On Aug. 20 BHP Billiton, the world's largest mining company, announced it is investing $2.6 billion US into the Jansen potash project. This brings the company's total investment in the project to $3.8 billion and signals that the opening of the mine is inching ever closer; two mining shafts are expected to be completed by 2016.
BHP Billiton is betting on increased food demand from the developing world driving up the demand for potash, which is most often used in fertilizers. As people in places like China and India require more food, they will require more fertilizer, and hence more potash.
The significance of this announcement for Humboldt and the surrounding area cannot be overstated. BHP Billiton calls the Jansen site the world's richest untapped reserve of potash and expects it to produce 10 million tonnes of the mineral for at least 50 years. It will be more than twice the size of the next largest potash mine in the world.
The announcement should come as a relief for many in this area, as there was some speculation that BHP Billiton would back away from the project as global potash prices fall. Major producers, like Mosaic, have seen their stock price fall by nearly 25 per cent over the past few months.
"We think very long-term. This is something that has happened short-term," BHP's CEO Andrew Mackenzie told reporters two weeks ago, speaking to the global volatility in potash. He certainly wasn't kidding.
Specifics are hard to come by at this point, but there's little doubt that this is the most significant development the area has seen in a long time. The mine could attract thousands of new residents to the region, many of whom would settle right here in Humboldt. According to a 2012 report by BHP Billiton, the population of Humboldt could double by 2023 as a result of the mine's opening.
While an expanding population (and tax base) is generally a good thing, the city would have to adapt to the myriad challenges that come with a rapidly expanding population - adequate housing, infrastructure and school system, among others.
There will also be untold and unknowable changes coming for the dozens of small communities that will surround the mine, most notably Jansen and LeRoy. Communities that have been home to only a couple hundred people for the last century will now have to deal with a gargantuan mining operation on their doorstep. How they deal with these changes and whether they will spark any conflicts remains to be seen, but should be fascinating.
If residents of the area want to imagine what life could be like in a boomtown, they don't have far to look - just across the border, in fact. Alberta's oil sands revolution has unquestionably been a boon to the province's bottom line, but hasn't come without its fair share of controversy. Potash, of course, isn't oil, but the arrival of large industry into a previously quiet region is always sure to ruffle some feathers.
The Journal will be following this story closely as it continues to develop over the coming months and years. If you have any thoughts on the project please don't hesitate to submit a letter to the editor and let us know what you think.
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