What changed in this filing

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Item 1. Business

2023-03-07 compared with 2022-03-08 · 141 added, 179 removed, 304 unchanged (51% of the section changed)

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We also provide water, magnesium chloride, brine and various oilfield products and services.

Our extraction and production operations are conducted entirely in the continental United States.

Our extraction and production operations are conducted entirely in the continental U.S.

We produce potash from three solution mining facilities:

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potassium consumption.

Substantially all of our potash is sold in the United States, and many of our potash sales are geographically concentrated in the central and western United States.

Substantially all of our potash is sold in the U.S., and many of our potash sales are geographically concentrated in the central and western U.S.

Fertilizer sales are affected by weather and planting conditions in these regions, as well as farmer economics.

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We have permitted, licensed, declared and partially adjudicated water rights in New Mexico under which we sell water primarily for industrial uses in the oil and gas services industry.

We also offer potassium chloride ("KCl") real-time mixing services on location for hydraulic fracturing operations and trucking services.

In May 2019, we acquired certain land, water rights, state grazing leases for cattle, and other related assets from Dinwiddie Cattle Company that support oil and gas development in the Permian Basin in southeast New Mexico.

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We refer to these assets and operations as "Intrepid South." Due to the strategic location of Intrepid South, part of our long-term operating strategy is selling small parcels of land, including restricted use agreements of surface or subsurface rights, to customers, where such sales provide a solution to a customer's operations in the oil and gas industry.

We sell water on Intrepid South under a joint marketing agreement with NGL Energy Partners, a land and water rights owner adjacent to our South property.

Under this agreement, we are responsible for the marketing, sale, and delivery of water to various customers across our combined acreage.

Demand for water and other oilfield related products and services is due to oil and gas activity and development in southeast New Mexico.

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Sales of byproducts are accounted for within the segment that produced the byproduct.

In each of the last three years, the majority of our byproduct sales were accounted for in the potash segment.

In each of the last three years, the potash segment accounted for the majority of our byproduct sales.

Production Facilities

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Therefore, as with other producers in our industry, our production results tend to be lower than reported productive capacity.

We also have pipelines and ponds that we use to deliver water to customers.

We also have water pipelines and reservoir ponds that we use to deliver water to our New Mexico facilities and to customers.

As mentioned above, we acquired Intrepid South in May 2019 which increased our water rights and water delivery infrastructure.

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There are no known substitutes for these nutrients.

A proper balance of each of the three nutrients is necessary to maximize their effectiveness.

A proper balance of each of the three nutrients is necessary to maximize their effectiveness in crop growth.

Potassium helps regulate plants' physiological functions and improves plant durability, providing crops with protection from drought, disease, parasites, and cold weather.

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Intrepid's Trio ® product contains the primary nutrient potassium and two secondary nutrients, sulfur and magnesium.

Long-term global fertilizer demand has historically been driven primarily by population growth and global economic conditions with annual demand variations based on planted acreage, agricultural commodity yields and prices, inventories of grains and oilseeds, application rates of fertilizer, weather patterns, and farm sector income.

Long-term global fertilizer demand has historically been driven by population growth and global economic conditions with annual demand variations based on planted acreage, agricultural commodity yields and prices, inventories of grains and oilseeds, application rates of fertilizer, weather patterns, and farm sector income.

We expect these key variables to continue to have an impact on global fertilizer demand for the foreseeable future.

Sustained per capita income growth and agricultural policies in the developing world also affect global demand for fertilizer.

Fertilizer demand is affected by other geopolitical factors such as temporary disruptions in fertilizer trade related to government intervention and changes in the buying patterns of key consuming countries.

Volatility in agricultural commodity prices also may impact farmer fertilizer buying decisions.

The world potash market has long been characterized by nameplate production capacities that exceed demand.

A significant portion of this capacity is controlled by a few companies and this concentration increased in early 2018 with the merger of two Canadian producers.

Historically, these larger producers have managed production levels to approximate world demand.

Several international brownfield and greenfield expansions have also begun production, with increases in production rates expected over the next few years.

Due to the increased production, near-term potash pricing will likely depend on the larger producers' ability to continue to manage this supply and demand balance through decreased utilization rates.

Nameplate production capacities that exceed demand have historically shaped the world potash market.

A few potash companies have controlled a significant portion of this capacity, which was magnified in early 2018 with the merger of two Canadian producers.

Generally, these larger producers have managed production levels to approximate world demand.

Several international brownfield and greenfield expansions have also begun potash production, with increases in production rates expected over the next few years.

Sanctions on Belarusian potash and Russia's invasion of Ukraine resulted in a significant decrease in global production and uncertainty of planned expansion projects in Russia.

Production is expected to remain below 2021 levels in 2023 and possibly longer.

As planned expansions come online in future years, potash pricing will likely depend on the larger producers' ability to continue to manage the supply and demand balance through decreased utilization rates.

Increases in world fertilizer demand, due mainly to population growth and limitations on arable land, are expected to eventually lessen the burden on producers, although recent increases in productive capacities and the continued progress of key expansion projects, specifically BHP's approval of the Jansen Stage 1 potash project, add additional uncertainty to the long-term supply and demand balance for the potash market.

The United States potash market is also impacted by the volume of imports.

A change in the volume of imports could result in a material change to potash prices in the United States.

Sanctions were recently announced on Belarusian potash imports and are expected to take effect in April 2022.

Belarusian potash has historically accounted for approximately 7% of annual demand in the United States.

We expect other suppliers will increase their volume of imports in response to the sanctions although timing of these changes and the overall effect of the sanctions on the potash market are uncertain.

The volume of imports to the U.S.

further impacts the potash market.

A change in the volume of imports could result in a material change to potash prices in the U.S.

imposed sanctions on Belarusian potash imports, which took effect in April 2022.

Belarusian potash historically accounted for approximately 7% of annual demand in the U.S.

In response to these sanctions, other foreign suppliers increased the volume of potash imports to the U.S.

The overall effect of these sanctions on the potash market remains uncertain.

Virtually all of the world's potash is currently extracted from 20 commercial deposits.

According to the International Fertilizer Industry Association and data published by potash mining companies, six countries accounted for approximately 88% of the world's aggregate potash production during 2020.

During this time period, the top nine potash producers supplied approximately 96% of world production.

Two major Canadian producers participate in the Canpotex marketing group that supplied approximately 29% of the global potash production in 2020, one producer in Russia supplied approximately 16% of global potash production in 2020 and one producer in Belarus supplied approximately 15% of the global potash production in 2020.

Another Russian producer is currently undertaking a significant increase in potash production.

If this producer achieves its goals, it could grow from approximately 2% of global potash production in 2020 to approximately 6% in the next few years.

Hydraulically fractured horizontal wells account for the majority of oil and gas wells drilled in the United States today and are responsible for the record amount of fossil fuels produced in the United States in recent years.

According to S&P Global Commodity Insights and data published by potash mining companies, six countries accounted for approximately 91% of the world's aggregate potash production during 2022.

During the same period, the top nine country potash producers supplied approximately 97% of world production.

Two major Canadian producers participate in the Canpotex marketing group that supplied approximately 35% of global potash production in 2022.

Owing to sanctions directed at potash production in Belarus, S&P Global Commodity Insights estimates that Belarus accounted for 6% of global production in 2022, compared to 17% in the prior year, while they estimate that Russia accounted for 21% of global production in both 2021 and 2022.

Hydraulically fractured horizontal wells account for the majority of oil and gas wells drilled in the U.S.

today and are responsible for the record amount of fossil fuels produced in the U.S.

in recent years.

The use of horizontal drilling in oil and gas production allows a well to remain in contact with the targeted formation, increasing production compared to a vertically drilled well.

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The majority of water used in fracking is transported by pipeline to the frac site, where it is stored in ponds or storage tanks.

While fresh water remains a key input for many fracs, some operators have switched to using exclusively recycled water or a combination of fresh water and recycled water when completing wells.

While fresh water remains a key input for many fracs, some operators have switched to using exclusively recycled/produced water or a combination of fresh water and recycled/produced water when completing wells.

We believe this change is due to the growing focus on environmentally friendly operations and a response to the large amounts of produced water that is present in certain basins and formations, such as the Delaware Basin in southeast New Mexico.

By recycling and reusing produced water, operators are able to reduce fresh water purchases and decrease the cost of transporting and disposing of produced water into disposal wells.

The most productive region in the United States for oil production is the Permian Basin, which spans from west Texas to southeastern New Mexico.

The most productive region in the U.S.

for oil production is the Permian Basin, which spans from west Texas to southeastern New Mexico.

As of January 2023, the Permian Basin produced approximately 5.6 million barrels of oil per day.

For comparison, the next most productive region in the United States produced approximately 1.2 million barrels of oil per day.

For comparison, the next most productive region in the U.S.

produced approximately 1.2 million barrels of oil per day.

In addition to producing wells, the Permian Basin also had approximately 1,100 drilled but uncompleted wells as of December 2022.

Competition and Competitive Strategy

We sell into commodity markets and compete based on delivered price, our ability to deliver product in a timely manner, and product quality.

We sell our potash and Trio ® into commodity markets and compete based on delivered price, our ability to timely deliver product, and product quality.

We also compete based on the durability, particle size, and potassium oxide content of our potash and Trio ® products.

For potash, we compete primarily with much larger potash producers, principally Canadian producers and, to a lesser extent, producers located in Russia, Belarus, Chile, Germany, and Israel.

For potash, we compete with larger Canadian potash producers and, to a lesser extent, producers located in Russia, Belarus, Chile, Germany, and Israel.

For Trio ® , we compete with one other producer of langbeinite as well as producers of other specialty nutrients and blended products.

For water, we compete primarily with water-specialty companies, farmers, and ranchers operating in or near the Permian Basin in New Mexico.

The competitive market for our water resources include other water right holders, which include companies, farmers, and ranchers operating in or near the Permian Basin in New Mexico.

Some of our competitors and potential competitors may have significant advantages over us, including greater name recognition, longer operating histories, pre-existing relationships with current or potential customers, significantly greater financial, marketing and other resources, ownership of more diverse assets and products, geographically and/or access to less expensive mining assets, any of which could allow them to respond more quickly to new or changing opportunities.

Our competitive strategy is focused on the following:

• Maximize potash gross margin and optimize potash production.

• Maximizing potash gross margin and optimizing potash production.

All of our potash production comes from solar solution mines, which carry fewer fixed costs than our conventional potash mines.

Our per-ton costs are lower for solution mining than conventional mining as solar solution mining requires less labor, energy, and equipment.

In addition, we have the advantage of being located close to the markets we serve, and the North American market is significantly larger than our production capacity.

As a result, we are able to selectively participate in the markets that we believe will provide the highest average net realized sales price per ton.

We also attempt to maximize our gross margin by leveraging our freight advantage to key geographies, our diverse customer and market base, and our flexible marketing approach.

Long-term, we have optimization and expansion opportunities at our solution mining facilities, that, over time, could further reduce our per-ton costs and increase our potash production.

• Expand Trio ® sales and maximize gross margin.

We plan to continue to expand our sales and marketing efforts for Trio ® in domestic markets and select international markets.

Additionally, the North American market is significantly larger than our production capacity and we are advantageously located close to the markets we serve.

Therefore, we are able to selectively participate in the markets that we believe will provide the highest average net realized sales price per ton.

We also attempt to leverage our freight advantage to key geographies, our diverse customer and market base, and our flexible marketing approach to maximize our gross margin.

We have optimization and expansion opportunities at our solution mining facilities, that, over time, could further reduce our per-ton costs and increase our potash production.

• Expanding Trio ® sales and maximizing gross margin.

We plan to continue expansion of our sales and marketing efforts for Trio ® in domestic markets and select international markets.

Our efforts include continued crop nutrition education and increased marketing efforts targeting organic agriculture and high-value specialty crop markets.

In order to maximize gross margin, we are working to optimize our production process to produce more granular-sized product, which is preferred by most markets.

To maximize gross margin, we are working to optimize our production process to produce more granular-sized product, which is preferred by most markets.

We currently operate our Trio ® facility at a reduced production level and expect to continue to do so for the foreseeable future.

• Expand offerings of oilfield solutions.

We intend to continue working to expand sales of water, particularly to service the oil and gas markets near our operating plants in New Mexico.

We have a meaningful amount of water rights under which we sell water primarily for industrial uses such as in the oil and gas services industry.

In addition, as described above, in May 2019, we acquired certain land, water rights, state grazing leases for cattle, and other related assets from Dinwiddie Cattle Company in the Permian Basin which we operate as Intrepid South.

We expect to increase the amount of water available for sale on the Intrepid South property over the next few years through additional infrastructure investments and permitting.

Our other oilfield related products and service offerings include, but are not limited to, caliche, right-of-way agreements, surface damages and easements, and a produced water royalty.

With an increasing focus on environmentally friendly operations and due to the large amounts of produced water in the Delaware Basin, operators are using increasing amounts of recycled water when completing wells.

We acquired multiple recycle units in the second half of 2021 and have begun hiring employees with the plan to enter the recycled water market in 2022.

In 2020, we sold approximately 320 acres of our fee land on Intrepid South to an oil and gas operator, which only allows the buyer to drill Acid Gas Injection ("AGI") wells on the property to dispose of natural gas with high concentrations of hydrogen sulfide ("H 2 S").

Due to the strategic location of Intrepid South, part of our long-term operating strategy is selling small parcels of land, including restricted use agreements of surface or subsurface rights, to customers, where such sales provide a solution to a customer's operations in the oil and gas industry.

• Continue diversification of products and services.

• Expanding offerings of oilfield solutions.

We intend to continue expansion of water sales, particularly to service the oil and gas markets near our operating plants in New Mexico.

We have water rights that we sell water for commercial uses in the oil and gas services industry.

Additionally, as described above, in May 2019, we acquired certain land, water rights, state grazing leases for cattle, and other related assets from Dinwiddie Cattle Company in the Permian Basin which we operate as Intrepid South.

We expect to increase the amount of water available for sale on the Intrepid South property over the next few years through additional infrastructure investments.

Our other oilfield related products and services include, but are not limited to, caliche, right-of-way agreements, and a produced water royalty.

The heightened focus on environmentally friendly operations and due to the large amounts of produced water in the Delaware Basin, operators are using increasing amounts of recycled and produced water when completing wells.

We may expand our current oilfield solutions products and services to include water recycling.

Given the location of Intrepid South, part of our long-term operating strategy is selling small parcels of land, including through the use of restricted use agreements for surface or subsurface rights, to customers.

• Continuing diversification of products and services.

We recover magnesium chloride, salt, brines, and water during the production of potash and Trio ® .

These byproducts offer additional diversity to our portfolio of product and service offerings.

As we continue to look for opportunities to diversify our revenue sources, we may enter into new or complementary businesses that expand our product and service offerings.

We may also expand into oil and natural gas exploration and production, or into new products or services in our current industry or other industries.

These byproducts diversity our portfolio of product and service offerings.

As we continue to explore and evaluate opportunities to diversify our revenue sources, we may enter into new or complementary businesses that expand our product and service offerings, including an expansion into oil and natural gas exploration and production, or into new products or services in our current industry or other industries.

Competitive Strengths

• U.S.-based producer.

We are the only producer of potash in the United States.

We are the only producer of potash in the U.S.

We are located in a market that consumes significantly more potash than we can currently produce on an annual basis.

Our geographic location provides us with a transportation advantage over our competitors for shipping our product to our customers.

Our geographic location provides us with a transportation advantage over our competitors for shipping our product to customers.

In general, this allows us to obtain a higher average net realized sales price per ton than our competitors, who must ship their products across longer distances to consuming markets, which increases their costs and reduces their gross margin.

Our location allows us to target sales to the markets in which we have the greatest transportation advantage, maximizing our average net realized sales price per ton.

Our access to strategic rail destination points and our location along major agricultural trucking routes also support this advantage.

Our access to strategic rail destination points and our location along major agricultural trucking routes also supports this advantage.

producer, we enjoy a significantly lower total production tax and royalty burden than our principal competitors, which operate primarily in Saskatchewan, Canada.

The Saskatchewan tax system for potash producers includes a capital tax and several potash mineral taxes, none of which are imposed on us as a U.S.

We currently pay an average royalty rate of approximately 4.7% of our potash and Trio ® sales less their related freight costs, which compares favorably to that of our competitors in Canada.

We currently pay an average royalty rate of approximately 4.7% for our potash and Trio ® sales less their related freight costs, which compares favorably to that of our competitors in Canada.

The relative tax and royalty advantage for U.S.

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Given the greater scarcity of langbeinite relative to potash and its agronomic suitability for certain soils and crops, we believe there is a market for Trio ® outside of our core potash markets.

We also believe that there is a market for Trio ® beyond the United States, although freight expense and competition from substitute products have made this a difficult market to penetrate.

We also offer Organic

Materials Review Institute ("OMRI") listed organic potash and Trio ® products that provide essential minerals for growing certified organic crops.

We also believe that there is a market for Trio ® beyond the U.S., although freight expense and competition from substitute products have made this a difficult market to penetrate.

We also offer Organic Materials Review Institute ("OMRI") listed potash and Trio ® products that provide essential minerals for growing certified organic crops.

Thr ough our existing operations and assets, we also have the potential to grow our offerings of salt, water, and brine with low capital investments.

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The validity of water rights are ultimately confirmed or denied by courts in an adjudication process.

We have permitted, licensed, declared and partially adjudicated water rights in New Mexico under which we sell water primarily for industrial uses such as in the oil and gas services industry.

We have permitted, licensed, declared and partially adjudicated water rights in New Mexico under which we sell water primarily for commercial uses in the oil and gas services industry.

We continue to work to expand sales of water, especially to support oil and gas development in the Permian Basin near our Carlsbad facilities.

The Intrepid South property increased our total water rights available for sale and our footprint in and around the Delaware Basin, a sub-basin of the Permian Basin.

We continue working to permit additional water rights on the Intrepid South property.

The Intrepid South property increased the total water rights available for sale in and around the Delaware Basin, a sub-basin of the Permian Basin.

This has expanded our relationships with oil and gas producers, which we may be able to use to expand sales of our industrial potash products, byproducts, and services.

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We sell potash into three different markets—the agricultural, industrial, and feed markets.

During 2021, these markets represented approximately 78%, 6%, and 16% of our 2021 potash sales, respectively, and during 2020, these markets represented approximately 79%, 3%, and 18%, of our 2020 potash sales, respectively.

During 2022, these markets represented approximately 69%, 8%, and 23% of potash sales, respectively, and during 2021, these markets represented approximately 78%, 6%, and 16%, of our potash sales, respectively.

The agricultural market supplies farmers producing a wide range of crops in different geographies.

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• Significant reserve life.

Our potash and langbeinite reserves each have substantial years of reserve life, with remaining reserve lives for our actively mined areas ranging from approximately 24 years to more than 100 years, based on proven and probable reserve estimates.

In addition to our reserves, we have water rights and access to additional mineralized areas of potash for potential future exploitation.

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We also have the ability to expand our business using existing installed infrastructure, in less time and with lower expenditures than would be required to construct entirely new mines.

The sales pattern for potash sold into the agricultural market is seasonal.

Over the last three years, our monthly potash sales volume has been highest in February through May and September through November when purchasers are looking to have product on hand in advance of the spring and fall application seasons in the United States.

The month-to-month seasonality of our agricultural sales is somewhat moderated due to the variety of crops, industries, distribution strategies, and geographies that we serve.

There is a seasonal sales pattern for potash sold into the agricultural market.

In turn, our monthly potash sales volume has been the lowest in June, July and December.

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The sales pattern for Trio ® sold into the domestic agricultural market is also seasonal.

Over the last three years, our domestic Trio ® sales volume has been highest in March and April, as Trio ® products are typically applied to crops in the United

States during the spring planting season.

Over the last three years, our domestic Trio ® sales volume has been highest in March and April, as Trio ® products are typically applied to crops in the U.S.

during the spring planting season.

Demand for the spring planting season generally runs from December to May, during which we have sold approximately 60% of our domestic Trio ® volumes over the past three years.

As we expand our Trio ® sales efforts outside of the United States, we expect the overall seasonality of our Trio ® sales to be impacted by the timing of deliveries to warehouses as we generally ship in larger volumes to minimize per ton transportation costs.

The month-to-month seasonality of our agricultural sales is somewhat moderated due to the variety of crops, industries, distribution strategies, and geographies that we serve.

We observed fertilizer dealers in North America instituting practices that are designed to reduce the risk of changes in the price of fertilizer products through consignment-type programs.

These programs tend to make the timing of the spring and fall seasonal demand profile less predictable within the season.

Further, through technological advances, farmers in the U.S.

are more efficient in planting and harvesting their crops, which has compressed the application seasons.

Our quarterly and yearly financial results can also vary from one year to the next due to weather‑related shifts in planting schedules and purchasing patterns.

Because all of our potash production comes from our solar solution mines, our potash production is also seasonal.

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The seasonality of fertilizer demand results in our sales volumes being the highest during the spring and our working capital requirements being the highest just before the start of the spring season.

We have observed fertilizer dealers in North America instituting practices that are designed to reduce their risk of changes in the price of fertilizer products through consignment-type programs.

These programs tend to make the timing of the spring and fall seasonal demand profile less predictable within the season.

Further, through technological advances, the farmers in the United States have gained efficiencies in planting and harvesting their crops, which has compressed the application seasons.

Our quarterly financial results can also vary from one year to the next due to weather‑related shifts in planting schedules and purchasing patterns.

Demand for our oilfield products and services is highly correlated to oil and gas exploration activities and can vary from quarter to quarter.

Demand for our oilfield products and services is highly correlated to oil and gas exploration activities and can vary from quarter to quarter and year to year.

Major Customers

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For water, we sell to a diverse set of customers through a combination of spot sales and multi-year contracts.

In 2022, we had one customer, Bill Barr & Company, Inc., which accounted for more than 10% of our total consolidated revenues.

In each of 2021 and 2021, no customer accounted for more than 10% of our total sales.

Environmental, Safety, and Health Matters

We are subject to an evolving set of federal, state, and local environmental, safety, and health laws that regulate, among other things;

We are subject to an federal, state, and local environmental, safety, and health laws that regulate, among other things;

(1) soil, air, and water quality standards for our facilities;

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We employ and consult with professionals who assist in monitoring our compliance with these laws and who work with management to ensure that appropriate strategies and processes are in place to promote a culture that prioritizes safety and environmental responsibility.

In 2021, we had approximately $0.3 million of capital investments, and $1.4 million in other expenses, relating to environmental compliance, environmental studies, and remediation efforts.

In 2022, we had approximately $2.1 million of capital investments and reclamation, and $1.0 million in other expenses, relating to environmental compliance, environmental studies, and remediation efforts.

We expect to spend $3.0 million to $5.0 million for environmental related capital and reclamation projects in both 2023 and 2024.

Future capital expenditures are subject to a number of uncertainties, including changes to environmental regulations and interpretations, and enforcement initiatives.

If potential negative effects to the environment are discovered, or if the potential negative effects are of a greater magnitude than currently estimated, material expenditures could be required in the future to remediate the identified effects.

We expect that continued emphasis on environmental issues will result in increased future investments for environmental controls at our operations.

Future capital expenditures are subject to uncertainties, including changes to environmental laws.

Material expenditures could be required in the future to fulfill environmental compliance requirements, either new or existing.

We anticipate a focus on environmental issues will result in increased future investments for environmental controls at our operations.

Risk Factors “Risks Related to Our Business - Environmental laws and regulations could subject us to significant liability and require us to incur additional costs.”

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state and foreign country where products are sold.

Each brand and grade of commercial fertilizer must be registered with the appropriate state agency before being offered for sale, sold, or distributed in that jurisdiction.

Each brand and grade of commercial fertilizer must be registered appropriately before being offered for sale, sold, or distributed.

In most cases, these product registrations impose specific requirements relating to guaranteed analysis, product labeling, and regular reporting of sales.

Some states require similar registration and reporting for feed grade products.

states require similar registration and reporting for feed grade products.

Industrial-grade products typically do not require registration or reporting.

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We are subject to numerous environmental laws and regulations, including laws and regulations regarding land use and reclamation;

release of emissions to the atmosphere or water;

plant and animal life;

release of emissions to the atmosphere;

release of contaminants to water;

preservation of plant and animal life;

and the generation, treatment, storage, disposal, and handling of hazardous substances and wastes.

These laws include the Clean Air Act;

the Clean Water Act;

These laws include the Clean Air Act ("CAA");

the Clean Water Act ("CWA");

the Resource Conservation and Recovery Act;

the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA");

the Toxic Substances Control Act;

the Toxic Substances Control Act ("TSCA");

and various other federal, state, and local laws and regulations.

Violations can result in substantial penalties, court orders to install pollution‑control equipment, civil and criminal sanctions, permit revocations, and facility shutdowns.

In addition, environmental laws and regulations may impose joint and several liability, without regard to fault, for cleanup costs on potentially responsible parties who have released, disposed of, or arranged for release or disposal of hazardous substances in the environment.

Environmental laws and regulations may impose joint and several liability, without regard to fault, for cleanup costs on potentially responsible parties who have released, disposed of, or arranged for release or disposal of hazardous substances in the environment.

We hold numerous environmental, mining, and other permits or approvals authorizing operations at each of our facilities.

Our operations are subject to permits for, among other things, extraction of salt and brine, discharges of process materials and waste to air and surface water, injection of brine, and appropriation of water.

Our operations are subject to permits for, among other things, extraction of salt and brine, discharges of process materials and waste to air and water, injection of brine, and appropriation of water.

Some of our proposed activities may require waste storage permits.

A decision by a government agency to deny or delay issuing a new or renewed permit or approval, or to revoke or substantially modify an existing permit or approval, could limit or prevent us from mining at these properties.

A decision by a government agency to deny or delay issuing a new, modified, or renewed permit or approval, or to revoke or substantially modify an existing permit or approval, could limit or prevent us from mining at these properties.

In addition, changes to environmental and mining regulations or permit requirements could limit our ability to continue operations at the affected facility.

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In 2016, the OSE determined that our East tailing impoundment embankments are considered jurisdictional dams.

We continue to work with the OSE to determine required dam modifications associated with this determination.

We continue to work with the Dam Safety Bureau to determine the hazard level of our dams and the OSE to determine required dam modifications associated with this determination.

We may be required to spend a significant amount of capital to bring the impoundments into compliance with requirements for jurisdictional dams or modify our operations to no longer use impoundments that may qualify as jurisdictional dams.

From time to time, we have received notices from governmental agencies that we are not in compliance with certain environmental laws, regulations, permits, or approvals.

Occasionally governmental agencies notify us of noncompliance with certain environmental laws, regulations, permits, or approvals.

For example, although designated as zero discharge facilities under the applicable water quality laws and regulations, our East, North, and Moab facilities at times may experience some water and brine discharges during periods of significant rainfall or due to other circumstances.

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Safety and Health Regulation and Programs

Certain of our facilities are subject to the Federal Mine Safety and Health Act of 1977, the Occupational Safety and Health Act, related state statutes and regulations, or a combination of these laws.

The Mine Safety and Health Administration ("MSHA") is the governing agency for our conventional underground mines and related surface facilities in New Mexico.

As required by MSHA, these operations are regularly inspected by MSHA personnel.

Item 4 and Exhibit 95.1 to this Annual Report on Form 10-K provide information concerning certain mine safety violations.

Our New Mexico facilities participate in MSHA's Region 8 "Partnership Program." There is a formally signed document and plan, pursuant to which each party commits to specific actions and behaviors.

Examples of principles include working for an open, cooperative environment;

agreeing to citation and conflict processes;

and improving training.

Our New Mexico facilities are serviced by a trained mine rescue team, which is ready to respond to on-site incidents or assist in local

incidents, if needed.

The team practices and participates at state and federal events and competitions.

In addition, our New Mexico facilities participate in a basin agreement with other natural resource and hazardous waste facilities to provide mine rescue support.

The Occupational Safety and Health Administration ("OSHA") is the governing agency relating to the safety standards at our Utah facilities, as well as our HB mine and plant.

Training and other certifications are provided to employees as needed based upon their work duties.

Some of our facilities are subject to the Federal Mine Safety and Health Act of 1977 ("MSHA"), the Occupational Safety and Health Act ("OSHA"), related state statutes and regulations, or a combination of these laws.

Our conventional underground mines and related surface facilities in New Mexico are subject to MSHA jurisdiction.

In accordance with MSHA, these facilities are regularly inspected by MSHA personnel.

Item 4 and Exhibit 95.1 to this Annual Report provide information concerning certain mine safety violations.

As part of our ongoing safety programs, we collaborate with MSHA and the New Mexico Bureau of Mine Safety to identify and implement accident prevention techniques and practices.

A trained mine rescue team services our New Mexico facilities.

This team is ready to respond to on-site incidents or assist in local incidents, if needed.

In addition, our New Mexico

facilities participate in a basin agreement with other natural resource and hazardous waste facilities to provide mine rescue support.

Our Utah and our HB mine and plant are subject to OSHA jurisdiction.

We provide all OSHA required training and other certifications to our employees at these facilities.

Remediation at Intrepid Facilities

Many of our current facilities have been in operation for a number of years.

Operations by us and our predecessors have involved the historical use and handling of potash, salt, related potash and salt byproducts, process tailings, hydrocarbons and other regulated substances.

Our and our predecessors' operations involved the historical use and handling of potash, salt, related potash and salt byproducts, process tailings, hydrocarbons and other regulated substances.

Some of these operations resulted, or may have resulted, in soil, surface water, or groundwater contamination.

At some locations, there are areas where process waste, building materials (including asbestos‑containing transite), and ordinary trash may have been disposed or buried, and have since been properly closed and maintained.

At many of these facilities, spills or other releases of regulated substances may have occurred previously and potentially could occur at any of our facilities in the future, possibly requiring us to undertake or fund cleanup efforts under CERCLA or state laws governing cleanup or disposal of hazardous and solid waste substances.

We work closely with governmental authorities to obtain the appropriate permits to address identified site conditions.

For example, buildings located at our facilities in both Utah and New Mexico have a type of siding that contains asbestos.

At some of our facilities, spills or other releases of regulated substances may have occurred or could potentially occur, possibly requiring us to undertake or fund cleanup efforts under CERCLA or state laws governing cleanup or disposal of hazardous and solid waste.

We work closely with government authorities to obtain the appropriate permits to address identified site conditions.

For example, buildings located at our facilities in Utah and New Mexico have a type of siding that contains asbestos.

We have adopted programs to encapsulate and stabilize portions of the siding through use of an adhesive spray and to remove the siding, replacing it with an asbestos-free material.

Also, we have trained asbestos abatement crews that handle and dispose of the asbestos‑containing siding and related materials.

We have trained asbestos abatement crews that handle and dispose of the asbestos‑containing siding and related materials.

We have a permitted asbestos landfill in Utah and have worked closely with Utah officials to address asbestos‑related issues at our Moab mine.

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Potash tailings, consisting primarily of salt and fine sediments that remain after potash is removed from ore during processing, are stored in surface disposal sites.

Some of these tailing materials may also include other contaminants, such as lead, that were introduced as reagents during historic processing methods that may require additional management and could cause additional disposal and reclamation requirements to be imposed.

For example, at least one of our New Mexico mining facilities may have legacy issues regarding lead in the tailings pile resulting from production methods utilized prior to our acquisition of these assets.

During the life of the tailings management areas, we have incurred, and will continue to incur, significant costs to manage potash residual materials in accordance with environmental laws and regulations and with permit requirements.

Some of these tailing materials may also include other contaminants, such as lead, that were introduced as reagents during historic processing methods, which may require additional management and could result in the imposition of additional disposal and reclamation requirements.

For example, at least one of our New Mexico mining facilities may have legacy issues regarding lead in a tailings pile that occurred from production methods utilized prior to our acquisition of these assets.

Additional legal and permit requirements will take effect when these facilities are closed.

Our surface permits require us to reclaim property disturbed by operations at our facilities.

Our surface permits require us to reclaim property disturbed areas of our facilities.

Our operations in Utah and New Mexico have specific obligations related to reclamation of the land after mining and processing operations are concluded.

The discounted present value of our estimated reclamation costs for our facilities as of December 31, 2021, is approximately $27.0 million, which is reflected in our audited financial statements found elsewhere in this Annual Report on Form 10-K.

The discounted present value of our estimated reclamation costs for our facilities as of December 31, 2022, is approximately $26.9 million, which is reflected in our audited financial statements found elsewhere in this Annual Report.

Various permits and authorization documents negotiated with or issued by the appropriate governmental authorities include these estimated reclamation costs on an undiscounted basis.

It is difficult to estimate and predict the potential actual costs and liabilities associated with remediation and reclamation, and there is no guarantee that we will not be identified in the future as potentially responsible for additional remediation and reclamation costs, either as a result of changes in existing laws and regulations or as a result of the identification of additional matters subject to remediation and/or reclamation obligations or liabilities.

It is difficult to estimate and predict the potential actual costs and liabilities associated with remediation and reclamation.

Additionally, it is possible that we could be identified in the future as a potentially responsible party for additional remediation and reclamation costs, either as a result of changes in existing laws and regulations or as a result of the identification of additional matters subject to remediation and/or reclamation obligations or liabilities.

The potash, langbeinite, water, and byproducts we produce and sell from leased land may be subject to royalty payments.

We produce and sell from leased land owned by the U.S.

government, the States of New Mexico and Utah, and private landowners.

The terms of the royalty payments are determined at the time of the issuance or renewal of the leases.

We produce and sell from leased land owned by the U.S., the States of New Mexico and Utah, and private landowners.

The terms of the royalty payments are determined at the time of the issuance or renewal of leases.

Some royalties are determined as a fixed percentage of revenue and others vary based upon ore grade.

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Human Capital Resources

We believe that our employees and contractors are significant contributors to our success and the future success of our Company, which depends on our ability to attract, retain, and motivate qualified personnel.

We believe that our employees and contractors are significant contributors to our success and the future success of our Company.

Such success, depends on our ability to attract, retain, and motivate qualified personnel.

The skills, experience and industry knowledge of key employees significantly benefit our operations and performance.

As of December 31, 2021, we had 440 employees distributed across our four main locations.

Our workforce is well-tenured providing invaluable experience and insight into our operations.

As of December 31, 2022, we had a total of 473 employees.

Our workforce is experienced, providing invaluable expertise and insight to our operations.

Location Number of Employees Average Tenure

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We believe in providing opportunities for employees to continue to develop and grow their careers.

We offer a tuition reimbursement program and ongoing support of continuing education for professional certifications and other credentials.

We also provide a comprehensive Career Path program for our hourly employees that clearly outlines the proficiencies necessary for each job level as well as the development steps to progress through various job levels.

We offer a tuition reimbursement program and ongoing support for continuing education for professional certifications and other credentials.

We also provide a comprehensive career path program for our hourly employees that outlines the proficiencies necessary for each job level and sets forth the development steps to progress through various job levels.

Competitive Pay and Benefits

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We align our executives' long-term equity compensation with our shareholders' interests by linking realizable pay with stock performance.

We are also committed to providing comprehensive benefit options and it is our intention to offer benefits that will allow our employees and their families to live healthier and more secure lives.

Some examples of our wide ranging benefits offered are:

health insurance, telemedicine, an employee assistance program, paid and unpaid leaves, life insurance, short-term disability insurance and a retirement savings plan with a company match.

We are also committed to providing comprehensive benefit options to our employees, and our intention is to offer benefits that will allow our employees and their families to live healthier and more secure lives.

Some examples of the benefits we offer are:

health insurance, telemedicine, an employee assistance program, paid and unpaid leave, life insurance, short-term disability insurance and a retirement savings plan with a company match.

We also offer a variety of voluntary benefits that allow employees to select the options that meet their needs, including flexible time-off, adoption assistance, prescription savings solutions, and a wellness program.

Diversity and Inclusion

We are committed to building a culture where diversity and inclusion are core philosophies across our operations, including, but not limited to, our decisions around recruitment, promotion, transfer, leaves of absence, compensation, opportunities for career support and advancement, job performance and other relevant job-related criteria.

We embrace an approach to hiring and advancement that considers the value of diversity, and we are also committed to making opportunities for development and progress available to all employees so their talents can be fully developed to maximize our and their success.

We believe that creating an environment that cultivates a sense of belonging requires encouraging employees to continue to educate themselves about each other’s experiences, and we strive to promote the respect and dignity of all persons.

Diversity and inclusion are core values to Intrepid.

These values are reflected across our operations, including, but not limited to, recruitment, promotion, transfer, leaves of absence, compensation, opportunities for career support and advancement, job performance and other relevant job-related criteria.

We embrace an approach to hiring and advancement that considers the value of diversity and we are committed to creating opportunities for development available to all employees so their talents can be fully developed to maximize our and their success.

We seek to create an environment that cultivates a sense of belonging by encouraging employees to continue to educate themselves about each other’s experiences.

We strive to promote the respect and dignity of all persons.

We also believe it is important that we foster education, communication and understanding about diversity, inclusion and belonging.

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Health and Safety

The health and safety of our employees is our highest priority, and this is consistent with our operating philosophy.

The health and safety of our employees is our highest priority, which is consistent with our operating philosophy.

We are committed to providing a safe, functional, and effective work environment for anyone who comes on our properties.

We have implemented several safety policies and protocols at each of our locations.

In response to the COVID-19 pandemic, we have implemented significant changes that we believe to be in the best interest of our employees, as well as the communities in which we operate, and that comply with government orders.

These include having our office employees work from home to the extent they are able and implementing additional safety measures, including increased cleaning protocols and social distancing procedures at all facilities, and other recommended public health measures for our field and other employees (including on-site contract workers) continuing critical on-site work.

Environmental, Social, and Governance

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We work closely with our communities and make it a priority to protect the natural resources surrounding our operations.

– Full-Cycle Water Management - We are actively developing water treatment and recycling operations in the Delaware Basin.

Recycled water will reduce the amount of produced water that is injected into produced water disposal wells.

– Solar solution mining potash - All of our potash is currently produced at solar solution mines, one of the most environmentally friendly and energy efficient mining techniques.

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By using solar energy, we do not need to burn natural gas or coal to evaporate our brine ponds.

– Salt laydown at the Bonneville Salt Flats - We are committed to helping maintain the environments in which we operate, one of which is the Bonneville Salt Flats near our Wendover, UT mine.

– Salt laydown at the Bonneville Salt Flats - We are committed to helping maintain the environments in which we operate, one of which is the Bonneville Salt Flats near our Wendover, Utah mine.

Since 2005, we have donated free of cost to the BLM nearly 7 million tons of salt that has been deposited on the racetrack to help preserve this unique attraction in northwest Utah.

We drilled an additional brackish well in 2021 to increase the brine available for the salt laydown project.

– We are the only OMRI-listed potash and langbeinite producer in the United States.

– We are the only OMRI-listed potash and langbeinite producer in the U.S.

We became OMRI-listed in 2007 for our langbeinite, or Trio ® , product, and in 2018 for our potash products at our Moab and Wendover operating facilities.

We are also registered in the Organic Input Material Program through the California Department of Food and Agriculture, a program which registers fertilizers that can be used in organic crop and food production.

– We work closely with the Bureau of Land Management and other government and regulatory agencies to preserve historical sites near our operations such as the Maroon Cliffs in Carlsbad, New Mexico and petroglyphs near our Utah operations.

– We work closely with the Bureau of Land Management ("BLM") and other government and regulatory agencies to preserve historical sites near our operations such as the Maroon Cliffs in Carlsbad, New Mexico and petroglyphs near our Utah operations.

We also work with and have supported agencies dedicated to studying and protecting endangered species near our operations such as the sand dune lizards in New Mexico.

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Through our audits and dialogue, we educate ourselves and understand the potential hazards present, create best practices that can be shared, and address areas where improvements can be made.

Prior to each task, employees are required to:

Prior to each task, employees are

assemble the proper personal protection equipment, tools, permits, etc., ensure the area is safe for employees and contractors, discuss the task with all stakeholders, and understand how the task is related to the overall business.

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The data from these safety audits is collected to analyze where, what, and why gaps exist, and to provide meaningful information that results in safer work for our employees.

In August 2021, our East Mine operation in Carlsbad, New Mexico received the National 2020 Sentinels of Safety Award in the large underground nonmetal category.

Our East Mine operation in Carlsbad, New Mexico received the National 2020 and 2021 Sentinels of Safety Award in the large underground nonmetal category.

The Sentinels of Safety Award is presented by the National Mining Association each year to recognize the outstanding safety achievements of mining operations across a variety of categories.

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The information found on, or that can be accessed through, our website is not part of this or any other report we file with, or furnish to, the SEC.

Executive Officers

The following section includes biographical information for our executive officers:

Name Age Position

Jornayvaz III 63 Executive Chairman of the Board and Chief Executive Officer

Brian Stone 59 President and Chief Operational Officer

Baldridge 60 Senior Vice President - New Mexico

Preston 37 Chief Financial Officer

Smith 48 Vice President, General Counsel and Secretary

Jornayvaz III has served as our Executive Chairman of the Board since 2010 and as our Chief Executive Officer since August 2014.

Jornayvaz served as our Chairman of the Board and Chief Executive Officer from our formation in 2007 until 2010.

Jornayvaz served, directly or indirectly, as a manager of our predecessor, Intrepid Mining LLC, from 2000 until its dissolution at the time of our initial public offering in 2008.

Jornayvaz is the sole owner of Intrepid Production Corporation.

Jornayvaz and Intrepid Production Corporation together beneficially own 15.2% of our common stock, as of January 31, 2021.

Brian Stone has served as President since August 2021 and our Chief Operating Officer since December 2019.

Prior to joining Intrepid, Mr.

Stone was the Chief Operating Officer for Hupecol Operating Co.

LLC, an international oil and gas company focused on South America and Europe, from 2005 to 2019.

Baldridge has served as our Senior Vice President - New Mexico since December 2019.

Baldridge served as General Manager of our New Mexico operations from July 2010 to December 2019 and Manager of Mines since our formation in 2007.

Previously Mr.

Baldridge served as Mine Manager of Intrepid Mining from 2003 until its dissolution at the time of our IPO in 2008.

Prior to joining Intrepid, Mr.

Baldridge held various positions with Mississippi Potash, Inc.

from 1988 to 2003.

Baldridge has over 30 years of experience in the potash mining industry.

Preston has served as our Chief Financial Officer since December 2021.

Preston also serves as our principal financial officer and principal accounting officer.

Preston served as our Vice President of Finance from November 2019 to December 2021 and our Director of Budget and Forecast from April 2016 to November 2019.

Previously, Mr.

Preston served in successively more senior finance roles since joining Intrepid in 2008, including Senior Manager of Budget and Forecast, Manager of Budget and Forecast, and Financial Analyst.

Smith has served as our Vice President, General Counsel and Secretary since December 2019.

Before joining Intrepid, Mr.

Smith served as General Counsel for an Alaska Native Claims Settlement Act Regional Corporation.

Prior to that, Mr.

Smith was in private practice from July 2017 to January 2019, served as Executive Vice President and General Counsel for Echo Energy, a start-up pure-play oil and gas operator from December 2016 to June 2017, and as Assistant General Counsel for Operations for Continental Resources, a large independent upstream producer, from June 2014 to June 2016.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business