Potash Find

Anything pertaining to railfanning in Michigan.
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SD80MAC
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Re: Potash Find

Unread post by SD80MAC »

A lot of Canadians I know pronounce it "poh-tosh". I've always referred to it as "pot-ash".
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Jetlink
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Re: Potash Find

Unread post by Jetlink »

SD80MAC wrote: I've always referred to it as "pot-ash".
That's how all the farmers around here that actually use the product say it.
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MagnumForce
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Re: Potash Find

Unread post by MagnumForce »

It's Pot-ash, have never heard it pronounced any other way.

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J T
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Re: Potash Find

Unread post by J T »

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." :lol:
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David Lang
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Re: Potash Find

Unread post by David Lang »

Let's get back to why this thread was posted - speculation regarding putting the rails back in!!!!

I know there are many people on this site that are "in the know", so if anyone hears anything about track going back in, PLEASE let us know! I'm all for that and will be very pleased to see it happen! Thanks very much.

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MagnumForce
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Re: Potash Find

Unread post by MagnumForce »

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." :lol:

A farmer would look at you like you were an idiot if he heard you say that LOL As for rails coming back, I would not hold my breath.

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J T
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Re: Potash Find

Unread post by J T »

MagnumForce wrote:A farmer would look at you like you were an idiot if he heard you say that LOL
I've got no problem with that. :D
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CAT345C
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Re: Potash Find

Unread post by CAT345C »

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.

Mike H
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Mike H
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Re: Potash Find

Unread post by Mike H »

Don't you swear at me fella lol!

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redside20
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Re: Potash Find

Unread post by redside20 »

Dok like you I'd like to see more rail business in Michigan and even though I don't see eye to eye on some things with Magnum, CSXCO etc...I'm going to have to agree with them this time because that's the way business is. Why spend money having to relay trackage, the cost of material, additional taxes and such to attract that kind of business. For example Potash Corp was staking out several Midwestern Sites including Michigan for a rail to transfer distribution site. One of those places they were staking out was Gibson Yard in Hammond Indiana and Potash Corp chose them....So why chose Gibson Yard of all places...the answer is logical and practical...location, location, location..Afterall Chicagoland is right in the heart of it all, you got railroad tracks up the wazoo, and land around it to boot and lets not forget that Michigan is surrounded by lakes. This is why Potash chose Hammond Indiana...
http://www.nwitimes.com/business/local/ ... z1agTjjPmP
http://abclocal.go.com/wls/story?id=8414737
Last edited by redside20 on Mon Oct 07, 2013 11:35 am, edited 2 times in total.
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redside20
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Re: Potash Find

Unread post by redside20 »

Since work started on the Gibson Yad facility about two years ago, grand opening took place April 27th 2012
http://www.potashcorp.com/news/1477/

There has been more expansion since then.
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AARR
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Re: Potash Find

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redside20 wrote:Since work started on the Gibson Yad facility about two years ago, grand opening took place April 27th 2012
http://www.potashcorp.com/news/1477/

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.
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redside20
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Re: Potash Find

Unread post by redside20 »

AARR wrote:
redside20 wrote:Since work started on the Gibson Yad facility about two years ago, grand opening took place April 27th 2012
http://www.potashcorp.com/news/1477/

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.
I've noticed that, especially along the Grand Elk between Kalamazoo and Three Rivers and up in the thumb region...
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redside20
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Re: Potash Find

Unread post by redside20 »

This is Potash Corp's new Distribution facility on the south side of Gibson Yard and it just a ginormous layout
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TSB
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Re: Potash Find

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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 :?
We made an "all in" offer to rebuild the rail and provide the equipment. The producing company agreed, then
renigged. They then built a transload in North Yard (Cadillac) but their promised shipping of four c/l potash
to 1 c/l salt turned out to be 6 salt to 1 potash. Then their salt was nothing but dust and the adjacent Chevy
dealer was far less than happy. They then abandoned the transload. Our purchased equipment sat idle until we found another use. Their marketing people at first quit returning our calls, then visited and said they were
ashamed to call or see us.

Unless their top twelve officers (think Last Supper) have all been replaced, don't touch this at any price.
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Raildudes dad
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Re: Potash Find

Unread post by Raildudes dad »

I attended a lunch presentation Tuesday on the GR gypsum mine and I-196 and the Jackson coal mines and I -94. I was fortunate to sit at the speakers table. The speaker is a well known mining expert.

I had the opportunity to discuss the "new discovery" with him. He agrees, if this was such a good project, Mosaic wouldn't have let their mineral leases expire. Furthermore he sees quite a few groups putting projects like this together, not to mine but to sell to investors trying to get in on the "mineral boom". Last, he says the breakup up the Russian potash cartel will greatly lower the worldwide price. In his words, he very skeptical of the success of this proposed venture.

jrgerber
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Re: Potash Find

Unread post by jrgerber »

Here is an article that discusses Potash both near Hershey and also MIdland:

http://www.crainsdetroit.com/article/20 ... in-of-salt

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AARR
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Re: Potash Find

Unread post by AARR »

jrgerber wrote:Here is an article that discusses Potash both near Hershey and also MIdland:

http://www.crainsdetroit.com/article/20 ... in-of-salt
Thanks for posting. This is a good lesson to us railfans that there are so many factors railroads must contend with to pick up new business and some of those have nothing to do with the company or railroad but world markets and other crazy stuff.
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CSX_CO
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Re: Potash Find

Unread post by CSX_CO »

Doktor No wrote:THERE YA GO! Could be interesting but I was nearly shot down some time back on this. Too bad they missed.
Letsee...Cranes is an INVESTORS rag. Sounds like the developers are looking for people to invest in them, so of course they're going to paint a rosy picture of everything. Going to be a tough sell with the worldwide price down, and 'threats' of cutting production the only way to artificially inflate the price.

"Everyone seems to agree that making money on Michigan potash isn't a get-rich-quick scheme. It will take years to get production from mines that ultimately would require financial backing of some of the world's largest corporations — a daunting proposition when the price of potash has cratered on international markets. "

So...they're looking for millions (if not billions) in startup capital to fund an exploratory venture to try and find the best mines. Meanwhile, other mines are going to cut production to force the prices back up because of the collapse of the market. Nevermind that the stuff is a mile and a half down, and cannot be dug directly. So once the Michigan mines come on line, those 'established mines' can ramp up production, force prices down, and suddenly those 'startup' mines are struggling to make ends meet. Same thing that has happened time and again, the latest with the Ethanol boom and bust. Economies of Scale.

Whatever. Sounds like a awful lot of hurdles to get over for investors on a 'what-if'. More power to them, but I won't be holding my breath waiting on the first train loads to come out of Michigan.

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Standard Railfan
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Re: Potash Find

Unread post by Standard Railfan »

After doing some research, the potash supply is expected to grow at a greater rate than potash demand over the next 5 years due to brownfield projects in progress or plan. After 2020, the demand is expected to grow faster than the supply if no new Greenfield projects come on line.

ftp://ftp.fao.org/ag/agp/docs/cwfto16.pdf

http://www.mining.com/potash-supply-to- ... 20-report/

Given the regulatory climate in this country, a seven year cycle from project launch to production is probably short.

Given that potash is used primarily as fertilizer for food and grain crops, the long term demand is unlikely to drop given the growth rate in the world population.

Petroleum costs are expected to keep increasing driving up transportation costs.

Seems to me that if you were interested in getting into the potash business located within a few hundred miles of one of the largest grain growing regions in the world, now would be the time to start.

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