When it comes to the colour of money, at least in East Central Saskatchewan, it's very much pink.
Well at least it's pink that turns into the green of cash thanks to a vibrant potash mining sector, a sector that is in the midst of some dramatic growth.
That is good news regionally, but also provincially, since potash is the leading mineral in terms of sales in the province where the overall value of the mining sector was near $10 billion as recently as 2008.
Potash mining has been part of the local economy for decades, with mines near Esterhazy, now owned by Mosaic, and one near Rocanville, operated by the PotashCorp, were begun in the late 1960s. Both locations remain highly productive for their respective companies.
In fact reserves for both the PotashCorp and Mosaic are such that both have undertaken major mine expansions.
Bill Johnson, Senior Director of Public Affairs with PotashCorp said work at the company's Rocanville property is part of a larger, company-wide expansion in potash production.
"We are in the midst of a $7.5 billion expansion program on our mines," he told PrairieLife.
Of that $5.5 billion is being invested in Saskatchewan mines, with the remaining $2 billion in New Brunswick.
"We started the expansion in Saskatchewan in 2003," said Johnson, adding "we should be through the bulk of the work by 2013."
Mosaic Potash at Esterhazy is also undertaking an expansion of its mine.
"We're in the process of an expansion," said Norm Beug, Senior advisor to the Potash business unit. The expansion will take the current mine from five million tonnes annual capacity to seven million tonnes. "That's going to occur between now and 2015."
The largest element of the work is a new mine shaft being termed K3, which will bring ore to the surface to be processed in Mosaic's existing infrastructure.
"We're doing the foundation work now," said Beug, adding the site will be frozen over the winter, with drilling of the approximate 3,500-foot shaft beginning in the new year.
When complete the two million tonne expansion will cost Mosaic "a couple of billion dollars," said Beug.
The work at the Mosaic mine will grow staff requirements. Currently the mine employs about 850 staff, and Beug said, "we'll be adding a few hundred jobs."
One company that is moving toward new potash mine development in Saskatchewan in BHP Billiton, with work progressing on a mine site near Jansen and extensive exploration efforts in the Yorkton-Melville area, a possible site of a second mine for the company in the future.
BHP Billiton is a newcomer to the potash field, but brings a wealth on mining experience as the world's third largest mining company, said Christopher Ryder, vice-president, external affairs with the company.
Ryder said the bulk mining technique is "something we're very good at," based on experience in other commodities, adding they are also familiar with moving such a product as "the second biggest bulk shipper in the world."
The move into potash is a good one for BHP Billiton because it is a sector which promises the company growth, something not easily achieved in a large firm well-established in its other commodity developments, offered Ryder.
Since BHP Billiton wants potash to grow its base, it is not looking at a single mine development.
"We're looking at Saskatchewan as a potash basin," said Ryder, adding as such it is likely over the longer term the company will initiate a number of mine developments as world potash demand warrants. It is a philosophy the company already employs regarding copper mining in Chile and iron ore in Western Australia.
Once Jansen is on well under way, Ryder said a second mine will be developed, adding that could be on what it calls their Melville property.
"We're very excited by the Melville Project," he said. " The resource in that part of the province is very good."
Ryder noted the initial 2D and 3D exploration work has been promising. "Now we're doing more 3D and some drilling."
In terms of development, Ryder said the Melville property will mirror what is going on in Jansen, if it proceeds, adding the work in east central Saskatchewan is about three-years behind the work in Jansen.
By doing one project on the heels of another makes sense as a way to keep expertise within the company. Ryder said a project team is usually hired, and once a mine is completed moves on, with another hired at some point when another mine is initiated. By doing developments back-to-back the expertise is retained, and there is a consistency in developments.
The current expansion of existing mines and exploration for new locations is an indication of renewed confidence in potash being a mineral which will see continued demand into the future.
Johnson said that is a major change from only a decade, or so ago, when the industry was basically stagnant in terms of growth, and exploration efforts.
"It was an industry that for years was almost in a state of over capacity," he said.
Ryder also suggested for a time potash production was at a level which stalled expansion. He said BHP Billiton "was holding back a little" on its entry into the sector because world production levels did not make it viable for a new entrant into the sector. "There was over capacity in Saskatchewan. There was over capacity in Russia."
However, the sector has been coming into balance in terms of production capacity and demand through the 1990s, and with expected demand growth the time for new mine development has arrived.
"Demand has been growing steadily over that time," said Ryder.
While supply/demand numbers are better for development, development of a new mine, like those BHP Billiton has planned are a long term project, both the development phase and the life span of the mine.
In terms of development Ryder said the Jansen project began in 2008, and it will be 2015 before it has significant production, expected at 2-million tonnes, and expanding to 8-million as the mine comes into full production.
In terms of production, "we think Jansen is a 70-year mine probably even longer," he said.
The long life of a mine is important given the cost of construction. While Ryder said their company does not talk construction costs until after the final plans are in place, the investment will be significant, in the billions of dollars.
The expansion of PotashCorp's property at Rocanville is significant, even within the context of the company's overall $7.5 billion investment, said Johnson.
"The Rocanville expansion is our largest expansion at $2.8 billion," he said. " It really is our Cadillac mine, no doubt about it."
Johnson said the potash reserve at Rocanville is both large and high quality, warranting the current work.
Construction was completed between 2005 and 2009 on the company's initial round of projects at Rocanville, Allan, Lanigan and Patience Lake operations at a cost of CDN $0.9 billion (CDN $0.13 billion at Rocanville). "Nearly all of this incremental capacity provided compaction capability, enabling us to produce additional granular product. Current mine and mill expansion at Rocanville will increase operational capability and is expected to be completed by 2013," detailed information provided by PotashCorp.
In terms of Rocanville specifically, the overall expansion project at the site is expected to add 2.9 million tonnes of operational capability, increasing the facility's annual operational capability to 5.7 million tonnes.
The three-part expansion includes the installation of a new mill and a 500,000 tonne product storage building at the current Rocanville site - along with the development of the Scissors Creek facility 15 kilometres from the current mill site.
Sinking a new service shaft is a major development, said Johnson.
"We're building a very, very significant new operation there," he said.
When completed in 2013, the new, six-metre diameter shaft will descend 1123 metres, and serve to deliver personnel and supplies to the production zone.
Mines are also important local economic stimulators. Ryder said the Jansen project, and Melville if it proceeds, will have construction crews of about 1,900, and mine staffs of 1,000 when in full production. That will mean significant local development to accommodate the workers.
"People will be coming to the province to work," he said, noting with the current low unemployment rate in Saskatchewan, attracting out-of-province people will be a must, although BHP Billiton is actively working with educational institutions and First Nations groups to try and build the local workforce.
In terms of local community impact, Ryder said Melville, Yorkton, and smaller communities in the area will see an influx of people if the area mine proceeds.
"We're working with local communities to understand what the demands are going to be," he said.
Beug agreed mine expansions and work are local economic stimulators.
"I think the short answer is yes," he said. While not having specific numbers for local expenditures on an expansion like the one Mosaic is undertaking, he said you only need "to drive out to communities, the small towns have no vacancies."
Beug said homes not occupied in years have all been refurbished, sold or rented, and businesses are bustling.
"You can see the direct spin-offs," he said.
Spurring everything is population.
The demographics, literally, have changed in favour of the potash sector.
Johnson said by 2050 it is estimated there will be 9-billion people on the planet. Currently there are just more than 7-billion.
"Those 9-billion people, I'm pretty sure are all going to want to eat," he said.
Beug also pointed to population growth.
"Seventy-five million people a year continue to be added to the world," he said.
Those people need fed. In fact, Beug noted that the trend line for the last 40 years has been year-over-year growth in world food consumption.
In addition Beug said the "burgeoning middle class in India and China," are looking for more, and better quality protein.
There is not the possibility of new land coming into food production to meet that demand increase, so better agronomic practices, including fertilizer use will be essential.
It is a case where the fundamentals of an increased global population requiring more food, combined with a growing middle class which wants better quality food, (more meats that require more grains), and a declining arable land base means the land that is arable needs to be more productive.
The appropriate application of fertilizer, particularly potash, can help achieve the higher crop yields which will be needed.
Beug said in terms of nutrients, potash has traditionally been under-utilized, so potash use is actually growing at a faster rate than other nutrients -- 3.5-to-four per cent, compared to about two per cent for other crop fertilizers.
At present world demand for potash sits at around 55-60 million tonnes, said Johnson, adding the expectation is for potash demand to grow by three per cent a year moving forward, a forecast which is spurring existing mine expansions and talk of new mine developments. He pointed out to meet the growth demand will require capacity growth, adding creating such growth requires "very long lead times," pointing to PotashCorp's own program now into its ninth year.
And there is the cost. A greenfield mine, a brand new development, is estimated at $6-$7 billion, said Johnson.
However, offsetting the cost, at least somewhat is that potash mines are long term investments.
"They will be operating for many, many years," said Johnson, pointing to the fact the current mines in Saskatchewan are all still operational 40-years, or more, after opening.
While currently concentrating on existing mine expansion, Johnson said the day is likely to come when PotashCorp will start a new location. At that point it could again be positive news for east central Saskatchewan since the company has land in the Rural Municipality of Bredenbury, he said, a location where recent exploration work has taken place.
Beug said as it stands Mosaic believes current potash demand growth can be handled through existing mine expansion, with new greenfield growth likely not required until the next decade.
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