We currently have access to over 10 billion tonnes of potash reserves in two key deposits in Russia and are conducting geological work on other deposits to which we have secured mining rights. Once on stream, our two ongoing potash projects will have over 8.3 MMT KCI (5.0 MMT K2O) of capacity, which is equivalent to approximately 10% of current global supply. The development of potash capacity is one of our main strategic priorities. We are constructing mining and processing facilities at two locations in Russia; at the Gremyachinskoe deposit (EuroChem-VolgaKaliy, Volgograd region) and at the Verkhnekamskoe deposit (EuroChem Usolskiy, Perm region).
EuroChem-VolgaKaliy, Gremyachinskoe deposit (Volgograd region, Russia)
The Gremyachinskoe deposit is one of the four largest deposits of potassium ore in Russia and is characterized by a 10-meter thick potash layer with an average KCl content of 39.5%. EuroChem-VolgaKaliy has mining rights on more than 1.6 billion tonnes of reserves in the deposit.
Our investment in modern mining operations and ready access to our Tuapse transhipment port facility will provided us with unmatched cost advantages.
Multiple freeze plants remain in operation to sustain freeze walls to a depth of approximately 820 meters around the shafts, while the development of horizontal junctions between the site’s two skip shafts continued to progress.
As of early August, the bottom of skip shaft #1 was at -1,100 meters, in a hard rock (dolomite) layer stretching between the formation’s numerous salt layers. No vertical sinking was performed during the quarter as work primarily focused on the excavation of the loading bin pockets and haulage sections.
Skip shaft #2 reached the salt layer (-1,004 meters) late in April 2016 and a total of 99 meters were sunk during the second quarter of the year. As of early August, the bottom of the shaft was at 1,069 meters. The first junction between the shaft and the main haulage level is being developed.
At the cage shaft, the water ingress continued to be monitored and addressed. We continued with the grouting programme started in the first quarter of the year, which is designed to prevent water seepage below -814 meters, between the shaft’s steel lining (tubing), the concrete and the geological formation. Plans to adjust the mine development plan and schedule to permit the utilization of the two skip shafts remain in place and will allow mining to start from 2018.
Construction and installation continued to progress on numerous surface facilities, the most significant being: the main beneficiation building (including the milling, cleaning, flotation and drying units), finished product storage building, ore storage building, and crushing building.
Sealing it with a first in Russia
As we were once again reminded in 2014, flooding is a key risk to potash underground mining operations. It is estimated that over 50 salt and potash mines across the globe have some degree of water inflow and that one potash mine in four around the world has been closed due to flooding. Currently, inflows of some significance have caused large capital expenditures and/or have placed owners in position to close mines. Some well-known examples include Moab in the US, Cassidy Lake, Penobsquis, Esterhazy, and Patience Lake in Canada, as well as Solikamsk-2, Berezniki-1 and -3 in Russia.
While many technical solutions have been advanced and applied, we believe that EuroChem is the first company in Russia to equip shafts with innovative chemical seal rings with a new variant design. This ‘waterproof’ design is composed of a unique sealant material specifically designed to create a barrier to fluids and low-pressure gases. Similar seals have typically been used in very deep and high water bearing formations in Saskatchewan, Canada. Designed to seal shaft liners, the material is mixed as a slurry under very controlled settings and applied around the shaft below the water table in a specific contained location, which in the case of VolgaKaliy means at a depth of about 850m. It serves to fill the voids created between the interfaces of the shaft’s lining materials such as between the watertight rock formation and the liners; in EuroChem’s case, the very large wedge rings are made from heavy grey cast iron. The material sets up, forming a consistency similar to a natural rubber, soaking up fluids and then expanding to provide a tighter seal between these boundary layers. This then prevents water from migrating down toward the mine or into lower geological formations which are not particularly watertight or impermeable. Similar sealants were used in our Usolskiy shafts, but none have the depths of our VolgaKaliy mine which required this unique design.
Although the material and similar designs are used in Saskatchewan, they underwent thorough testing and certification through the proper Russian Institutes and laboratories to verify its suitability and confirm it was correct for the task. More tests are being conducted against a variety and combination of surfaces to better understand how broad it can be applied in the future.
We installed the first seal on VolgaKaliy’s Skip Shaft #1 in late 2014 and will equip the other shafts as sinking progresses beyond the freeze wall. This approach affords an unprecedented level of protection to the deposit as well as those working on extracting the ore some 1,100 meters below ground. This use of an innovative yet proven technology is emblematic of EuroChem’s consistent application of best practice in order to maintain operational integrity, minimize risks and protect its employees.