................................................................... 9 FIGURE 3 – SOLAR EVAPORATION POND PROCESS ....................................................................................................... 11 FIGURE 4 – SENSITIVITY OF GSL PRODUCTION COSTS TO MOP .................................................................................. 13 FIGURE 5 – MANNHEIM SENSITIVITY TO THE COST OF MOP ....................................................................................... 14 LIST OF TABLES
TABLE 1 – BRINE COMPOSITION GRAMS PER LITRE ....................................................................................................... 6 TABLE 2 – GSL OPERATING COSTS AND PRODUCTION STATISTICS.............................................................................. 12 ii SUMMARY
Gustavson Associates LLC, Chemfelt Engineering, and Mr. James Waters MET MBA PE, were
contracted by IC Potash Corp (“ICP”) to complete an independent evaluation of the methods of
producing Sulfate of Potash (SOP) from polyhalite. SOP is a significant growing market
segment within the fertilizer industry. This report also provides a background discussion of the
methods currently employed worldwide to produce SOP and cost of production.
ICP has proposed that the Company develop and mine the mineral polyhalite,
K2Ca2Mg(SO4)4·2(H2O), from an underground source located east of Carlsbad, New Mexico.
The polyhalite will be the feedstock for a new processing facility to be built in the vicinity of the
mine that will produce Sulfate of Potash (SOP) using a process they refer to as the solar
evaporation option, utilizing solar energy to evaporate water from potassium sulfate rich brine,
allowing the SOP to crystallize and precipitate. This processing option employs simple, low
cost, and robust proven technology.
Based on the work of the United States Bureau of Mines and other potash producers, the
conversion of polyhalite to SOP is a relatively straight forward process. The simple brine
produced from the polyhalite will be harvested from solar evaporation ponds. Downstream
processing of salts harvested from solar evaporation ponds will require a much simpler
processing route than the current lake brine harvesting operations.
We, the independent authors of this report, conclude that this simple, low cost, robust production
method can be employed to produce SOP and that premise is the focus of this report.
Sulfate of Potash
SOP has an international market of approximately four million tonnes per annum. ICP’s
business strategy is to become one of the world's lowest cost SOP producers. MOP is a chloride
mineral and many crops find chloride somewhat toxic. Crops, which are particularly sensitive to
chloride, include most fruits, vegetables, tobacco, and potatoes in various soils, and many
horticultural plants. Key benefits of the use of SOP include: improved plant health; more
efficient photosynthesis; improved uptake of nutrients; increased resistance to drought, frost,
disease, and insects; and increased yields, better quality (e.g. taste, color, texture) and longer
durability (e.g. transport, shelf life, processing) of fruits and vegetables. SOP has no chloride
and is therefore the preferred form of potash fertilizer for chloride sensitive crops.
The general condition of soil degradation affects 15% of the Earth’s land area, resulting in 30%
of the World’s cropland becoming unproductive. Salt marshes of temperate zones, heavily
irrigated lands, and wetland rice soils, for instance, are all salty. Salinity induced symptoms
include reduced root growth, decreased flowering, and smaller leaf size. SOP has a low salinity
compared to MOP, and therefore is the preferred fertilizer for many saline soils around the
world. The salinity index of SOP is only 46 compared to the relatively high salt index of MOP at
1 | P a g e 116, based on equal weights of material. Higher salt index value will more likely cause injury to
germinating seeds or seedlings.
During the First World War, Germany controlled the availability of potash and the price rose
dramatically. The US Bureau of Mines and the US Geological Survey discovered that the
marine sediments of the Permian Basin, running north from Texas across New Mexico, were a
regime where potassium salts might be found. This exploration led to the discovery of potash
deposits of sylvite and langbeinite in the now well known Carlsbad district. Prior to the
discovery of potash, polyhalite was discovered east of the potash deposits, which is the location
of the ICP project. The polyhalite deposits were not mined and have lain untouched until
recently when ICP began their work. The USBM carried out research on making SOP from
polyhalite, and the processing method they developed was based upon fundamental laboratory
investigations with capital costs, operating costs and economic analysis generated for each
processing methodology.
ICP’s interest and work has been primarily focused on specific processes for the extraction and
recovery of SOP from calcined polyhalite. Calcination of the polyhalite allows the mineral to be
rapidly dissolved in water and subsequently treated to recover SOP. This process forms the basis
for SOP recovery with evaporation and precipitation in solar ponds. ICP repeated the calcination
bench scale test work completed by the USBM (July 2009), under the test conditions outlined by
the USBM and obtained the equivalent results. The calcination of polyhalite involves heating
minus ten mesh ore to 450°C for three to four minutes to drive off water, breaking the hydration
bonds.
The polyhalite was not exploited because MOP was readily available and cheap.
Premium Pricing of SOP
As a result of the agricultural advantages of SOP, and because over half of the world’s producers
use MOP, SOP sells at a substantial premium compared to the price of MOP. The high
production cost for most of the world’s producers is the result of their need to buy MOP or
otherwise consume potassium chloride, as a source of potassium, to produce SOP. Given the
strong demand for SOP, and the high marginal cost of production, SOP is sold to farmers at a
30% or more premium to the price of MOP.
Current Cost of Producing SOP and ICP Expected Cost to Convert Polyhalite to SOP
ICP intends to develop and produce SOP using the mineral polyhalite as feedstock, providing the
potassium as well as the sulfate needed to produce SOP. Polyhalite can be mined inexpensively.
As a result, ICP should be able to produce SOP at the lowest cost quartile of the global
production cost curve, and will benefit from the favorable pricing of the final product.
2 | P a g e Current SOP Production Methods
The three principal methods of SOP production are; the reaction of potassium chloride (MOP)
with sulphuric acid or an alternative source of sulfate; the processing and extraction of minerals
or brines containing potassium and sulfate; and reacting potassium chloride and Kieserite.
The most common method of SOP production is the Mannheim process making up over 50
percent of the world’s production. This method is very high cost because it requires large
amounts of MOP as an input, is energy intensive, and individual operations can only be built on
a small scale. Currently the cost of production of SOP is $350 to $700 per tonne for the
Mannheim process, with the cost to purchase MOP making up $300 to $600 per tonne of that
cost. This production cost is likely in a short term low, with medium to long range expectation
that the price of MOP will increase, and in fact it has recently been increasing, resulting in higher
SOP production costs.
Another principal method of SOP production is through the evaporation of salt lake brines.
There are three salt lakes in the world which have brines that are being treated to produce SOP.
These are the lowest cost producers of SOP and account for approximately 15% of global SOP
production. The three salt lakes are (1) Great Salt Lake of Utah, (2) Salar de Atacama in
northern Chile, and (3) Lop Nur of northern China. The latter two producers likely have costs of
under $200 per tonne. The salt lake production is constrained because these lakes normally have
relatively low levels of contained sulfate.
The third method of producing SOP and the second largest production source is from the
company K+S Kali. Through ion exchange, MOP is reacted with magnesium sulfate, (kieserite),
to produce SOP and byproduct magnesium chloride.
INTRODUCTION
Process Technology
Though no company currently utilizes polyhalite as feed stock for their plant, many of the
competing companies use all of the individual or “unit processes” in their production method that
are also required to make SOP from polyhalite. The process ICP has selected for the production
of SOP is simple, low cost and robust. Increased demand for SOP has over the last 20 years has
created a viable growing market.
The entire process system that ICP will employ has been tested and proven in pilot scale tests by
former potash companies. The process includes mining, crushing, and pulverizing ore; followed
by calcination, leaching, solar evaporation, harvesting, upgrading, and granulation.
Calcination
Calcination is a common practice of heating rock to drive off different compounds. When
polyhalite is calcined at moderate temperatures, water molecules are driven off. Polyhalite
3 | P a g e calcination occurs at 450°C, freeing the potassium and magnesium sulfate compounds from their
hydration bonds, allowing them to quickly dissolve in water.
Leaching
The hot calcined product is quenched in 95°C process water. The calcined potassium and
magnesium sulfate compounds are quickly dissolved in the hot water, producing a chemically
simple, high potassium, sulfate brine. Waste products like calcium sulfate, calcium carbonate,
and magnesium carbonate from the ore are not soluble and remain as solids in solution and are
removed by centrifuge and filtration.
Solar Evaporation
The hot potassium, magnesium, and sulfate rich solution is cooled with heat exchangers, and sent
to large, shallow ponds for solar evaporation. Evaporation increases the concentration of the
solution to saturation when SOP (K2SO4) and schoenite (K2SO 4·MgSO4·6 H2O) crystallize and
precipitate.
Each of the current lake brine production operations utilizes solar evaporation to produce SOP.
However, each of these lake brine operations has high levels of sodium, chloride, and other
elements within their naturally occurring lake brine, complicating the operation of the ponds and
the processing of the precipitate.
Harvesting
Like other solution pond operations, the precipitate is drained and allowed to dry before self
loading rubber tire scrapers collect the SOP plus Schoenite precipitate. The scrapers deliver the
product to the plant site where it is stacked in a stockpile, allowing further draining.
Upgrading
The mixed SOP plus schoenite precipitate is fed from the stockpile to a draft tube baffle
crystallizer (DTB) where water is added in the proper amount to re-dissolve the schoenite only,
leaving SOP as a solid. The potassium sulfate portion from the dissolved schoenite is then
precipitated as pure SOP product, leaving the magnesium sulfate in solution. The two SOP solids
are filtered, dried and delivered to the granulation circuit. The draft tube baffle reactor vessel
technology is used by the Carlsbad, K+S Kali, and lake brine producers to upgrade their
products.
Granulation
Granulation is used to produce the final product, which has both rapid and slow release fertilizer
characteristics. Some of the Carlsbad, lake brine, and K+S Kali operations use granulation
technology, others use older methods.
4 | P a g e PROCESS DESCRIPTION
United States Bureau of Mines Early Work
Prior to the First World War, Germany had a monopoly on potassium production. With the onset
of the war, the United States lost its source of potassium, creating a potassium shortage, and very
high prices. The United States government initiated a potassium exploration program through the
US Geologic Survey and the United States Bureau of Mines (USBM). Geologists recognized the
marine sediments of the Permian Basin, running north from Texas across New Mexico, as a
regime where potassium salts might be found. This exploration led to the discovery of potash
deposits of sylvite and langbeinite in the now well known Carlsbad district. Prior to the
discovery of potash, polyhalite was discovered east of the potash deposits, which is the location
of the ICP project.
As part of the government potassium salt program, processing methods were developed to treat
the polyhalite to produce SOP and other potassium products. ICP is using technology from this
early work completed by the USBM to use polyhalite resources for the production of a high
value SOP fertilizer. The USBM Bulletin 459 – 1944, identified a method for the treatment of
the polyhalite resource. Development of the processing method was based upon fundamental
laboratory investigations with capital costs, operating costs and economic analysis generated for
each processing methodology. ICP’s interest and work has been primarily focused on specific
processes for the extraction and recovery of SOP from calcined polyhalite. Calcination of the
polyhalite allows the mineral to be rapidly dissolved in water and subsequently treated to recover
SOP. This process forms the basis for SOP recovery with evaporation and precipitation in solar
ponds. ICP repeated the calcination bench scale test work completed by the USBM (July 2009),
under the test conditions outlined by the USBM and obtained the equivalent results. The
calcination of polyhalite involves heating minus ten mesh ore to 450°C for three to four minutes
to drive off water, breaking the hydration bonds.
Brine Harvesters and Solar Evaporation
Recovery of SOP from naturally occurring lake brines contributes approximately 15% of world
production. These brines are generally high in sodium chloride and contain other elements.
Both of these conditions require more complex processing techniques and additional logistics in
material handling than the ICP process. The ICP brines generated from polyhalite will be
essentially devoid of sodium chloride, which in addition to simplifying the process may result in
a higher quality (i.e. ultra-low or no chloride) product. The following table contrasts the Great
Salt Lake brine, (GSL) and the expected ICP brine product.
5 | P a g e TABLE 1 – BRINE COMPOSITION GRAMS PER LITRE Site GSL ICP ‐ expected Atacama ‐ SQM Sodium Potassium Magnesium Chloride Sulfate Lithium 85.7 0.5 97 4.6 21 23 8 8 13 147 0.7 202 17.4 58 23 0 0 1.9 The Great Salt Lake Process
This process is described for illustrative purposes, and is the current process in place to produce
SOP from brines at the Great Salt Lake (GSL).
The GSL process begins with pumping of the naturally occurring lake brine from the Great Salt
Lake into the first set of solar ponds where evaporation proceeds along the line shown as EVAP
I@GSL (see phase diagram appendix 1). The evaporation of water raises the concentration of
each of the ions in solution until the brine becomes saturated and different compounds begin to
crystallize and precipitate. At GSL, halite reaches saturation first so halite is precipitated in the
first evaporation ponds. Liquors discharged from the first solar ponds are transferred to the
potash precipitation ponds where solar evaporation continues as line EVAP II@GSL on the
phase diagram and potassium begins to reach saturation after about 75% of the water is removed.
Potassium, sodium and schoenite precipitate. After some schoenite precipitation occurs, the
liquor continues to evaporate along the EVAP II@GSL line to the point that schoenite, sylvite,
and additional halite precipitate. Evaporation continues as shown by line EVAP III@GSL to the
point that kainite, sylvite and halite become saturated and precipitate. Thus, the Compass
Minerals evaporation scheme for the Great Salt Lake brine is quite complex. For simplicity and
clarity, the halite and sylvite saturation lines have been omitted from the phase diagram in
Appendix 1.
Solids harvested from the potash ponds are treated with anionic flotation to remove remaining
halite. To convert kainite into schoenite, it is necessary to mix the upgraded flotation product
with a prepared brine. The conversion of schoenite to SOP at GSL requires that additional MOP
be added, over the amount produced from the lake brines. This additional MOP is purchased
from the open market. The GSL schoenite solids are mixed with potash in a draft tube baffle
reactor (DTB) to produce SOP and byproduct magnesium chloride. Final SOP product is dried,
screened, sized, and compacted. The following flow sheet graphically demonstrates the GSL
process (Figure 1).
6 | P a g e FIGURE 1 – GSL FLOWSHEET 7 | P a g e Mannheim Furnace – A Relatively High Cost Method
The Mannheim process is used to produce over 50% of the world’s SOP. Sulfuric acid is reacted
with potassium chloride within the Mannheim furnace. The furnace is a large multiple graterabble arm cast iron kiln where the potassium chloride and sulfuric acid are first fed onto a
stationary reaction plate where an initial reaction takes place. The stationary plate is up to 6 m in
diameter. Rotating rabble arms constantly turn over the mixture and move the intermediate
product to a lower plate. The kiln portion of the furnace is constructed with bricks that have high
resistance to direct flame, temperature, and acid. The other parts of the furnace are heat and acid
resistant. Hot flue gas passes up over the plates carrying out liberated chloride gas. The
intermediate product reacts with more potassium chloride in the lower, hotter section of the kiln
producing SOP. The SOP exits the furnace and passes through cooling drums before being
milled, screened and sent to product storage facilities.
The process involves two chemical reactions. In the first step potassium chloride and sulfuric
acid are combined to produce potassium bisulfate and hydrochloric acid, an exothermic reaction
that can occur at room temperature. The second step of the process involves an endothermic
reaction, requiring energy input. A temperature of 600° to 700°C is required and maintained
within the furnace to convert additional potassium chloride and the intermediate product to
produce SOP and more chlorine gas. Based on public information about Mannheim Furnace
SOP production, about 80% of the production cost results from purchasing MOP and 10% of the
cost is for fuel (energy) and sulfuric acid.
The chloride gas from the furnace is condensed by cooling, and then absorbed into water to
convert most of the gas to a 30% hydrochloric acid solution. The remaining chlorine gas is then
absorbed in secondary towers creating a dilute hydrochloric acid which is subsequently distilled
to produce an 18% solution.
Mannheim kilns are usually limited in capacity to 9,000 to 15,000 tonnes per year. The products
obtained are said to be of high purity due to the efficiency of mixing, however some reports of
incomplete reaction have indicated that, at times, products containing some hydrochloric acid or
MOP are produced.
8 | P a g e FIGURE 2 – MANHEIM FURNACE ICP Solar Evaporation Process Description
ICP proposes to mine polyhalite underground and utilize known processing methods and unit
operations to produce SOP. The polyhalite beds controlled by ICP will be mined by conventional
room and pillar mining with continuous mining equipment, very similar to the current practice of
the potash mines in the area. Mined material will be transported to the surface where it will be
crushed and ground to approximately 10 mesh.
The ore will be calcined at 450°C to remove the water of crystallization and render the material
soluble in a hot water leach, as first demonstrated by the USBM. Once the calcined polyhalite is
dissolved in the hot water leach, calcium sulfate solids and other minor waste compounds will be
removed by centrifuging and a Larox pressure filter. This will leave a simple clean brine
composed of potassium and magnesium sulfate. This simple brine will make the downstream
processing steps less complicated than that of the lake brine producers.
The polyhalite conversion process, brine solar evaporation sequence, is best described by the
K2SO4—MgSO4—H2O system phase diagram from D’ANS as shown in Appendix 2. The K2SO4
/MgSO4 point is plotted as the starting point on the D’ANS phase diagram. Evaporation is
depicted as line EVAP I@ICP until the start of K2SO4 crystallization. K2SO4 crystallization
proceeds horizontally until the K2SO4 saturation line is intersected. Then evaporation continues
and proceeds as shown on line EVAP II@ICP until schoenite crystallization is triggered at the
apex of the line intersection. Schoenite crystallization starts and proceeds down with a slope
determined by the ratio of the products to reactants. This schoenite crystallization continues until
9 | P a g e the schoenite saturation line is reached. Only two solid crystalline forms are precipitated from this
brine, K2SO4 and schoenite. The ICP brine is much simpler than the four solid crystalline forms
precipitated from the Great Salt Lake brine - NaCl, KCl, schoenite, and kainite, (Appendix 1).
The SOP and schoenite will be harvested from the solar ponds using rubber tire self loader
scrapers for subsequent processing steps. Crystals from the solar ponds will be mixed with fresh
water within a DTB (draft tube baffle) reactor to dissolve the schoenite and selectively
precipitate additional SOP while leaving the magnesium sulfate in solution. The SOP product
from the DTB reactor will be filtered on a belt filter to remove remaining liquid magnesium
sulfate solution from the SOP. The overflow liquid from the DTB reactor and the belt filter
filtrate will be recycled to the front end of the solar evaporation ponds to return sulfate to the
system, or discarded in the tailings facility.
METSIM, a metallurgical process simulation program, was used for the initial design of ICP’s
solar evaporation process. Detailed flow sheet, heat and mass balance calculations are available
by request from ICP.
METSIM has become an internationally recognized software tool used for material and heat
balance calculations and is in use by more than 500 mineral processing companies around the
world. METSIM is being used for potash process design by the largest potash producer in the
world. All major mineral processing engineering groups use and rely upon METSIM for design
of new mineral processes, new plant design, as well as optimization of existing facilities.
The ICP solar evaporation process, from solar ponds to the production of SOP, is similar to lake
brine operations like the GSL operation. The simple clean low chloride ICP brine however will
not have halite, sylvite or kainite precipitating in the evaporation sequence and will not require
the ionic flotation process step to remove the halite. Neither is the kainite conversion step to
schoenite at GSL required. The ICP SOP process potentially could produce a higher quality
product. The final SOP solids will be sent to a granulation circuit where they will be dried,
screened and sized. See Figure 3 for the ICP flow sheet.
10 | P a g e FIGURE 3 – SOLAR EVAPORATION POND PROCESS 11 | P a g e PRODUCTION COSTS
The cost of production for each of the SOP production technologies was estimated from
published data and available company financial reports.
ICP Solar Evaporation Operating Costs
As part of the ongoing evaluation of the Ochoa project, we have updated the operating cost
estimate for the solar evaporation processing option from the previously generated NI 43-101
Technical Report. We expect the total production cost to be $162 per ton SOP or $ 180 per
metric tonne, (not including royalties of $38.50 per ton). The ICP production cost will be very
competitive in the US and world markets for several reasons. First, is the high potassium grade
of the polyhalite. Second, is the production of the simple clean brine that is produced by
calcining the polyhalite, and dissolving the potassium sulfate in water. And finally, the use of
known proven unit operations and process methods that create a robust low cost operation.
Figure 3 shows the flow diagram for the ICP solar evaporation process.
Brine Harvester and Solar Evaporation
Of the three principal lake brine operations, production costs for two of these producers were
available within the public domain. The GSL operation had the most complete data so we will
present that data here. In order to produce SOP from lake brines, the sulfate level must be high
enough to provide sulfate to the potassium molecules. Table 2 below shows the operating cost
for GSL for the last four years. The production costs for the GSL operation are higher than we
estimate for ICP due to the dilute nature of their brine, input costs for MOP, and complex
processing circuit.
TABLE 2 – GSL OPERATING COSTS AND PRODUCTION STATISTICS Compass Minerals (GSL) ‐ source 2008 annual report, and year end 2009 press release
millions
Sales
operating earnings
cost of sales
tons SOP
cost per ton (st)
cost per tonne
2009
126.8
76.0
50.8
2008
232.9
117.7
115.2
2007
136.1
35.6
100.5
2006
110.3
30.5
79.8
153,000
391,000
423,000
377,000
$332
$366
$295
$325
$238
$262
$212
$233
Note: requires the purchase of potassium chloride, potassium deficient brine
12 | P a g e Our analysis of the GSL data revealed that the GSL operation has an annual fixed production
cost of about $20 million, with a variable cost of approximately $200 per ton of SOP. Using
published flow sheets, a basic cost model was constructed that included labor, equipment
operating costs and inputs, (i.e. reagents and power). From this analysis it is evident that the
largest production cost component at GSL is the cost to purchase MOP. Using a base case of
300,000 tonnes production of SOP per year, production cost sensitivity to the price of MOP was
calculated and is represented by the graph in Figure 4.
FIGURE 4 – SENSITIVITY OF GSL PRODUCTION COSTS TO MOP Mannheim Operating Costs
As previously stated, the Mannheim furnace operations produce the majority of the SOP on the
world market. We believe Migao Corporation of Canada produces SOP in China are likely the
lowest Mannheim costs in the world. The graph below, Figure 5, shows the high cost structure
associated with the Mannheim process, making these operations the highest cost SOP producers
in the world.
Migao Corporation as well as other SOP producers using the Mannheim process have production
costs that are directly tied to the price of MOP. At a current price of $400 per tonne MOP, we
estimate the cost to produce SOP at $401 per tonne; including credit for byproduct hydrochloric
acid production.
13 | P a g e FIGURE 5 – MANNHEIM SENSITIVITY TO THE COST OF MOP DEVELOPMENT STRATEGY
ICP plans to rapidly develop the Ochoa project, incorporating the solar evaporation process, to
quickly demonstrate project viability, leading to a bankable Feasibility Study and production
decision. ICP will begin a pre-feasibility study this spring to better define resources and
reserves, mine design, process methodology, capital and operating costs, permitting
requirements, and economic potential.
Additional exploration drilling is planned to expand the resource and define a mineable reserve.
As part of the drilling program, additional polyhalite core samples will be obtained for further
metallurgical test work and geotechnical testing in support of the underground mine design.
Metallurgical work will be to aid in process circuit detailed design for the solar evaporation
process. Included will be hot leach optimization, potential impact, and resolution, of any
reasonably possible “upset” conditions for a wide range of potential polyhalite feed stock
contaminates. Simple potassium magnesium sulfate brine will be evaporated to produce K2SO4
and schoenite crystals using simulated pan evaporation. This information will direct the sizing of
the solar evaporation ponds. Evaporation crystals will also be for sizing of the DTB reactors for
production of the final K2SO4 product. There will also be multiple tests for the sizing of simple
equipment such as thickeners and filters. The selected processing route is simple and well
defined. Additional metallurgical tests will be for detailed design of the processing circuit and
not for determination of the process viability.
14 | P a g e Additional land is being secured with appropriate state and federal leases. Various sources of
water are being evaluated for use in processing. Collection of baseline environmental data will
commence in support of the overall Ochoa project development program.
CONCLUSIONS
Upon evaluation of the three principal methods of producing SOP from polyhalite as described in
this report, we have concluded that employing a solar evaporation process to convert polyhalite
to SOP is a viable and robust method of production. This report demonstrates the following:





Polyhalite contains all the ingredient chemicals to make SOP;
Polyhalite can be mined underground;
Polyhalite can be used to make a potassium and sulfate rich brine that can be evaporated
in solar evaporation ponds;
The solar pond salt precipitate can be harvested and treated with simple, proven
technology to produce SOP; and
The conversion of polyhalite, through the solar evaporation method will have SOP
production costs in the lowest quartile of global SOP production cost.
Based on our analysis, we conclude that the solar evaporation method is a proven process and
provides a robust production method that can be employed by ICP to produce SOP at a low cost.
REFERENCES
1. NI 43-101 Technical Report on the Polyhalite Resources and a Preliminary Economic
Assessment of the Ochoa Project Lea County, Southeast New Mexico, prepared for
Intercontinental Potash Corporation, August 19, 2009
2. Potash Deposits, Processing, Properties and Uses; Don Garret PhD; Chapman & Hall 1996
3. Annual reports and press releases for Compass Minerals and Migao Corporation
4. Budgetary water treatment pricing from HW Process Technologies, Lakewood Colorado
5. Budgetary solar pond costs from Vector Engineering, Denver Colorado
6. D’Ans, 1., 1933 Die losungsgleichgewichte der systeme der salze ozeanischer
salzablagerungen; Kali-Forschungsanstalt, Berlin, Ver1. Ges F. Ackerbau
15 | P a g e MgSO4 Concentration (g/l)
-20
0
20
40
60
80
100
120
140
0
50
GSLBrine
SCHOENITE
100
200
MgCl2 Concentration (g/l)
150
250
300
GREAT SALT LAKE BRINE TO K2SO4 PRODUCTION PHASE DIAGRAM
←KAINITE XYLZER
160
350
APPENDIX 1 – GREAT SALT LAKE BRINE PHASE DIAGRAM
16 | P a g e APPENDIX 2 – ICP POLYHALITE LEACHATE BRINE PHASE DIAGRAM
17 | P a g e APPENDIX 3 – ICP COSTS
Estimated ICP SOP Production Costs ‐ Solar Evaporation
# units
Processing Costs
Raw Materials
Water
Natural Gas (80%)
Electricity (80%)
Laboratory
Operating Supplies
Equipment Maintenance
Labor Subtotal Process Cost
Cost / raw units/ton unit raw material units
K2SO4 material
Cost / ton K2SO4 6000 gallons
6.66 1000 CF
128 kwh
allowance
allowance
allowance
Mining Costs
Mine Equipment and Materials
Labor Subtotal Mining Costs
Administration
Total Production Cost ‐ Solar Pond Evaporation
Cost per / ton K2SO4 based upon 600,000 tons SOP per year
Annual Cost (000's) $3.00 000's gal
$3.50 1000 CF
$18.00
$23.31
$10,800
$13,986
$0.06 kwh
$7.68
$1.00
$6.00
$15.00
$19.75
$90.74
$4,608
$600
$3,600
$9,000
$11,848
$54,442
$31.42
$34.97
$66.39
$18,852
$20,981
$39,833
$4.94
$2,964
$162.06
$97,239
18 | P a g e APPENDIX 4 – AUTHORS QUALIFICATIONS
Each of the authors, whose backgrounds are described below, is independent of ICP and are
recognized experts in their chosen fields.
Donial M. Felton, Consulting Process Engineer. Mr. Felton is a Chemical Engineer with
forty-three years of experience; thirty-six of those years were in the potash industry in Carlsbad,
New Mexico. Mr. Felton has extensive experience in process design, operation, optimization,
and problem resolution in the production of K2SO4, KCl, and langbeinite. Skills include
METSIM modeling of complex potash processing plants. Mr. Felton has designed potash circuits
for some of the largest potash producers in North America.
James Waters, Metallurgical Engineer, MBA. Thirty years experience managing complex
minerals processing, chemical manufacturing and mining facilities. The majority of this time was
in the potash industry in Carlsbad, New Mexico involved with the operation of flotation, hot
leach chemical plant and granulation circuits. Mr. Waters has managed the engineering and
construction of multiple major processing plant expansions. He is a registered professional
engineer in the state of New Mexico.
Terre A. Lane, Principal Mining Engineer. Over twenty five years management experience
with twenty years experience in surface and underground mining including; operations,
engineering, resource estimation, mine design, scheduling, budgeting, cost control, project
analysis, and financial analysis. Ms. Lane has extensive experience in geology, mineral
processing, metallurgy, hydrology, rock mechanics and ventilation, as well as, computers,
networks, database construction and management, programming, project design, engineering and
construction. She is a member of the AusIMM and is a “Qualified Person” as defined by Canadian
National Instrument 43-101.
Richard D. Moritz, Associate Principle Mine Engineer, MBA. Mr. Moritz is a Mining
Engineer with 28 years of experience and a strong minerals processing background. Work history
includes due diligence, technical audits, conceptual, pre-feasibility and feasibility studies. Mining
experience includes open pit mining as well as most underground methods. Most notable
processing experience was commissioning and managing the gold recovery plant at Muruntau,
Uzbekistan and directing the commissioning of the Beaconsfield bacterial oxidation gold plant in
Tasmania, Australia. He is a member of the MMSA and is a “Qualified Person” as defined by
Canadian National Instrument 43-101.
19 | P a g e