Saskatchewan Farmers vs the Chinese Government: Which One Is Goliath?

Disclosure: Writing this, I got to know a few of the farmers discussed below, and they got to know me, including what I really do to pay the bills – public relations (sadly, blog-writing is not the financial golden goose you’d think it would be) (sarcasm). We entered into a contract earlier this month wherein I agreed to consult on their public campaign, which began rolling out about two weeks ago. If you missed it, here’s a sample:

Proposed Yancoal potash mine divides Saskatchewan community

Southey, Sask. residents worried about Yancoal’s proposed mine bring concerns to legislature

Opponents of Saskatchewan potash mine take concerns to the legislature

This blog was written before we signed that contract, but I left it in Drafts until now to focus on what I do for a living. I’ve edited it a bit today to reflect more accurate information, and I’ve added additional comments at the end under today’s date.

In September 2011, China-based Yancoal Canada Resources bought eight potash exploration sites near Regina for $110 million. When I say “China-based”, what I mean is it is a wholly-owned subsidiary of Yanzhou Coal Mining Co. Ltd., which is owned by the Chinese government.

I don’t want to be or come off as xenophobic about this issue, so that’s all I’ll say about that. In Saskatchewan we welcome foreign investment, even from the Communist State Council of the People’s Republic of China.

As is normal with a resource project, Yancoal spent the next few years studying, exploring and testing their new sites, during which they eventually identified where they wanted their potash solution mine.

Screenshot (639).png
Two proposed locations for Yancoal potash mine. The area highlighted in orange is the project they settled on, dubbed the Southey Project.

A ‘solution mine’ is a mine that uses water to bring potash to the surface. A number of wells (or mineshafts) are drilled across the mine site, and then are pumped full of water and brine, which dissolves the potash deep underground and brings it up to the surface, where it is processed, evaporated and crystalized.

The first solution mine in Saskatchewan went into production in 1964. Today, companies like Mosaic use the process at their Belle Plaine mine site. K+S’s Legacy project at Bethune, which is supposed to be commissioned this summer, is also a solution mine.

In 2017, Yancoal Canada plan to begin construction on a potash solution mine north of Regina near Strasbourg and Southey (hence the name: Southey Project)… but not if some local residents have anything to do with it.

In early 2014, a land agent began approaching local farmers, asking them if they’d be willing to consider selling their homes and land to Yancoal. Curious, they agreed to review the offer. Three months later the offers were presented – on the condition that each farmer sign a confidentiality agreement.

ProTip: if anyone ever offers to buy your house, never agree not to tell anyone. A fair real estate market depends on openness and transparency to be, well, fair, because the value of your property is largely based on that of your neighbor.

Anyway, (what they now admit was) naively, farmers signed the confidentiality agreement, and then had seven days to respond to Yancoal’s offer on their land, which was quite a bit less than they expected. On that front, these farmers had done their research, pulling land titles information from ISC on what other potash companies had paid Saskatchewan farmers to acquire land for their mines, and it was a lot more than what Yancoal was offering. Would you sell your business for cost?

I’m not going to bore you with land values and comparables – I’ve reviewed the research and its clear the process Yancoal underwent to acquire land was significantly different than that of companies like Western Potash, who worked collectively and transparently with (as opposed to divide-and-conquering) local landowners and made offers that reflected respect for the asset-base farmers would need to give up.

Back at the Southey Project, when residents figured out, on the advice of their lawyers, that the confidentiality clause was likely bogus, they got together in a nearby country church basement to discuss. It was at that meeting that they all realized that Yancoal hadn’t made offers on anyone’s yard sites.

For city slickers like me, a yard site is the section of land that the farmer’s house sits on (also known as the home quarter. I think.)

It’s hard to say what the reason for that would be, but let’s just say that the value of those yard sites will not going to go up if a local mining company is drilling next door. That means if your neighbor sells their farmland next to your yard site to a mining company, it would be a lot easier for that mining company to knock on your door six months later and lowball you for a yard site nobody else would want.

I’m not saying that’s what happened. It’s just what could happen.

It’s worth mentioning that a good chunk of the farm families involved are under the age of 40, and there are 80 kids in the region impacted attending the local elementary school – the future of agriculture in Saskatchewan.

In Spring 2015, when Yancoal was greenlit by the Saskatchewan government to proceed with their Environmental Impact Statement (EIS), the company kicked off broader discussions with residents, including discussions with fifteen area First Nations and Metis communities (which were largely unproductive, as there is no Duty to Consult).

They also held Community Information Sessions in Southey and Strasbourg, where residents got their first look at the actual plan, including the layout of the proposed mine.

Screenshot (638).png
Graphic 1.0 Map of proposed Yancoal Southey Project potash mine.

You’ll note that the entire left half of the proposed site is located in the RM of Longlaketon, while the right half is split between the RM of Touchwood and the RM of Cupar.

Now here’s that map again, with residents’ houses indicated by red dots.

Area Population Map [464039]
Graphic 2.0 Map of Yancoal project. Red dots = homes.
 It was at these sessions that residents learned that Yancoal had acquired enough land, from one family, for their Core Facility.

The area outlined in green marked “Core Facilities Area” is destined for just that, which looks pretty much like any other potash mine in Saskatchewan.

Graphic 3.0 Artist’s rendering of Yancoal’s core facility.

Can you imagine? Walking into a what you believe is an information session, wandering over to a poster board, and seeing a tiny star indicating a massive industrial facility is planned for a few hundred meters from your house.

What’s missing in Graphic 3.0 – a Yancoal rendering depicting an eerily barren adjacent flatland – are those homes and yard sites, which as you’ll note from Graphic 2.0, are clustered around the core facility site, even right across the road. That’s allowed, because the minimum distance between a heavy-industrial site and a country residential dwelling in the RM of Longlaketon is 500 metres.

Compare that to the minimum distance of 2000 metres in the zoning bylaws of other RMs such as Estevan and Spy Hill.

Residents in this close-knit, densely populated community are becoming increasingly divided.

Local business owners reportedly want the potash mine, and have been putting pressure on the RM to ensure the project goes ahead. Farmers in the impacted project area caught wind of this and quit patronizing those local businesses, with some instead of adopting to drive up to an hour to do their shopping.

Despite all the challenges so far, Yancoal has managed to secure (in principle) thirteen quarters of farmland for their well field (the area outlined in purple on Graphic 1.0), which would allow them to begin mining and continue for about a decade. None of the land secured by Yancoal for the well field includes yard sites, and reportedly, none of the people who sold those thirteen quarters live near the project.

So, is there a risk to homes within well field area, beyond the impact on their value?

Subsidence, simply put, means sinking.

According to a report called Long-Term Mine Plan Subsidence Impacts on Hydrology found in Yancoal’s EIS Appendices:

“…maximum gradients are expected to be around 5.0 m per km [1/200 m/m]). In practical terms, this would be similar to a 0.5-m decrease over the length of a football field.”

It continues:

“According to the Canadian Foundation Engineering Manual, structural damage in framed buildings and load-bearing walls may be expected with settlement exceeding 1/250 m/m (0.4%) or 4m per km (CGS 2006).”

Allow me to pretend I’m an engineer and pitifully attempt to explain what that means. Basically, if drilling all those wells causes the ground to drop/shift/move 4 metres per kilometer, any houses or buildings in the area will likely be damaged. The maximum shift predicted for the Yancoal project is 5 metres per kilometer.

subsidence with wells and homes
Graphic 4.0 Red dots = homes. Black squares = estimated location of well heads.

Graphic 4.0 just depicts the west side of the well field, where the steepest subsidence is supposed to occur. There are seven homes in this region.

Subsidence also has the potential to significantly change drainage on the well field area. As we know, waterlogged fields have been a bit of an issue in Southern Saskatchewan over the last few years. Remember, so far Yancoal has only secured thirteen quarters on this well field, but there are 59 quarters in total. That’s a lot of pissed off farmers with soaking wet crops.

In the EIS, the issue of subsidence is qualified with the caveat that maximum sinking wouldn’t be complete for 250 years, however the report doesn’t define how it would progress over those 250 years.

But other reports, prepared for other mining companies, do.

potash one subsidence
Graphic 4.0 Timeline of predicted subsidence from a Potash One EIS

Graphic 4.0 was taken from a EIS prepared for Potash One’s proposed Legacy project at Bethune (which was eventually bought out by K+S). It also shows potential slumping over 250 years, but also reveals that slumping starts to occur at the beginning phases of mining – it starts quickly and moves the quickest in the first 50 years.

So we’re talking about the homes that are there, right now, that people are living in, even hoping their children will live in.

Potash One’s EIS also identifies the actual number of homes in their subsidence zone, and declares their intention to purchase these homes.

Screenshot (642)
Graphic 5.0 Potash One’s EIS declaring intent to purchase homes within Legacy project’s subsidence zone.

Environmental Impact Statements from Vale and Western Potash, dated 2013, also indicated those companies intentions to obtain all property in their well field area, not just cherry-picked properties, so people would not be expected to live in the middle of a potash mine.

By the way, here’s what the proposed Yancoal well field layout is purported to look like:

yancoal layout

Again, not an engineer, but can’t see how that leaving that center untouched is going to help with the sinking around the outside. Again, other solution potash mines in Saskatchewan do it differently, with more uniform distribution of wells across their fields.

It is disappointing how our Provincial Government has unloaded the responsibility of negotiating a project worth $4 billion dollars, run by a Chinese state-owned company, onto local RM councils (the are a number of RMs dealing with this, with varying perspectives) comprised of seven members, predominantly farmers with no qualifications in this area.

The premise of resource mining is that it benefits the entire province, so shouldn’t the province provide better supports for small, unqualified group of people pitted against multi-billion dollar multinationals?

June 19, 2016

Have new mining projects gone up successfully in other communities? You bet. Companies like K+S and BHP Billiton* have proven themselves corporate champions in rural-industrial development by dealing with locals transparently and fairly, without attempting to force any of them to try and live and work in the middle of a minefield.

Is this about money? Based on my experience with this group, not anymore.

I mean, if someone came to you and said, “I want to buy your home and your business so I can build mine, but I’m not even going to pay you enough to relocate and open your business somewhere else, never mind the cash lift you deserve for doing me this favor”… what would you tell them?

That ship has sailed, however. Throughout this process this community has come to an even deeper understanding of why they are committed to their land, and to each other. It has reinforced their desire (many of them third and fourth generation farmers on their land) to be part of Saskatchewan’s agriculture economy, which is supposedly an important part of our non-resource-dependent, diversified economy. They want Yancoal to relocate their mine to a less-densely populated, less-agriculturally-productive region elsewhere.

The talk-radio response to this position was classic.

“Sounds like the Old Saskatchewan!” lamented Ron from Weyburn.

This pat response, which I’ve heard so many times over the last few years, bugs me so hard. If anyone dares question the province on mega-spending or mega-development, the so-called right wing immediately throws that person into the middle of an arena, turns on the spotlight and commences stoning.

“Old Saskatchewan – for shame!” they shout.

Guess what fools? That’s what conservatives do – question the government!!

Anyway, if the philosophy of the New Saskatchewan is “Indiscriminately Rip Out Our Resources With No Plan Whatsoever So We Can Get the Cash Now and At the Expense of Whoever Is in the Way”, do I want to be part of the New Saskatchewan?

Back to talk radio: “A classic case of NIMBY,” condescended Shirley from Asquith, gazing out her kitchen window at her blessedly tranquil, industrial-free backyard.

Can we be clear on what NIMBY is, Shirley? In one Saskatchewan city, when an already zoned and established place of Christian worship was sold to a Muslim group to become their mosque, surrounding homeowners lost their shit.

THAT is a case of Not In My BackYard.

When somebody wants to literally take your backyard, and you have an issue with that?

That is not NIMBY.

That is WTF.

This piece is long enough, without getting into the pile of other questions this project raises.

What guarantees are in place to ensure the government of China does not legislate back home that all potash imported into their country must be purchased through the state-owned Yancoal? China, including the government of China, is one of the biggest consumers of a resource that is exported by our already existing, long-time provincial corporate citizens like Potash Corp.

That existing supplier-client relationship is also the reason I suspect we haven’t heard anything from those potash corporations, who surely must be wondering why we’re letting one of our biggest customers set up shop to produce the commodity themselves.

What of the impact on the water supply? Yancoal’s Southey project will draw roughly half the amount of freshwater from Buffalo Pound as does the City of Regina, or equivalent to the City of Moose Jaw, on a daily basis. (for the record I am not on contract with longtime Saskatchewan environmental activist Jim Harding, who I disagree with on many issues, but his group has raised a number of questions on Yancoal’s proposed water use.)

What of the wetlands and native prairie sites that this thing will plough through? It blows my mind that ######## (Edit – I took this line out because the number of you who thought this was you is INCREDIBLE. None of you are remotely important enough to even consider meriting a mention here; I’m not going to leave this here to give you the satisfaction of thinking so – so stop spamming me and get. over. yourselves.)

So, Saskatchewan, who do we want to be when we grow up?

“Alberta!” has been the response for the last decade, because we refuse to admit it, but we are absolutely not over our inferiority complex.

Well guess what. Alberta today is a dumpster fire – busted broke, with residents running over effigies of their Premier with golf carts for sport.

Yes, there are historical traits that we would like to keep in the provincial rearview mirror: Mouseland; Devine’s gong show spending; Lorne Calvert’s ridiculous aversion to the coal that keeps us from freezing to death eight months a year, but with no real plan to replace it. To name a few.

But the traits of hard work, prudence, respect and pioneering – whether the land, our universities, or new technology…we want to keep those. We give our past selves far too little credit, in my opinion.

Fundamentally, how does Saskatchewan want to be defined in the 21st century? When the worlds of agriculture and resource mining are at loggerheads like this, the government’s response will play a key role in the answer.

*We’re going to need to talk about Jansen soon.


2 thoughts on “Saskatchewan Farmers vs the Chinese Government: Which One Is Goliath?

Add yours

  1. What can you do ? Sounds like you were sold out by your own government.

    What is different between this development and k+s mine currently being built.

    If this mine is going ahead anyway, what’s to say the government brings in temporary foreign workers to build and operate.


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