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Chaplin sodium plant to receive $220 million investment for facility upgrades

The sodium sulphate plant at Chaplin will be undergoing upgrades to increase its sodium of potash fertilizer production
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Saskatchewan Mining and Minerals

Saskatchewan Mining and Minerals Inc. (SMMI) has announced that it will be supporting a large upgrade project for its sodium sulphate plant located in Chaplin, Sask. to expand the facility’s production to better reflect market needs.

SMMI's sulphate of potash (SOP) fertilizer production upgrade will total $220 million and once completed, will increase the facility’s production to 150,000 metric tonnes of SOP annually.

The project will offer an estimated 360 construction jobs and once completed, the Chaplin plant will have 50 per cent more jobs available. A construction timeline for the project was not provided by SMMI.

SOP is sold to North American and international markets as a high-quality fertilizer and plant nutrition project, and SMMI confirmed that further expansion is planned to increase SOP tonnes and utilize reserves at Ingebrigt Lake.

Sodium sulphate as a stand-alone product has seen a decline in demand, said Energy and Resources Minister Bronwyn Eyre in a press release, while SOP remains in higher demand. Upgrades to the plant will reflect the current focus of the fertilizer production industry.

"This is very exciting news for our province and especially for the community of Chaplin, as this announcement will bring significant immediate and long-term economic benefits," said Lyle Stewart, MLA for Lumsden-Morse, in a press release. "It will protect and create jobs, all the while keeping an important industry in my constituency."

The provincial government voiced its support of the upgrade, conditionally approving the project for two capital investment incentives. 

SMMI's upgrades will qualify for the new Sodium Sulphate Incentive, which provides a 10 per cent credit on capital projects that diversify or improve operating efficiency. 

It is also approved for the Saskatchewan Chemical Fertilizer Incentive, which is a non-refundable, non-transferable 15 per cent tax credit of capital expenditures of $10 million or more spent on new or expanding construction projects at chemical fertilizer facilities.

"The Saskatchewan government clearly understands the immediate and long-term role that rural projects such as ours can play in strengthening and building Saskatchewan's economy as we emerge from the COVID-19 pandemic," said Rodney McCann, president of Saskatchewan Mining and Minerals Inc.

The provincial 2021-22 budget also reduced the royalty rate of sodium sulphate to three per cent, to support the sector through the transition.

The SMMI sodium sulphate facility at Chaplin, located about 85 kilometres west of Moose Jaw on Highway 1, has been in operation for over 70 years.