‘Historic day’ as MMF signs royalty agreement with first potash mine

Hey there, time traveller!
This article was published 28/02/2025 (221 days ago), so information in it may no longer be current.

Promises of potash money and partnership led the Manitoba Métis Federation to declare Friday a “historical day.”

David Chartrand, president of the Métis government, uttered the phrase upon announcing the MMF had signed a royalty agreement with the developer behind Manitoba’s first potash mine.

“There are tons and tons and tons of potash in the Russell area,” Chartrand said. “That’s been sitting there untapped, unused, for too long.”

Potash is a key ingredient for fertilizer. Saskatchewan has the world’s biggest supply; it produced 21.9 million tonnes from its 11 mines in 2023.

Potash mining in Manitoba is just beginning. The Potash and Agri Development Corporation of Manitoba (PADCOM) is on site in Harrowby, approximately 16 kms west of Russell, extracting and shipping the product.

The company produces about three tonnes of potash hourly, said PADCOM president Daymon Guillas. He’s expecting to increase production to five or six tonnes per hour “quickly.”

“There’s so much demand for it,” Guillas said. “If we could fill all the requests right now, we’d be about three million tonnes per year.”

As production increases, PADCOM is inking royalty agreements — contracts where financiers and partners receive a share of future revenue.

Chartrand wouldn’t provide details of the MMF’s deal. The Métis government is looking at investing millions of dollars in the mine’s next phase, he said.

He and Guillas have been in talks for more than a decade. Guillas, a businessman who owns the Russell Inn, started PADCOM.

Past mining approaches — where companies enter an area, dictate operations and disregard the environment — “wouldn’t have worked well with us,” Chartrand stated.

“You’re going to spend 10 years, 20 years in the courts and find out who’s the winner and who’s the loser. Or, you could find a way where you’re both a winner.”

Chartrand cited a Métis Nation Saskatchewan case — it has a lawsuit before the courts alleging it wasn’t consulted properly on uranium exploration permits.

Guillas emphasized the importance of “meaningful ownership (and) profit sharing … with community.”

Eleven per cent of net profits will be shared with community, he said Friday. A 2022 provincial government news release outlined PADCOM would present “community benefit agreements” with the MMF and the municipality of Russell-Binscarth.

PADCOM was greenlit to start extraction in 2022. At the time, Gambler First Nation was a 20 per cent equity owner. The First Nation has since split with the mine. They’re welcome to rejoin “at any time,” Guillas said.

Many people have royalty agreements with PADCOM, he continued. Investment comes from Manitoba, British Columbia and Ontario and incorporates friends and family.

Both Guillas and Chartrand expressed optimism about the potash operation’s future.

“We’ll have benefits for over 100 years,” Guillas said. “The deposit’s so big, they can be mining for 200 years, 300 years.”

Potash hovered around US$328 per tonne in June 2023.

The Manitoba site hasn’t scared the large players yet, but it’s coming, Chartrand promised: “I’m sure there’s going to be questions posed by the big industry that (the) small guy’s coming along.”

Initially, the MMF was skeptical about the facility. Staff eased into a level of comfortability as they watched and measured PADCOM’s practices, Chartrand said.

Potash is trapped underground. PADCOM uses a process called selective solution mining where the potash is liquified and brought to the surface.

Guillas touted the method as requiring less water than high volume mines and leaving no tailings, or by-products, on the surface.

PADCOM has 22 staff on payroll. Guillas anticipates growing the team to some 200 members. On Friday, he pledged to hire Métis contractors and professionals.

Revenue from the potash mine will support food programs, Guillas stated.

Potash shipments from Manitoba currently stay in Canada. However, the United States needs potash for its fertilizer “like you wouldn’t believe,” Chartrand said, referencing U.S President Donald Trump (who’s threatened sweeping tariffs against Canadian imports for months).

Canada produced 32 per cent of the world’s potash in 2023, per Natural Resources Canada data. Russia accounted for the second largest production, with 18 per cent of the total supply.

— with files from the Canadian Press

gabrielle.piche@winnipegfreepress.com