Saskatchewan potash producers have two billion reasons to feel secure.
They don’t have to worry too much about the spot price of the fertilizer ingredient in 2015, or the outcome of the recently announced provincial royalty review, or even the machinations of competitors flooding the market with product to grab market share.
Those two billion reasons represent the expected increase in world population in the next 35 years, so the major expansions underway at Saskatchewan potash mines appear to be safe bets, according to industry representatives.
“Food security is a defining issue of our time; and for the next century, demand for food will only accelerate,” says Walt Precourt, senior vice-president of potash for The Mosaic Company.
Precourt noted those two billion new mouths to feed are equivalent to the entire world population in 1940. Today there are seven billion people on Earth, with some forecasts putting the population at more than 10 billion in 2050.
“The investments we have made in expanding our potash operations in Saskatchewan will ensure we have the capacity to meet the demand for potash and help the world grow the food it needs,” says Precourt.
Potash is used in the creation of fertilizer, which greatly increases the productivity of land used to grow food.
Mosaic has been upgrading its facilities in a multi-year, multibillion-dollar project since 2008, including its sites in Belle Plaine, Colonsay and Esterhazy.
Esterhazy was Saskatchewan’s first potash mine, with its K1 and K2 shafts producing potash over the past 50 years.
In March, Mosaic announced it would be investing another $1.7 billion developing its new site at its mine in Esterhazy. The K3 site promises to begin delivering potash in 2017. The sinking of two new shafts at the K3 site began in 2013 and will continue through 2016, employing an average of 300, and as many as 600, skilled tradespeople.
“The recent addition to the scope of the K3 development builds on the long-term plan that was developed when the project was first approved,” says Precourt.
“This next stage will include an additional investment of approximately $1.7 billion to develop the mine to its full capacity. This brings Mosaic’s total commitment in K3 to $3.2 billion.”
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