In anticipation of a new potash mining industry in western North Dakota, the state legislature has begun discussing how to tax the resource once production begins.
Potash--lots of it--is found primarily in Burke, Divide, Renville and Bottineau counties and is used mainly for making fertilizer. In comments made recently, North Dakota's director of mineral resources, Lynn Helms, estimated that there are 20 billion tons of recoverable potash in North Dakota worth, at today's prices, between 6 and 15 trillion dollars. According to Helms, North Dakota's potash reserves make it possible for the state to be the number three potash producer in the world.
Dakota Salts, a subsidiary of London-based Sirius Exploration, recently completed drilling a test well in southern Burke county to determine the potential for potash mining in that area. The test samples will be analyzed by the North Rim core facility in Saskatoon, Saskatchewan and then by the Saskatchewan Research Council. The company expects this process will be completed by mid-February at which point the next North Dakota drilling location will be determined.
According to Lynn Helms, Dakota Salts plans to have a pilot mine online within two years followed by full-scale mining in 3-5 years. Plans also include a potash processing facility to be built in Burke County that would employ 100 people. Dakota Salts officials have estimated that production could continue for between 20 and 25 years.
As mining progresses, the caverns that are created could be used by wind farms. In April 2010, the North Dakota Industrial Commission awarded a grant to Dakota Salts under the state's Renewable Energy Program to study compressed air energy storage (CAES) of off-peak electricity produced by area wind turbines using mine caverns as the equivalent of underground storage tanks.
The potash bill under consideration (HB1046) would increase the current 4 percent tax rate to 5 percent and give local governments a larger revenue cut. The bill would give the host county 70 percent of the tax revenue during the first three years of a mine's production. The percentage would drop incrementally to 30 percent over 10 years. North Dakota's general treasury would get the remaining revenue left after the county's cut.
Reference links...
http://www.dakotasalts.com/index.php?option=com_content&view=article&id=98:north-dakota-land-acquisition-and-drilling-update&catid=44:news&Itemid=87
http://www.dakotasalts.com/index.php?option=com_content&view=article&id=76&Itemid=82
http://finance.yahoo.com/news/ND-county-officials-want-apf-820117068.html?x=0&.v=1
http://www.kxnet.com/getArticle.asp?setCity=bis&s=rss&ArticleId=702932
No comments:
Post a Comment