With a recent $80 million USDA grant, a Michigan company is inching closer to the $1.2 billion it needs to construct a potash extraction facility in northern Lower Michigan.

Northeast of Big Rapids, Mich., in the small town of Evart, Michigan Potash and Salt Co. is looking to harvest a rock called the Borgen Bed, which lies a mile and a half below the surface, for potash — a potassium chloride mineral and critical crop nutrient that also reduces water needs for crops.

Construction is expected to take 36 months. Once on line, planned for 2028, the plant will initially produce upward of 800,000 tons of potash and 1 million tons of food-grade salt annually — the largest U.S. source of the mineral.

MPSC says it can supply all of Michigan with its 300,000 tons of annual potash needs, and it will have easy access to markets in Indiana, Wisconsin, Illinois, Ohio and states in the East.

Covering 14,500 acres, the bed spans over Osceola and Mecosta counties. MPSC officials say it has the potential to reduce reliance on imported potash, improve the nation’s trade balance, create jobs, and improve food security and the rural economy. It can also provide farmers with an easily accessible American-made product, which is largely used to grow corn, soybeans, sugarbeets and potatoes.

Related:2 Michigan companies receive grants to diversify business

A company is primed to be the largest domestic source of premium potash for American farmers. Michigan potash is the purest known on Earth today, according to a report by the U.S. Geological Survey.

“Michigan Potash and Salt Co. appreciates the strong support from the USDA, and this announcement is a significant milestone in the company's mission to advance domestic potash production and help American farmers by providing a critical and all-natural fertilizer necessary for food security, while reducing food inflation and our country’s 96% reliance on foreign potash imports,” says Aric Glasser, chief operating officer of MPSC. “It’s good for consumers, it’s good for Michigan, and it’s good for the United States.”

The USDA grant is in addition to a 2022 state of Michigan $50 million subsidy and an inducement resolution for $225 million in tax-exempt Michigan state bonds from the Michigan Economic Development Corp.

Imports are primarily from Canada, but Russia and Belarus are also contributors to the tightest controlled commodity globally.

The company expects to supply about 10% of the U.S. demand for potash, with a major advantage of being within a truck’s travel distance of where half the potash is used to grow food for the country and the world. Michigan also has multiple rail lines, and can ship product by barge, lakers and ocean-going vessels.

Related:Which farm bill commodity program best fits your farm?

Mineral rights secured

MPSC, headquartered in Colorado, has already leased mineral rights from 450 families, who will receive royalties.

“We're going to be investing more than a billion dollars into a small town, and it should be impactful, maybe transformational, in a number of ways,” Glasser says. “Our initial 400 skilled workers will need places to stay, food and other supplies and services, and thereafter, we’ll have 200 full-time jobs. It’s going to touch a lot of people, families and local businesses.”

The need for the facility was underscored by a presidential order issued in December 2018 calling for a secure and reliable U.S. supply of 35 critical and strategic minerals, including potash.

Rising startup costs

Founded in 2011, the privately held company had hoped to start production in 2014, but regulatory hurdles and rising construction and labor costs postponed progress. The initial investment has gone from an estimated $750 million to $1.2 billion now.

MPSC began clearing ground and infrastructure improvements during the winter of 2019, including power and road upgrades, after securing an agreement with Barton Malow Co. for engineering, procurement and construction.

Related:USDA to survey farmers on land ownership, finances

In 2021, with final regulatory approval, the company told Michigan Farmer it expected to be on line in 2024. But then COVID-19 hit in 2020. The company struggled in securing investors, but has since switched its capital facilitator and hired J.P. Morgan.

While potash prices have come down from their 2021-22 highs, driven by the Russian invasion of Ukraine, current retail ranges from $380-$420 a ton in the Michigan-Indiana-Ohio region.

“We will be the lowest-cost potash producer in North America, with the highest quality, which reduces processing costs,” Glasser says.

The process

All permits have been secured for new potash wells, which will be drilled directionally from a central location on 2.5 surface acres to cover more than 250 acres of deep subsurface deposits.

Hot water is circulated through deep geothermal wells in the Borgen Bed, creating water enriched in potash and salt. It is then pumped to the facility, where the enriched water is boiled and evaporated, leaving potash and salt crystals. They are harvested, cooled, compacted and crushed to size and stored.

The closed-loop system allows for about 90% of process water to be recaptured and recycled back through the system to re-enrich.

Canadian mine tour

This video shows the process of mining potash at a Nutrien's Canadian mine.

USDA invests in 9 fertilizer projects

With the goal of reducing U.S. dependence on imported potash, USDA is investing $116 million in domestic fertilizer production projects in nine states, with nearly 70% headed to MPSC.

Other states with fertilizer projects authorized by the Fertilizer Production Expansion Program include California, Colorado, Georgia, Indiana, Iowa, Kansas, Oklahoma and Wisconsin.

FPEP is funded by the Commodity Credit Corporation and provides funding to independent business owners to help them modernize equipment, adopt new technologies, build production plants and more.

Discovered in 1980s

The potash reserve is not a new discovery, as it was discovered during exploration in the early 1980s.

Solution-extraction technology was brought to the state in the late 1980s by the Pittsburg Plate Glass’ kalium (potassium) team, based out of Canada. The kalium team was responsible for the invention and success of the solution-extraction technology in Canada and recognized the promise and strategic location of Michigan.

The team successfully explored, produced and proved its hypothesis by building and operating a facility in Hersey, Mich., near Evart. Over time, the kalium team and the Hersey facility were merged into the Mosaic company.

Mosaic operated the potash mine until it sold the operation in 2009 to Cargill Inc., as a salt-only facility and the potash processing portion of the facility was demolished.

So, why was a mine with a 200-year resource life closed?

Mosaic was producing 140,000 tons of potash annually in Michigan and 10 million tons in Canada — a small asset in a huge Mosaic portfolio — and the quality and quantity of the Michigan bed was not yet completely realized.

Using geologic data verified and housed at Western Michigan University's Michigan Geological Repository for Research and Education, Ted Pagano, founder and CEO of MPSC, began securing mineral rights from landowners in 2011.

Bringing Michigan potash to market, Pagano says, will provide a domestic source of the element at a reduced cost to Midwest farmers as well as to the national agriculture industry.