Potash junior Encanto to supply a minimum of five million tonnes of potash per year for the next 20 years
Mining.com | January 19, 2017: Encanto Potash Corp. (TSXV: EPO) on Wednesday announced the finalization of a blockbuster agreement with India’s national farmers co-operative to supply a minimum of five million tonnes of potash per year for the next 20 years.
Vancouver-based Encanto’s is advancing a $2.9 billion potash project in the Saskatchewan province of Canada in a joint venture with the Muskowekwan First Nation. Encanto President Stavros Daskos said the deal is “clearly a defining moment for our company and the industry. India imports 100% of its potash and is susceptible to cartel-like practices from producers that can hurt its national food security.”
NACOF was established under the Indian ministry of agriculture and represents farmers in 25 out of 29 states across the subcontinent. India is home to some 55 million small scale farmers and NACOF boasts an annual budget of $7.7 billion according to a statement.
The country imports roughly 6 million tonnes of muriate of potash a year, a substantial portion of a global industry for the crop nutrient of roughly 50 million to 60 million tonnes. The potash price has been under severe pressure since 2011, more halving in value to trade at $215 a tonne at the end of 2016. MOP prices peaked in 2009 just shy of $900 a tonne.
Encanto would be the first junior mining company to bring a potash mine into production in an industry dominated by a handful of global giants based in in North America and Russia. Encanto’s proposed mine about 100 km northeast of Regina will be the first potash mine in Saskatchewan on First Nations land.
According to a 2013 pre-feasibility study, the project boasts proven and probable reserves of 162 million tonnes, with plans for a 2.8 million tonne per year mine with a 50 year plus life. The proposed mine would employ 1,000 people during construction and 500 permanent jobs when complete.
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