We are the only producer of potash in the United States and we are one of two
producers of langbeinite, which we market and sell as Trio®. Potash, or
"muriate of potash" or "potassium chloride," is used as
a fertilizer in agricultural markets worldwide. Potash is also used in oil and
gas drilling and stimulation fluids and in animal feed. Langbeinite is a low-chloride
potassium fertilizer that also contains sulfate and magnesium that is used primarily
in magnesium and sulfur deficient soils and on crops that need a low-chloride
source of potassium such as citrus, vegetable, sugarcane and palm. It is also
used as an animal feed supplement.
Fertilizer serves a fundamental role in global agriculture by providing essential
crop nutrients that help sustain both the yield and the quality of crops. The
three primary nutrients required for plant growth are nitrogen, phosphate, and
potassium. There are no known substitutes for these nutrients. A proper balance
of each of the three nutrients is necessary to maximize their effectiveness.
Potassium helps regulate plants physiological functions and improves plant
durability, providing crops with protection from drought, disease, parasites,
and cold weather. Unlike nitrogen and phosphate, the potassium contained in
naturally occurring potash does not require additional chemical conversion to
be used as a plant nutrient.
In addition to the primary nutrients, which are required in the greatest quantities
in crop nutrition, important secondary nutrients such as sulfur and magnesium
are also essential in crop nutrition. Intrepids Trio® product contains
the primary nutrient potassium and two secondary nutrients in its sulfur and
magnesium content.
Long-term global fertilizer demand has been driven primarily by population growth
and global economic conditions with annual demand variations based on planted
acreage, agricultural commodity yields and prices, inventories of grains and
oilseeds, application rates of fertilizer, weather patterns, and farm sector
income. We expect these key variables to continue to have an impact on global
fertilizer demand for the foreseeable future. Sustained per capita income growth
and agricultural policies in the developing world also affect global demand
for fertilizer. Fertilizer demand is affected by other geopolitical factors
such as temporary disruptions in fertilizer trade related to government intervention
and changes in the buying patterns of key consuming countries. Volatility in
agricultural commodity prices also may impact farmer fertilizer buying decisions.
Industry experts continue to forecast increasing potash consumption rates as
world population grows. However, significant additional capacity has been added
over the last few years by existing potash producers. In addition, there are
numerous brownfield and greenfield expansions that have been financed or are
nearing completion.
We produce potash from three solar evaporation solution mining facilities: our
HB solution mine in Carlsbad, New Mexico, a solution mine in Moab, Utah, and
a brine recovery mine in Wendover, Utah. We also operate our North compaction
facility in Carlsbad, New Mexico, which compacts and granulates product from
the HB mine. Solution mining is a process by which potash is extracted from
mineralized beds by injecting a salt-saturated brine into a potash ore body
and recovering a brine that contains potash and other minerals. The brine is
brought to the surface for mineral recovery through solar evaporation. For solar
evaporation, the brine is placed in ponds and solar energy is used to evaporate
water thus crystallizing out the potash and minerals contained in the brine.
The resulting mineral evaporates are then processed to separate the minerals
for sale. Solution mining does not require employees or machines to be underground.
We produce Trio® from our conventional underground East mine in Carlsbad,
New Mexico. A conventional underground mine uses a mechanical method of extracting
minerals from underground. Underground mining consists of multiple shafts or
entry points and a network of tunnels to provide access to minerals and conveyance
systems to transport materials to the surface. Underground mining machines are
used to remove the ore and a series of pillars are left behind to provide the
appropriate level of ground support to ensure safe access and mining.
Until mid-2016, we also produced potash from our East and West mines in Carlsbad,
New Mexico. In April 2016, we converted our East facility from a mixed-ore facility
that produced both potash and Trio® to a Trio®-only facility. In addition,
in early July 2016, we idled operations at our West facility and transitioned
the facility into care and maintenance. These changes were designed to increase
our production of Trio®, a product that had traditionally shown more resilience
to pricing pressure than potash, and to lower costs in a time of declining potash
prices.
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