Fertilizer and specialty chemicals producer Israel Chemicals (ICL) said it will begin mining vast reserves of mineral salt polyhalite located at lower levels of its potash mines in the North Sea.

Geological studies conducted by ICL's British unit ClevelandPotash (CPL) indicate that more than a billion tonnes of polyhalite ore are located in its Boulby mines in northeast England, beneath the potash that it mines, ICL said on Tuesday.

CPL, the only potash manufacturer in England, carries out mining activities below the North Sea under a concession from the British government. ICL said it expects to be able to mine hundreds of thousands of tons of the mineral during the first year at a relatively low cost.

Polyhalite can be used as a specialty fertilizer. It is comprised of calcium, magnesium and potassium sulphates, each of which is important for good crop development, and is low in chlorine, making it suitable for use with chlorine-sensitive crops.

Polyhalite can be used as a specialty fertilizer for organic and other applications, or as a raw material for the production of specialty fertilizers.

ICL, the world's sixth-largest potash producer, intends to establish a plant near the Tees Valley for processing polyhalite into specialty fertilizers and industrial products.

The British government has announced that it views this as a strategic initiative with the potential to significantly enhance the local economy and intends to support the project with a grant of 15 million pounds, ICL said.

"The 30-year mining expertise that we have developed at Boulby, together with the proximity of the polyhalite deposits to our existing mine, will simplify the extraction process while reducing its cost," said Graham Clarke, CPL's managing director.

He said the company invested over 12 million pounds in feasibility and commercialization studies.