BISMARCK, N.D. (AP) -- North Dakota's nascent potash mining industry, which has drawn scrutiny from state lawmakers and regulators, is not likely to begin production for at least three years, a mining company official said Thursday.
J.T. Starzecki, a senior manager for Dakota Salts LLC, said the state's newly approved 2 percent tax on potash production would not hamper development, although he said the levy was higher than in some other jurisdictions.
"It's a middle-of-the-road policy that gives us a good starting point," Starzecki said. "It could be worse, it could be better, but it's livable. We're comfortable enough to pursue our project based on the landscape as it exists today."
Starzecki spoke Thursday to the North Dakota Legislature's interim Natural Resources Committee.
The panel is studying North Dakota's potential for potash mining and what may be necessary to handle the changes that industry development could bring to rural northwestern North Dakota. The committee will draft a report on its findings this fall.
The Canadian province of Saskatchewan, which borders North Dakota, is the world's largest potash producer. Potash is an ingredient used to make fertilizer; it is used to help grow corn in the United States and is in high demand in Brazil, India and China.
Dakota Salts drilled a test well in December 2010 in Burke County, in North Dakota's northwestern corner, to explore the depth and quality of potash deposits there.
The findings are still confidential, but an official for Dakota Salts' parent company, Sirius Minerals PLC, has said the results were not as promising as hoped, and that Sirius was focused on building a new potash mine in north England.
Starzecki told North Dakota lawmakers on Thursday that the company still hoped to develop the Burke County project and that improved potash processing techniques could make doing so more economically attractive.
The company is still studying test well data and deciding what best to do next, Starzecki said. In an interview, he said North Dakota mining operations are not likely to begin for at least three years.
"I don't want to quote specific dates, but I would say that it's not feasible to think anything can be done prior to a three-year period of time," he said. "It takes so much time to get the infrastructure set up."
Another test well is unlikely for now, because the first cost about $4 million to drill, Starzecki said.
Ed Murphy, North Dakota's state geologist, said the test well site had been cleaned up since a potash development critic, Ted Hawbaker, of Portal, told lawmakers earlier this year that it had been left a mess.
State regulations require Dakota Salts to restore the drilling site to its former condition. Murphy said the land's owner has asked that reclamation be delayed because the well may be sold for another use, such as for oil exploration or salt water disposal. Brine is a byproduct of oil production, which is booming in western North Dakota.
Starzecki, in an interview, said reports of an unkempt drilling site were exaggerated.
"The site's been cleaned. We've had all the environmental box-checking done and have our reclamation plan already drawn up," he said.
- North Dakota