The Potash Story: Quiet But Not Quite Dead -- Is Wall Street Looking for Love in All The Wrong Places?

In the print edition of the WSJ, October 22, 2012, page B3, a little story, easily missed: US firm, China sign potash deal

Data points

• source for potash in this story: Arizona, near Holbrook AZ;
• seller: Prospect Global Resources, Inc (US)
• buyer: Sichuan Chemical Industry Holding Co (China)
• to buy: 500,000 metric tons annually over 10 years staring in 2015; agreement
• to date, Prospect has spent $75 million of the roughly $1 billion it will need to develop its property
• bigger challenges: company yet to secure government permits; needs to raise millions of dollars
• US exported 215,000 metric tons of potash in 2011
• Arizona may hold as much as 2.5 billion tons of potash

I'm hearing stories that Wall Street investors are starting to take note of the Bakken, but a) they can't find big enough projects to spur interest; and, b) the risks of federal regulation of fracking are scaring them off (it's reported elsewhere enough times I'm not going back to look up the links, again). Potash mining does not require fracking.

Folks might recall:

• The drive for potash, as a fertilizer, is being driven by the Chinese
• A small portion of North Dakota sits on 33% of all the known potash reserves in the world
• It is the same basin that allows Saskatchewan to produce 90% of all potash produced in North America
• Officials estimate there are 7 billion tons of potash in northwestern North Dakota and northeastern Montana; others suggest as much as 60 billion tons
• Dakota Salts LLC, a subsidiary of Sirius Minerals, London, England, got the first permit in decades to drill for potash in North Dakota

Sirius Minerals has backed out of North Dakota: The company says it is focused on its flagship operation in England and has written down the value of the remainder of its portfolio (page 12 of the annual report); and, this on page 26: "...and no further work is planned in the near future in North Dakota."

From Geo News, January, 2011:

While Anderson and Swinehart (1979) placed the resource at 60 billion tons (50 billion in North Dakota and 10 billion tons in Montana) the U.S. Geological Survey estimates the total U.S. potash resource at roughly 7 billion metric tons, with the majority of that occuring in northwestern North Dakota and northeastern Montana (Jasinski, 2010a).