POSTMEDIA CONTENT WORKS – As potash prices remain depressed, the watchword for Saskatchewan’s major producers in 2016 is cost control. Prices for the fertilizer ingredient were more than $900 a tonne in 2008, but thanks to slumping demand for the mineral, they are now expected to stay in the $200 to $300 range for the next several years.
Already the world’s largest producer of potash, Saskatchewan had been enjoying the promise of even greater things ahead for the industry with firms investing billions in upgrades to existing sites and several new major mining operations taking shape.
The Mosaic Company alone has committed more than $3 billion to a new shaft at its Esterhazy mine. The K3 development has been underway since 2013, and remains on schedule and on budget, says Bruce Bodine, incoming senior vice-president, potash.
“We continue to sink the shaft, and will be for the rest of 2016. Also, we are building an overland conveyance system that will transport ore from K3 to our mill at K2.”
Bodine says that when completed, K3 will be among the lowest-cost, most-efficient mines in the world. “We are confident that crop nutrient demand will continue its decades-long upward trend, and that tonnes from K3 will be critical in meeting that demand.”
The company has also committed to cutting $500 million in costs by 2017, and has been carefully weighing capital expenditures and production decisions, says Bodine, focusing on the things it can control in a tough price environment.
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