By Teri Walker–
Rumbling trucks and drill rigs took a small group of landowners east of Holbrook by surprise as they began showing up in the normally quiet neighborhood of River Meadows Ranch over the past year.
Unannounced and unexpected potash mining exploration in full view of homes has been the cause of growing alarm among residents in this remote area, and has had residents clamoring for an understanding of what’s happening in their community.
River Meadows Ranch is a community of about 250 landowners located approximately nine miles east of Petrified Forest National Park, south of Highway 180. According to Community Association President Chris Pearson, there are about 15 families who live at River Meadows full time, several who are part-time residents, and still others who have purchased their roughly 40-, 80- or 120-acre parcels as retirement or investment properties.
Pearson is a part-time resident with a home in Scottsdale, and plans to retire with his wife to River Meadows within the next five years.
River Meadows residents have been seeing drill rigs set up in their vicinity and increased truck traffic, and were shocked to learn one of their landowners had apparently given permission for potash miners to drill an exploration well on his property, a practice directly in conflict with the community’s regulations against commercial use of property.
As they watched the mining exploration activity pick up, but heard no word from mining operators about what was happening in the area, landowners grew frantic and began a series of e-mail chains, phone calls and meetings to try to learn what they’re up against.
Without contact from mining operators, River Meadows residents have worried whether full-scale mining operations were going to crop up in view of their homesteads, ruining their views and dramatically altering their serene way of life. And, they wondered, what would happen to the water table where they live? Would their community well be impacted by mining water use?
Pearson said landowners were distressed to learn, after consulting with lawyers, that their community by-laws didn’t hold a lot of weight after all. If landowners decide they want to sell out to a mining company and let them sink a mine head right in the middle of their community, there’s nothing other landowners can do to stop it, Pearson said.
“If these mines come in right around here, our lifestyle will be totally smashed,” said Pearson in an early interview.
River Meadows Ranch was developed by NZ Legacy, a land and energy development company whose principal is Robert Worsley of SkyMall fame.
NZ Legacy’s website describes the ranch as a “sprawling 28,000-acre wilderness sanctuary located along the upper reaches of the Little Colorado River in the White Mountain (sic) area of northeastern Arizona.” The cool summers, “stunning natural scenery and crystal-clear air” are touted as key selling points for the property, “but privacy, seclusion, freedom of land ownership and laid-back lifestyle are still the main reasons why so many have responded to our large-parcel wilderness ranches here,” the website continues.
Freedom of land ownership is promised to landowners, but like many land purchases, mineral rights didn’t come along with the land as lots were sold over the past several years.
After months of concerns and seeking information, Pearson said landowners have been surprised to learn that their own community developer, NZ Legacy, is involved in the mining exploration in the area, since, Pearson said, the intention to mine near or under the community was not discussed with landowners at the time of purchase or since.
NZ Legacy together with Texas-based Hunt Oil makes up HNZ Potash, which controls 74,000 acres in the Holbrook Basin where potash exploration is taking place, and is the mining company with holdings closest to River Meadows Ranch.
Pearson said landowners were disheartened to discover NZ Legacy had a part in the potential mining operations, and were outraged that neither the developer nor HNZ Potash had contacted them before, or since, mining exploration began.
Pearson was elected by River Meadows Ranch landowners to contact HNZ Potash and learn what was happening in their community. He contacted Paul Schulze with Hunt Oil, and said Schulze responded promptly and agreed to set up a meeting to discuss community concerns.
Schulze, along with Matthew Bob, also of Hunt Oil, sat down with Pearson at his home in Scottsdale last week and answered Pearson’s questions about HNZ’s mining exploration.
Pearson’s conversation with Hunt personnel revealed the first information to come out about what is happening with HNZ Potash holdings in the Holbrook Basin. (In a follow up e-mail to The Tribune-News, Schulze confirmed the following information.)
According to Schulze, HNZ Potash has gathered all of the core samples it needs from its holdings and the company is awaiting results of sample analysis. Upon receipt of the analysis, HNZ will determine whether to proceed with feasibility studies and begin the process of securing the permits required to undertake construction and operation of a potash mine.
The men told Pearson it would be four years or more before a mine would be in full operation.
The Hunt Oil representatives would only speak in general terms about many project elements. Pearson reports the men would not talk about whether they were considering joining with the two other mining companies exploring in the Holbrook Basin: Passport Potash and American West Potash.
He said Schulze and Bob provided “rough guesses” that the mine could take more than $1 billion, and maybe as much as $2 billion, to build. The men wouldn’t estimate the amount of potash HNZ would expect to mine annually.
Pearson said HNZ plans to access water for its mining needs from wells on the 50,000 acres it owns north of Highway 180, across from River Meadows Ranch. Schulze and Bob said the water there is not potable, but is brackish and briny. Pearson said the men pointed out their water usage would be far less than that of area power plants. “They were very clear on that and they are aware that more information about this needs to be made clearer when data on the mine becomes more available as design of the mine starts,” said Pearson.
Schulze and Bob said there is no guarantee that HNZ will start mine development, as they still need to complete a cost analysis and ROI (return on investment) studies after the resource analysis is finished.
If HNZ does decide to move forward, Schulze and Rob envision operations similar to those in Carlsbad, N.M., where underground mining is used to extract potash. When Pearson asked whether the roughly 300 permanent jobs with an average of $70,000 salary, which Passport and American West officials have estimated for their projects, would hold true for HNZ operations, Schulze said the numbers sounded about right for a project of the size being described, but that HNZ is not near the point of discussing specific numbers related to jobs.
Pearson reported that Schulze and Bob said Hunt Oil prides itself on good stewardship of the lands where it operates, that the company is often praised by locals for its land stewardship, and that they would follow that practice in the Holbrook Basin, should they commence operations there.
“They’re so big, and in this day and age after BP and Exxon, I’d imagine they don’t want to stir up a hornet’s nest regarding environmental issues, and that has to be good news for landowners,” said Pearson.
Pearson said between what landowners have heard Passport Potash and American West Potash officials express about their desires to be good neighbors and to have as small a footprint on the land as possible, and what they heard from HNZ Potash, landowner fears are beginning to ease.
While Pearson and other landowners have a lot of unanswered questions, Pearson said there has been some immediate relief generated simply by knowing who they can talk to about their concerns, and the company’s willingness to have a conversation.
“With what we’ve read in the paper about water use in underground mining, and the public statements the other companies have made, along with what Hunt Oil has said, it may not be as bad as we feared.
“The wife and I feel a lot better about it,” said Pearson. “We’ve gone from being fearful of ‘Oh gosh, there goes our retirement paradise,’ to ‘Let’s keep an eye on it.’”
Pearson reported that Schulze and Bob were surprised to learn that Worsley was involved in the development of River Meadows and its homeowners association, and said they were unaware there was a landowner group in existence. They apologized for not meeting with landowners to this point about the project, and promised to keep the association informed of project developments.
Of the meeting, Jeanne Phillips, spokesperson for HNZ Potash, said, “We were pleased to have the opportunity for our team to visit with Mr. Pearson and to address his concerns. We had a constructive conversation, and lots of positive information was exchanged. We agreed to share information as the project progresses, and we look forward to being a good corporate neighbor to the community.”
“I don’t think we can stop it, and I don’t think we’d try to stop it,” said Pearson. “But if we cannot be woken up by ore trains thundering by at two in the morning, and if there’s the potential that we can hardly know they’re there, we could probably live with that,” said Pearson.