The U.S. Department of Energy’s (DOE) Loan Programs Office (LPO) announced a conditional commitment for a loan guarantee of up to $1.26 billion for the Michigan Potash & Salt Company to finance the construction of its project in Osceola County that is expected to create 1,400 full-time equivalent (FTE) construction jobs utilizing union labor and 200 ongoing and full-time employment to produce the mineral resource for 150+ years.
This facility will create solid-paying jobs and improve U.S. food security by reducing America’s near-total dependence on foreign countries for a critical mineral. And this partnership enables new domestic production of an all-natural fertilizer nutrient and will bring low-carbon potash and food-grade salt to market within the U.S. demand center. Due to this project, industrial tax revenues are expected to triple in Osceola County, boosting revenue for local schools, roads, police and fire services, healthcare, and more.
Potash is an essential plant nutrient and fertilizer ingredient, and over 90% of the potash used by U.S. farmers is imported, in some cases from hostile countries like Russia. After operational, this facility and its Michigan employees will extract and process about 800,000 tons of potash and 1 million tons of food-grade salt each year.
According to geological studies, Michigan is uniquely situated in that it contains the purest reserve of potash in the world. And potash is an essential water-saving nutrient for healthy crops, improving yields while requiring less water for irrigation and leading to lower costs for food at the grocery store.
Farmers across the Corn Belt and the U.S. will no longer be forced to buy potash imported solely from countries like Russia, Belarus, and Canada, improving the nation’s trade balance and food security.
The potash will be sold directly to farmers and to the agricultural industry in partnership with ADM, which is one of the world’s largest agricultural players, ensuring American farmers access to high-quality American-made potash fertilizer.
The local impact on rural Osceola County is expected to triple the county’s industrial tax base, and Michigan Potash will be paying wages that are 2.5 times higher than the average wages in the county.
Pagano said the facility will be one of the most energy-efficient in the country by utilizing emission-free electricity sources for most of its electricity demand while perpetually recycling approximately 90% of all water within a unique closed loop system, using the earth’s natural geothermal energy. And these advantages will create low-carbon potash and food-grade salt products.
Michigan Potash also opened a community center near the project site to benefit local residents and has engaged with Western Michigan University, Michigan Tech, Ferris State University, Michigan State University, and Central Michigan University to help foster a talented and diverse pool of talent to hire from.
This conditional commitment indicates DOE’s intent to finance the project. But the DOE must complete an environmental review, and the company must satisfy certain technical, legal, environmental, commercial, and financial conditions before the Department can decide whether to enter into definitive financing documents and fund the loan guarantee.
J.P. Morgan is serving as advisor to Michigan Potash.
KEY QUOTES:
“We are truly excited and grateful for the support of the U.S. Department of Energy to help us strengthen our farmers, the noblest of professions. The initial phase of the U.S. Potash Project is just scratching the surface of the full potential of potash in Michigan. This is a win for farmers, for consumers, and for the United States as we strive to reduce our reliance on foreign countries for this critical mineral.”
“We are committed to being good neighbors and partners in the community, improving business and educational opportunities across the region. This project will have many positive benefits that will span generations, and we are grateful to the countless leaders at the federal, state and local levels who share our vision for this one-of-a-kind facility.”
- Ted Pagano, Michigan Potash founder and CEO
“Increasing potash production in Michigan is good for Midwest farmers and American agriculture. We look forward to working with our partners to expand our capabilities to offer cost-effective, domestically produced fertilizer solutions to our customers.”
- Zach Sturm, Director of Fertilizer Procurement with ADM
“We are excited to partner with Michigan Potash on this industry-defining effort, and congratulate the team on receiving a conditional commitment from the Department of Energy’s Loan Programs Office.”
- Christine Kamil, Managing Director and Head of US Public Sector Group with J.P. Morgan
