Dakota Salts LLC, a subsidiary of London-based Sirius Exploration PLC, said it will drill a test well in early November near Lignite in northwestern North Dakota's Burke County. Dakota Salts said it has leased 7,425 acres in northwestern North Dakota for salt and potash mining.
North Dakota likely holds some 50 billion tons of potash, created by oceans that dried up some 400 million years ago, said Ed Murphy, the state geologist. Sirius spokesman J.T. Starzecki said the growing worldwide population and increased crop production have spurred the need for the agriculture fertilizer.
"The demand globally is very, very high and it's expected to grow," Starzecki said Wednesday.
The state Department of Mineral Resources issued a permit for the test well in August. Murphy said it's the first exploratory drilling permit since 1976 for potash in North Dakota.
Denver-based Dakota Salts said the exploration well will be drilled with Saskatchewan-based North Rim Exploration Ltd. and a subsidiary of Schlumberger Ltd., the world's biggest oilfield services company.
Starzecki said a rig is being moved from Mexico to drill the potash well, which would be nearly two miles deep. Spare rigs are scarce in North Dakota, where a record 153 rigs were drilling on Wednesday.
Potash would be gleaned using solution mining, a process that involves injecting liquid in holes to dissolve and recover it.
Murphy said solution mining for was done in North Dakota from 1960 to 1989 near Williston, in the northwest part of the state. About 1 million tons of halite was recovered during that time, he said.
The mined halite was used for table salt, water softener and livestock salt licks, Murphy said.
Dakota Salts is using grant money from the state to study whether the mines can be used to store compressed air for electricity-generating wind farms once the potash is removed.
Besides storing compressed air, Dakota Salts says the mining caverns also could store carbon dioxide from the state's coal-burning power plants or natural gas from its oil fields.
North Dakota's Industrial Commission gave the company a $225,000 grant in April to study the ideas. Gov. John Hoeven, Attorney General Wayne Stenehjem and Agriculture Commissioner Doug Goehring make up the commission.
Starzecki said finding out North Dakota's potash potential is the priority. The storage voids created by mining "is part of our longer-term vision," Starzecki said. "But right now we're focusing on potash exploration."
Sirius Exploration has mining interests in China, Australia and Macedonia.