New Mexico Business Weekly
July 8th, 2005

Intrepid aims to bring Carlsbad 100 jobs
 - by Clay Holtzman, NMBW Staff

A Denver mining company that has been investing big bucks around Carlsbad says it soon hopes to add 100 jobs and breathe more life into the state’s resurgent potash industry.

Since early 2004, Intrepid Mining LLC has hired 250 Carlsbad workers furloughed from a bankrupt competitor – essentially doubling the company’s workforce. Intrepid also has invested about $60 million in acquiring and expanding mining and processing operations near the southeast New Mexico town. Intrepid says it will open a $12 million plant to process a similar mineral, also near Carlsbad, within a month.

“We’ve been doing it quietly,” says Robert Jornayvaz, principal with the Intrepid Potash, Inc., which owns Intrepid Mining LLC.

In late June, Intrepid received the support of the Eddy Country Commission in its quest to secure $21.5 million in state-backed Industrial revenue bonds. The company intends to use those bonds to fund a $27 million solution-mining project, similar to the company’s existing operations in Moab, Utah, that could generate 100 more jobs for Carlsbad.

Once expansion plans are complete in about 18 months, its principals says Intrepid will have invested about $90 million in the Carlsbad operations, have a local workforce of more than 600 and increase production at the nation’s largest potash production complex by more than 50 percent.

Po-what?

Potash is a naturally occurring, salt-like mineral. It is primarily used in fertilizers because it is rich in potassium, one of the major nutrients required by plants.

In 2004, 70 percent of the $315 million worth of marketable potash ore mined in the U.S came from New Mexico, according to a January, 2005 report released by the US. Geological Survey. The nation’s largest potash reserves are in New Mexico.

Not only does Carlsbad have lots of potash, It is also the world’s only site where another mineral, langbeinite, naturally occurs. That mineral, which will be processed at Intrepid’s new production plant due to open a month, is rich in both potassium and magnesium and is used in specific types of fertilizers.

Washing Up Sales

Intrepid acquired its Carlsbad operations from Mississippi Potash Inc. in late 2003 after that company’s parent business, Mississippi Chemical Corp., filed for bankruptcy.

Intrepid paid $30 million to aquire Mississippi’s mining operations and leases in Carlsbad and then spent another $30 million on equipment, facilities and the re-hiring of furloughed employees.

Its plan to use the same solution-mining process that’s doubled production at a much smaller mine the company operates in Utah.

If permitted by the state’s Environment Department, the process will flood non-potable water into the oldest of the three Carlsbad potash mines and then pump the solution into four, 400-acre “solar ponds”. The solution’s water evaporates in the sun, leaving behind the potash, which is then collected.

The evaporation ponds – each equal in size to about 365 football fields – will add at least 25 jobs each, says Jornayvaz. Intrepid already has four of the solar ponds at its Cane Creek facility in Moab.

“We’re quite comfortable with the technology,” Says Hugh Harvey, Jornayvaz’ co-principal at the Intrepid Potash, Inc..

Liz Thomas, staff attorney with the Southern Utah Wilderness Alliance, says the solar ponds in Utah are an eyesore adjacent to the Canyonlands National Park. But because they are on private land, there is nothing her organization can do about them. “They are huge. They are not natural. It’s just the wrong place for those ponds to be in world-class scenery,” she says.

Resurgent Industry

Intrpid’s timing has apparently been good. Principals say when they decided to purchase Mississippi’s potash assets in New Mexico, the mineral was selling for about $105 a ton. Now, it goes for about $150 a ton.\

“Potash prices are at a record high now,” Carlsbad Mayor Bob Forrest says. Forest says with 1,100 employees, the industry is already Eddy County’s largest employer.

Forrest adds that The Mosaic Co. (NYSE: MOS), which also operates a potash mine near Carlsbad, has already increased its workforce by about 100 or 150 in the last year.

Carlsbad isn’t the only part of New Mexico benefiting from an increased interest in potash.

According to the New Mexico State Land office, fiscal year 2004 potash royalties were about $587,000. For the first 11 months of fiscal year2005, those royalties jumped to $891,000.

Intrepid principals say state officials from all levels have been helpful in their plans.