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Potash mines being explored on Indian lands

By Donna Beutler Date: March 31st, 2008

In a move that could see some strong economic gains for First Nations people in this area, Encanto Resources out of Calgary has signed a memorandum of understanding (MOU) with the Federation of Saskatchewan Indian Nations (FSIN) to explore the potential for potash mines on Indian lands in this province.
An agreement was signed last Wednesday by FSIN vice-chief Morley Watson and president and CEO of Encanto Resources Jeffrey Standen. The goal will be to find potash reserves on First Nations lands that can be mined economically.

Encanto, a private oil and gas company, has held some preliminary discussions with various Saskatchewan bands and hopes to be able to sign MOUs that will permit them to do seismic exploration on First Nations land. If there are reserves of potash found on First Nations land, agreements would be entered into with the individual bands involved.

Three per cent royalties would be paid to a band by Encanto Resources if a potash mine is developed on their land. There would also be a royalty paid to the band’s trust fund in Ottawa if a potash mine is constructed. This trust fund is one that is monitored by Indian and Northern Affairs Canada.

Exploring for potash on Indian lands in an area that covers Saskatoon to the north, Regina to the south and the Manitoba border to the east, could cost in the neighbourhood of $20 million. 400,000 acres of Indian land are considered to be potash-bearing. The Herald was unable to confirm whether Indian land in this area is part of the 400,000 acres as several calls to Morley Watson’s office were not returned.

If a potash mine were to be built on First Nations land, the cost would be around $1 billion and would employ hundreds of people. Construction of a mine would take approximately five years following two to three years of environmental impact assessments.

Watson hopes the agreement signed with Encanto will give First Nations an opportunity to create jobs and wealth for individual band members. “We, as First Nations governments,” he said, “have to start looking at developing what we call own-source funding. We have to take it upon ourselves to do what we have to do to improve the quality of life for band members.”