MagnumForce wrote:It's Pot-ash, have never heard it pronounced any other way.
J T wrote:MagnumForce wrote:It's Pot-ash, have never heard it pronounced any other way.
I'd never heard of Potash until a few years ago, and when seeing it on the side of a railcar, the first pronunciation that came to my head was "PO-tash."
Mike H wrote:Ok, there are a few things that are kind of driving me crazy with this discussion. There are two ways of determining how big the opportunity is. The simplest way is 1,000,000 tons per year ÷ 100 tons per car = 10,000 cars per year. Or you can take 1,000,000 tons per year ÷ 110 tons per car = 9,090 cars per year. The thing you need to understand about potash is it typically moves to two types of locations. 1. Big terminals for export (example Thunder Bay) or regional distribution (example The Andersons in Webberville) 2. Smaller fertilizer dealers that sell directly to farmers. The big terminals are almost always good for 286k, a large majority of the smaller dealers are on lines only capable of 263k (example North Central Co-op in Coldwater on the Indiana Northeastern).
As it has been mentioned Michigan potash is extremely high quality which changes the dynamics of the situation. Some of the potash does get trucked directly to the farm or small fertilizer dealer, but Michigan potash usually gets trucked to a terminal to get blended with lower grade Canadian potash to bring up the quality. For this reason Michigan potash can fetch a higher price than other N. American deposits.
The potash in Michigan is in "bands or veins" that range in depth. I can't remember exactly what Mosaic told me, but i think it ranges from 6 to 10 feet in depth or something like that. Because of the way this formation sites Mosaic told me it is more logical to solution mine here. Its important to know understand the side effect that comes with solution mining in this area. Michigan sits on a massive salt domes which is why you have Dow in Midland, Oxy in Ludington, Detroit Salt in Detroit, Morton in Manistee & a huge number of salt mines in Ontario. When you solution mine you will also extract naturally occurring salt. So in Hersey for example, for every ton of potash that Mosaic produces they also product two tons of salt as a byproduct. So this means if this new mine actually opens & they produce 1 million tons of potash by solution mining they will likely produce 2 million tons of salt as a byproduct assuming they have the same a similar breakdown to what Mosaic has. That means the opportunity here could be as big as 30,000 cars per year. For that kind of volume you can easily justify building a rail line depending on how far you have to go in addition to a couple other smaller factors.
The last point is that potash is VERY price sensitive, so adding trucking & transloading can be enough to kill a deal or prevent potash from leaving the region which means they only serve the truck market as is the case with Hersey. Also, the Michigan potash is a pure white crystal & the more its handled the more product degradation you have making its value decrease each times its handled. When I first went to the mine in Heresy they didn't even want to talk about potash because of the handling required to get the product in a railcar at Baldwin. Instead they just wanted to talk about salt which basically went nowhere, in part because of the bad experience they had in Cadillac.
To make the move for potash work out of Baldwin a few years ago two important things happened. 1. Mosiac was able to put a small wax coating on the potash to help protect the crystals from breaking down each time it was handled. 2. The potash market was all over the place & with the currency situation in addition to the potash price it was favorable to export potash to Brazil.
There is a big trend throughout the nation to switch to liquid fertilizer which could impact how potash moves, but we shall see. There are also chemical consumers of potash & more recently it is believed that potash can be used in the fracing process.
Time will tell if this mine actually opens, but it could have a huge impact on the railroads in this region IF the market conditions are right. I'm off my soap box.
redside20 wrote:Since work started on the Gibson Yad facility about two years ago, grand opening took place April 27th 2012
There has been more expansion since then.
AARR wrote:redside20 wrote:Since work started on the Gibson Yad facility about two years ago, grand opening took place April 27th 2012
There has been more expansion since then.
Fertilizer companies across MI are increasing capacity too. New fertilizer spurs are going in as well as present companies adding storage.
AARR wrote:When the salt/potash mine in Hersey was being developed in the mid 90's there was a serious effort made to rebuild the line from Clare to Hersey/Reed City. TSBY offered engine and rail. I'm not sure what killed the effort. Might have been lack of funding or NIMBY's, can't recall
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