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Potash/Phosphate

Ex-PotashCorp CEO says industry lacks leadership, calls Agrium merger ‘sad’ – by Ian Vandaelle (Business Network News – August 28, 2017)

http://www.bnn.ca/

Bill Doyle is decrying the state of his former field, arguing the potash industry lacks strong leadership amid persistently weak prices. In an interview on BNN Monday, the former Potash Corporation of Saskatchewan chief executive said the industry has sacrificed prices at the altar of volumes, chasing larger market share instead of seeking to firm up market conditions for the underlying commodity.

“There’s just no one that’s stepped up to the plate that’s taking a leadership role,” he said. “Price is so much more important than volume and producing, according to the market. It’s one thing to pay lip service to it, it’s another thing to actually have the intestinal fortitude to do it.”

Prices of the fertilizer ingredient collapsed after Belarus’s Uralkali broke up the production cartel in 2013, effectively leaving producers to their own devices instead of seeking to balance supply and demand. Under Doyle, PotashCorp was considered the swing producer in the space, and was quick to curtail production when potash demand plummeted in 2009.

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K+S opens west coast terminal to ship potash from Legacy mine (Saskatoon StarPhoenix – August 28, 2017)

http://thestarphoenix.com/

Just over a year after its new $4.1-billion Legacy mine began producing potash, K+S Potash Canada has opened the west coast facility that will allow it to ship potassium-laced salts extracted in Saskatchewan to customers in Asia and South America.

The Port Moody, B.C. storage and handling facility is the product of a 2014 agreement between K+S Potash Canada (KSPC) — a subsidiary of the Kassel, Germany-based K+S Group — and Pacific Coast Terminals Co. Ltd. (PCT).

According to the Saskatoon-based potash miner, the deal resulted in modifications of PCT’s existing facility and the construction of a new storage building capable of holding 160,000 tonnes of potash. The solution mine can produce up to 2.86 million tonnes per year.

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BHP explores $2 billion stake sale in Canada potash mine: sources – by John Tilak and Greg Roumeliotis (Reuters U.S. – August 25, 2017)

http://www.reuters.com/

TORONTO/NEW YORK (Reuters) – Anglo-Australian mining giant BHP Billiton Ltd is considering selling a 25 percent interest in its Canadian potash mine project, a stake that could be worth close to $2 billion, people familiar with the matter told Reuters.

The move comes as activist investor Elliott Management Corp has been pushing the company for changes. BHP is working with an investment bank for the potential stake sale in its partly built Jansen, Saskatchewan potash project, the sources said this week.

For BHP, the move will help share the risk of developing the mine and reduce its exposure to the project, said the sources, who asked not to be identified because the deliberations are confidential.

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Editorial painted misleading picture of mining – by Jim Taylor (Gainesville Sun – August 24, 2017)

http://www.gainesville.com/

Jim Taylor is a local attorney who lives in Bradford County and represents HPS Enterprises.

You might be surprised to learn that phosphate mining in Florida first started here in Alachua County more than 130 years ago. Phosphate nutrients are just as important for farmers to grow the food we eat as they were back then, but the processes we use to mine this crucial resource have undergone significant advancements.

That’s why it was disappointing to read The Sun’s recent editorial, “Mine poses threat to river, aquifer,” which paints an incomplete and misleading picture of the phosphate mining plans that have been submitted to officials in Union and Bradford counties.

The families pursuing this opportunity are local residents who have owned this land for decades. They are part of our community. They have a vested interest in returning the land to productive use for wildlife, agriculture and other purposes after mining has taken place, and they want to make sure our area’s precious natural environment and quality of life are protected for generations to come.

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Slumping fertilizer producers gear up to fill truck demand – by Rod Nickel (Reuters U.s. – August 24, 2017)

https://www.reuters.com/

(Reuters) – Fertilizer companies, coping with a stubborn price slump, are banking on tighter emissions standards for diesel trucks in the United States and Europe to buoy their balance sheets.

Nitrogen fertilizer producers including CF Industries Holdings Inc and Agrium Inc are accelerating output of diesel exhaust fluid (DEF), a water and urea solution used to reduce emissions of nitrogen oxide. The niche market offers premiums of $50 to $100 per short ton over the crop nutrients they sell at prices that are depressed due to excessive supplies.

DEF demand has risen since the U.S. Environmental Protection Agency set tighter emissions controls in 2010 for diesel trucks made by Volvo [VOLVO.UL], Daimler AG and others. The European Union, in which DEF is known as AdBlue, introduced similar legislation in 2013.

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BHP’s US$14B Saskatchewan mine delay comes amid dark outlook for potash producers – by Jesse Snyder (Financial Post -August 23, 2017)

http://business.financialpost.com/

BHP Billiton Ltd.’s decision to delay a major potash mine in Saskatchewan comes amid a persistent weakening of demand for fertilizer, leading producers to shelve major investments and ink sizeable mergers with competitors to boost revenues.

On Tuesday, Melbourne-based BHP announced it would delay its multi-billion dollar Jansen potash mine, located about 150 kilometres east of Saskatoon. Analysts estimate the project could cost as much as US$14 billion to complete.

The decision comes amid a shaky outlook for Canadian potash producers, who have been forced to scale back major mining developments in the face of low commodity prices. It will also delay BHP’s entrance into the potash sector, as the company faces intense pressure from activist hedge fund Elliott Management Corp. to shed some of its underperforming assets.

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Brad Wall Retiring From Politics After Almost A Decade As Saskatchewan Premier – by Lauren Krugel (Huffington Post – August 10, 2017)

http://www.huffingtonpost.ca/

His fierce opposition to Anglo-Australian mining giant BHP Billiton’s hostile
takeover bid for Potash Corp. of Saskatchewan in 2010 made him a folk hero of
sorts. More recently, he has been an ardent champion of pipeline projects that
would connect Canada’s crude oil to global markets.

REGINA — One of Canada’s most high-profile premiers who rose to national prominence for his down-to-earth style, sharp wit and, more recently, his willingness to lock horns with Ottawa is retiring from politics after a decade in office.

Saskatchewan’s Brad Wall, who is 51, said he made the decision at the end of June after talking it over with his wife Tami. “I think renewal will be good for the province. I think renewal and a different perspective will be good for the government. I think renewal will be good for my party as well,” he said Thursday.

“Whatever I do after this — and I currently have no leads or prospects — this job will be the honour of my working life.” Wall said he will stay on as premier and Swift Current member of the legislature until his successor is chosen in a leadership race.

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USGS Assesses Billions of Potential Potash Resources in Ukraine (United States Geological Survey – August 3, 2017)

https://www.usgs.gov/news/

The Dnieper-Donets Basin of Ukraine could contain an estimated 4.3 billion tons of undiscovered potassium-bearing salt according to a recent U.S. Geological Survey assessment. In addition, previous estimates show that the nearby Pripyat Basin of Belarus could contain 80–200 billion metric tons of undiscovered potash resources.

The term “potash” refers to potassium-bearing, water-soluble salts like potassium chloride derived from evaporite basins, where seawater evaporated and precipitated various salt compounds. In 2010, world potash production was about 33 million metric tons, mostly for use in fertilizers.

Potash resources are often expressed in terms of the amount of potassium oxide (K2O) that can be obtained from the potassium-bearing salt. For instance, the 4.3 billion tons of potassium-bearing salt in the Dnieper-Donets Basin is the equivalent of 840 million tons K2O, while the 80–200 billion metric tons of potassium-bearing salt in the Pripyat Basin could contain 15-30 billion metric tons of K2O.

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BHP’s Canadian potash plan not a done deal – by Matt Chambers (The Australian – July 31, 2017)

http://www.theaustralian.com.au/

It is unlikely that BHP’s latest $US4.7 billion ($5.8bn) plan for its Jansen potash project in Canada — which chief executive Andrew Mackenzie is aiming to have in ­directors’ hands for approval within a year — will go ahead with­out ­substantial improvements to ­design or the ­market outlook.

Mackenzie put the big Canadian potash project back on the drawing board as BHP’s major medium-term mining growth option, alongside a Spence copper mine expansion in Chile, just two months ago, after previously flagging a slowdown and even mothballing of the project. So it is expected to be a focal point of briefings after BHP delivers an expected full-year profit of $US7.2bn later this month.

At Spence, a $US2bn underground mine approval is looking very likely in the next few weeks, as copper sentiment is running hot and BHP has cut a previous cost estimate by a third, boosting the expected rate of return to around 15 per cent.

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Fertilizer maker Potash Corp beats revenue expectations – by Ahmed Farhatha and Rod Nickel (Reuters Canada – July 27, 2017)

https://ca.reuters.com/

(Reuters) – Canada’s Potash Corp of Saskatchewan reported bigger-than-expected revenue on Thursday as it sold more potash at higher prices compared with a year earlier, marking a slow recovery in the oversupplied market.

Potash prices have rebounded modestly since last year but remain low, under pressure from bloated global capacity and soft crop prices. The Saskatoon, Saskatchewan-based fertilizer producer’s revenue rose 6.4 percent to $1.11 billion, beating the average estimate of $1.09 billion.

Potash Corp’s results were mostly in line with expectations, but the company’s second-half prospects may not be bolstered by improving potash market conditions, disappointing some investors, Citi analyst P.J. Juvekar said.

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BHP defends plan to invest $6bn in Canadian potash project – by Matt Chambers (The Australian – July 24, 2017)

http://www.theaustralian.com.au/

BHP Billiton has defended its contentious plans for a fresh $US4.7 billion ($5.9bn) investment to bring the Jansen potash project in Canada’s Saskatchewan into production, saying low prices are expected to rise as oversupply eases. The mining giant added that the project would only go ahead if strict investment hurdles were overcome.

The defence, posted to its website earlier yesterday, comes after US fertiliser giant Mosaic cast doubt on the plan’s timing and economics and as US activist fund Elliott uses the plans to open up a new front in its campaign to restructure BHP.

BHP’s principal potash analyst, Paul Burnside, said the Jansen project, where BHP has already approved $US3.8bn to access the 1km deep ore body ahead of a development decision, could support attractive shareholder ­returns over decades. “We’re excited to have this option in our portfolio, and there are many ways we can realise value from it,” Mr Burnside said.

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Historic deal ensures First Nations participation in new potash mine – by Marilyn Scales (Canadian Mining Journal – June 1, 2017)

http://www.canadianminingjournal.com/

Three levels of government, a mining company and a First Nation have come together in a historic agreement to develop a new potash mine in Saskatchewan. The joint venture between Encanto Potash Corp. and the Muskowekwan First Nation is truly unique. Together they plan to develop a solution mine near the town of Lestock on property within the Muskowekwan reserve.

The Muskowekwan are joining the project as full participants, with all the economic and revenue opportunities that entails. And the community is enthusiastic about the prospects.

Over the long life of a Saskatchewan potash mine, this could be worth billions to the First Nation, as chief Reg Bellerose told CMJ. There are about 2,000 members of the Muskowekwan First Nation, but only about 700 or 800 live on the reserves because the economic opportunities lie elsewhere.

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BHP’s $6bn potash play a misstep, warns Elliott Management – by Matt Chambers (The Australian – July 20, 2017)

http://www.theaustralian.com.au/

New York hedge fund Elliott Management says BHP Billiton’s plans to approve a $US4.7 billion ($6bn) potash project in Saskatchewan are alarming, with the activist fund querying whether potash could be “the next shale”.

“This sounds alarmingly familiar and comes as the company proclaims the dubious strategy of ‘Thinking Big’ — a concept that has been disastrous for BHP shareholders,” an Elliott spokesman said. “We share the deep concerns raised by analysts and shareholders that expanding into potash could be a severe strategic misstep,” Elliott said, without naming the analysts or shareholders.

“Think Big” is the slogan BHP has used in a $10 million ad campaign in recent months that has dropped the Billiton name for marketing purposes.

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Potash call marks fork in the road for BHP’s Ken MacKenzie – by Stephen Bartholomeusz (The Australian – July 18, 2017)

http://www.theaustralian.com.au/

It could be regarded as a deliberate provocation, a statement of defiance and intent. The latest addition to BHP Billiton’s “Prospects” blog will, intentionally or not, irritate the group’s activist stalker, Elliott Management and its supporters. In the blog item, BHP’s principal potash analyst, Dr Paul Burnside, makes the demand-side case for potash, promising an analysis of the supply side in a future entry.

The issue is somewhat controversial in the context of BHP and Elliott’s attempt to force its own agenda on the company. BHP has, of course, already committed $US3.8 billion to its Jansen potash project in Canada and earlier this year foreshadowed a decision as early as next year on whether to proceed with the first phase of a project that could cost a further $US8bn to $US10bn.

Despite the dramatic reductions in its capital investment once the commodity boom ended, BHP and its chief executive Andrew Mackenzie have remained enthusiastic about the long-term prospect of entering the potash market and adding a “fifth pillar” to BHP’s portfolio of iron ore, coal, copper and petroleum.

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Divisive $13 Billion Potash Plan to Test BHP’s New Chairman – by David Stringer (Bloomberg News – July 17, 2017)

https://www.bloomberg.com/

BHP Billiton Ltd.’s plan to enter the potash market with a contentious $13 billion project in Canada is adding to challenges facing the incoming chairman of the world biggest mining company.

Ken MacKenzie, a 53-year-old board member who takes up the role in September, currently is on a global tour to meet investors in the wake of an activist campaign in recent months spearheaded by Elliott Management Corp. Issues of concern for some shareholders include the producer’s U.S. onshore oil and gas assets and its plans to accelerate the Jansen potash venture.

Proceeding with Jansen risks a “severe strategic misstep,” according to Sanford C. Bernstein Ltd. analyst Paul Gait, as the new supply would risk depressing prices by delaying to about 2036 the ability of the potash market to work through overcapacity. Paul Singer’s Elliott went public in April with a campaign seeking asset sales and a corporate overhaul, claiming management decisions have eroded as much as $40 billion in value.

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