Archive | Potash/Phosphate

‘The end of the potash world as we know it’ is no exaggeration – by Peter Koven (National Post – July 31, 2013)

The National Post is Canada’s second largest national paper.

For the potash industry, this would change everything.

If Russian producer OAO Uralkali follows through on its plan to max out production and collapse one of the sector’s two trading arms, the industry’s oligopoly-like business model is thrown out the window.

The days in which the potash producers withheld production to maintain pricing influence could break down completely. Instead, experts said the stage would be set for a dramatic battle for market share, with the companies running at much higher production capacity and selling far more product. Higher supply would mean lower prices, greater competition and a culling of higher-cost producers and eager new entrants.

In short, the potash business would start to resemble a normal commodity business. BMO analyst Joel Jackson called it “the end of the potash world as we know it,” which is no exaggeration.

Markets were rattled at that prospect. Shares of every potash producer in the world plunged on Tuesday as investors absorbed the idea of global prices falling by US$100 a tonne or more. Continue Reading →

UPDATE 4-Potash sector rocked as Uralkali quits cartel; price slump seen – by Polina Devitt and Natalia Shurmina (Reuters India – July 30, 2013)

http://in.reuters.com/

MOSCOW, July 30 (Reuters) – Russia’s Uralkali has dismantled the world’s largest potash cartel in a move that it expects to slash prices by 25 percent, heralding a reshaped industry and pummelling shares of companies that produce the key fertiliser ingredient.

The break-up of the Belarus Potash Company (BPC), a joint venture with Belarussian partner Belaruskali, could cause a price war and leaves North America’s Canpotex as the dominant potash export venture.

It could also lead to cancellations of projects by rivals as the industry weighs the effect of lower prices, but may feed through to better deals for farmers and ultimately consumers. U.S.-listed shares of the Canpotex owners – Potash Corp of Saskatchewan, Mosaic Co and Agrium Inc – plummetted, cutting their market value by nearly $15 billion.

BPC and Canpotex had accounted for 70 percent of global trade in potash, and the duopoly had set identical prices in key markets such as China and India.

“In the last few years, BPC and Canpotex … succeeded by raising potash prices much above their production cost,” a senior official at a major Indian potash firm said, asking not to be identified because of the sensitivity of the matter. Continue Reading →

Vale holds open houses on EIS for potash mine – by Regina Leader Post (July 19, 2013)

http://www.leaderpost.com/index.html

Vale Potash Canada held open house information meetings to discuss the environmental impact statement (EIS) for its proposed Kronau potash mine in Kronau, about 30 km southeast of Regina, on Wednesday and nearby White City on Thursday.

While the Brazilian mining giant’s proposed potash solution mine project was put on hold last August, there’s still considerable interest in the $3-billion project and its potential environmental impact on the area, according to a spokesperson for Vale Potash Canada.

“What we’re trying to get across to people is that if the Kronau project proceeds … the commitments attached to the EIS still apply,” said Lara Ludwig, community relations lead for Vale Potash Canada. About 170 people attended the Kronau session, which was similar to the crowd at the first public information meetings on the Kronau project in 2011, Ludwig said.

“A lot of people had questions about how the internal option analysis is going and what the status (of the project) is. From our perspective, … it was a good opportunity to reconnect and answer any questions.”

Last August, the giant mining company decided to temporarily suspend further work on the 2.9-million tonne per year project due to the tough global economy, although work on the EIS and finding a secure water source for the mine continued. Continue Reading →

The huge potential of Congo potash – by Lawrence Williams (Mineweb.com – July 5, 2013)

http://www.mineweb.com/

The Republic of Congo (ROC), not to be confused with the neighbouring DRC, has the potential to develop into one of the world’s biggest potash miners over the next decade.

For those who are unaware there are two Congos. The former Belgian colony of the Democratic Republic of Congo – the DRC – is the one which is mostly in the news, with its huge and rich base and other industrial metals, gold and diamond resources. However, lying immediately to the west of much of the DRC on the northern side of the Congo river is the former French colony of the Republic of Congo (ROC – also known as Congo Brazzaville to more easily differentiate itself from its neighbour to the south.)

The ROC, like many African nations has had its own share of difficulties since it cast off its colonial yoke in 1960, but these have not been quite as violent as the problems which have continually beset the DRC over the years and there has been a relatively stable government in place under President Denis Sassou Nguessa since a bloody civil war in 1997. While certainly not exactly a model modern democracy, the ROC has been relatively stable for the past decade and President Sassou has won succeeding Presidential elections, although with suspiciously high percentage majorities! Continue Reading →

Canadian potash deal shows trend among Chinese – by Eddy Lok (China Daily U.S.A. – July 5, 2013)

sa.chinadaily.com.cn/index.

Chinese investment in a potash project in the Canadian province of Saskatchewan bodes well for junior mining companies in search of international financing, analysts say.

Vancouver-based Western Potash Corp, recently closed what it called was a strategic equity investment in the company by China BlueChemical Ltd and Guoxin International Investment Corporation.

Under the joint-venture deal, CBC (Canada) Holding Corp will make a strategic equity investment of $32 million in Western Potash at a price of 71 cents a share, according to a company news release.

As a result of this transaction CBC (Canada) Holding will hold a 19.9 percent ownership stake in the company on a non-diluted basis.

CBC (Canada) Holding is jointly owned by China BlueChemical Ltd and Benewood Holdings Corp Ltd. China BlueChemical is a majority-owned subsidiary of China National Offshore Oil Corporation, while Benewood is a wholly-owned subsidiary of Hong Kong registered Guoxin International Investment Corporation Limited. Continue Reading →

City sees big things in it’s future – Regina Leader Post Editorial (June 12, 2013)

http://www.leaderpost.com/index.html

The city councils of Saskatchewan’s two biggest cities are dreaming some pretty ambitious future population numbers these days – Saskatoon is eyeing expansion to over a million people while Regina is planning for 500,000.

Born of optimism from the continuing economic boom and rosy forecasts of long-term provincial economic growth fueled by natural resources and a resurgent agriculture sector, planners see the day when Regina and Saskatoon will be well over double their current size. In Regina’s case, that means annexing land on all sides of the city from the RM of Sherwood to accommodate expansion.

Are these projections realistic or just wishful thinking? Well, history does offer plenty of evidence for caution when it comes to population growth in this province.

Indeed, before the current economic boom began fuelling strong population growth less than 10 years ago, skeptics could point to the fact that Saskatchewan had a bigger population in the 1930s than in the 1970s. For example, the provincial population of 921,323 in 1976 was lower than that of 1936, when 931,547 people called the province home. And even though the province briefly surpassed the one-million mark in the 1980s, a stagnant economy and outmigration subsequently took the number down to 978,933 by 2001. Continue Reading →

Saskatchewan will need $20-$30B a year in capital – by Bruce Johnstone (Regina Leader Post – June 12, 2013)

http://www.leaderpost.com/index.html

Saskatchewan will need to attract $20 billion to $30 billion in capital investment annually for the next 20 years to finance its rapid economic and infrastructure growth, according to a Conference Board of Canada report.

How well the province manages this unprecedented demand for capital will largely determine whether or not Saskatchewan achieves its maximum growth potential, said the study, entitled Green Machine: Financing Growth in the New Saskatchewan.

About $38 billion in capital projects are currently underway, largely financed by multinational, out-of-province companies, with mining projects accounting for about 40 per cent of the work. But the province will require capital investment of $20 billion to $30 billion a year over the next two decades (2013 to 2032), to keep up with demand for oil and gas, mining and public infrastructure spending.

“This is not another commodity cycle. The force driving higher returns to crops and potash are real and long term,” the study said, noting that global population is expected to grow by 36 per cent by 2050, which will require another 945 million tonnes of cereal grains and 200 million tonnes of meat.

In addition to the capital demands of extractive industries, like oil and gas and mining, demand for public infrastructure, like roads, water and sewage treatment facilities, will also increase as the population grows to 1.4 million by 2035, the study said. Continue Reading →

Russian city awaits potash boom but outlook fragile – by Agence France-Presse/Global Post.com (June 11, 2013)

http://www.globalpost.com/

At first sight, Berezniki looks a typically bland provincial Russian outpost with its decrepit housing blocks and factory chimneys.

But the city in the Perm region of the Urals sits on a vast and hugely valuable secret — one of the world’s biggest deposits of potash, a mineral that is now coveted across the world as a fertiliser for food crops.

Berezniki, 1,200 kilometres (750 miles) east of Moscow, sits on the Verkhnekamsk deposit, which was discovered in 1925 and which was developed after World War II.

Its proven reserves represent some 34.5 percent of the world’s total and the deposit is the second biggest in the world after those in Saskatchewan in Canada, according to the US Geological Survey.

A veritable army of miners march up and down the kilometres of passages that have already been carved out 450 metres (1,500 feet) underground. Their machines work day and night to mine the pink coloured rock where the mineral is contained.

This is then taken to the surface by conveyors to extract the precious mineral. Once turned into powder or crystalised as granules, potash is used as a fertiliser to help crops grow and increase their immunity to disease. Continue Reading →

[Saskatchewan potash] Bethune Mine: Promises Lasting Legacy – by Ella McIntyre (Saskatoon StarPhoenix – June 11, 2013)

http://www.thestarphoenix.com/index.html

A promise of economic growth and employment, with an eye to ensuring long-lasting environmental and community well-being, is behind K + S Potash Canada’s $3.25 billion dollar solution mining Legacy Project planned for the Rural Municipality (RM) of Dufferin, near the village of Bethune. Bethune is approximately 50 kilometres from Regina.

“Not only is the Legacy Project Saskatchewan’s first potash mine in nearly 40 years, it is one of the world’s most economically attractive greenfield projects,” said Christine Stass, spokesperson for K+S Potash Canada and its parent K+S Group, a leading supplier of fertilizers and the world’s leading salt producer.

As Stass explains, with a potash price of between USD 400 and 450/tonne, the project achieves a Return on Capital Employed of 12 per cent and an attractive premium on K+S Group’s costs of capital. It also promotes important jobs and economic opportunities for Saskatchewan. By spring 2013, 200 to 300 people will be working on site which, at its peak, will provide over 1,100 jobs and roughly 6 million employment hours. The following two years will see rail construction, structures built and equipment installed and, by late 2015, plant commissioning and the site near completion. Once in full production, the mine will employ 320 permanent workers, with more jobs created through ongoing contract employment.

Potash production for the mine is anticipated for 2015. The operation will ramp up to full capacity of 2.86 million tonnes by 2023. With further expansion, production could increase up to 4 million tonnes per year. Continue Reading →

RPT-BHP entry threatens creaking global potash duopoly – by Ron Bousso and Polina Devitt (Reuters U.K. – June 10, 2013)

http://uk.reuters.com/

(Reuters) – The prospect of new competition from miner BHP Billiton could dynamite the cracks appearing in a potash duopoly that accounts for 70 percent of global trade in the fertiliser.

For decades two export groups, Belarus Potash Company (BPC), which represents producers in Russia and Belarus, and Canpotex, its North American equivalent, have set identical prices in key markets such as China and India and have often curbed output simultaneously.

That choreography, which smaller players also dance in step with, is already under fire; four producers in the groups – BPC’s Uralkali, and Canpotex’s three members Potash Corp of Saskatchewan, Agrium and Mosaic – recently agreed to pay over $100 million to settle a U.S. antitrust lawsuit accusing them of concerted action to raise prices.

Canpotex and BPC did not respond to a request for comment for this story, but the producers have denied the accusations, and Uralkali said “potash producers and traders do not agree with each other on prices and pursue their own pricing policies”. Their footwork has also faltered under the strain of falling prices in recent months, and the music could stop altogether if BHP goes ahead with the 8 million tonne per year Jansen mine in western Canada, which would be the world’s largest potash mine if it opens as scheduled in 2017.

Continue Reading →

Allana Says Concerns for Potash Supply Glut Overblown – by Christopher Donville (Bloomberg News – June 10, 2013)

http://www.bloomberg.com/news/

Allana Potash Corp. (AAA), the Canadian developer of a $642 million potash mine in Ethiopia, says predictions of a global oversupply of the crop nutrient are overblown because competing projects are being put on hold.

World potash production capacity will rise 38 percent to 96.5 million metric tons by 2017, while demand will increase 26 percent to 66 million tons, according to Green Markets, a fertilizer industry information provider.

Supply forecasts include mines that aren’t yet in production and may be shelved or canceled because of rising construction costs, said Farhad Abasov, Toronto-based Allana’s chief executive officer.

“On paper it seems like there is quite a bit of supply coming on line,” Abasov said in a May 28 telephone interview from London. “In reality only a handful of them will hit production.”

Soaring expenses are beginning to exact a toll on proposed potash mines around the world. Vale SA, the third-largest mining company, in March suspended its Rio Colorado project in Argentina after the estimated cost almost doubled to about $11 billion. Continue Reading →

Allana in Ethiopia Snubs Potash Supply Concern: Corporate Canada – by Christopher Donville (Bloomberg News – June 10, 2013)

http://www.businessweek.com/

Allana Potash Corp. (AAA), the Canadian developer of a $642 million potash mine in Ethiopia, says predictions of a global oversupply of the crop nutrient are overblown because competing projects are being put on hold.

World potash production capacity will rise 38 percent to 96.5 million metric tons by 2017, while demand will increase 26 percent to 66 million tons, according to Green Markets, a fertilizer industry information provider.

Supply forecasts include mines that aren’t yet in production and may be shelved or canceled because of rising construction costs, said Farhad Abasov, Toronto-based Allana’s chief executive officer.

“On paper it seems like there is quite a bit of supply coming on line,” Abasov said in a May 28 telephone interview from London. “In reality only a handful of them will hit production.”

Soaring expenses are beginning to exact a toll on proposed potash mines around the world. Vale SA, the third-largest mining company, in March suspended its Rio Colorado project in Argentina after the estimated cost almost doubled to about $11 billion. Continue Reading →

Argentines hope Lula will pull off miracle on Vale potash mine – by By Samantha Pearson (Financial Times – June 2, 2013)

http://www.ft.com/home/us

It was an unnerving sight for Vale’s investors. Dressed in a traditional Andean poncho, Brazil’s former president Luiz Inácio Lula da Silva was pictured in Argentina in May discussing the future of the miner’s suspended potash project.

“We are trying to make the venture viable and he seemed open to the idea,” Francisco Pérez, the governor of Argentina’s Mendoza province where the mine is based, said after their meeting.

The visit came less than a month after President Dilma Rousseff also flew to Argentina to discuss the matter, raising concerns that Vale, the world’s second-biggest miner by volumes, is facing growing political pressure to maintain the cash-draining project.

Vale’s Rio Colorado venture was set to be one of the biggest foreign capital investments in Argentina, turning Brazil’s neighbour into a top supplier of potash – the potassium compounds that Brazilian farms so desperately need as fertiliser.

However, after spending $2.5bn completing more than 40 per cent of the project, which includes a port terminal as well as 790km of railway, Vale officially suspended it in March. Rampant inflation and exchange rate controls in Argentina have made the venture commercially unviable, Vale says, almost doubling its cost to $11bn from initial estimates.

Continue Reading →

Despite challenges, mining on track to invest $50B [in Saskatchewan] – by Bruce Johnstone (Regina Leader-Post – May 29, 2013)

http://www.leaderpost.com/index.html

Demand for food, energy to increase

Despite the postponement of several multibillion-dollar projects, the head of the Saskatchewan Mining Association is confidently holding to his prediction that the industry will invest $50 billion in the province between 2008 and 2028.

“The outlook for the mining market and sector in 2013 remains strong, if mining companies are strategic in their actions,” Steve Fortney, president of the SMA, told a news conference Monday to launch Mining Week in Saskatchewan. “We need to remain aware of the challenges the industry faces, including increased project and operational costs that are not supported by commodity prices, and a tight labour market.”

Fortney, who is senior director of technical projects for PotashCorp in Saskatoon, was referring to recent announcements by mining companies to delay or cancel major capital projects due to softening commodity prices, a weakening global economy and competition for resources.

Earlier this month, Mosaic announced it was delaying, for up to two years, a couple of expansion projects in Saskatchewan, which would have added another two million tonnes of potash production at a cost of $2 billion. Continue Reading →

Potash, uranium to remain leaders of pack, forum hears – by Scott Larson (Saskatoon StarPhoenix – May 1, 2013)

http://www.thestarphoenix.com/index.html

The mining industry in Saskatchewan, led by potash and uranium, will continue to be a strong sector, says Gary Delaney, chief geologist with the province.

“We are very optimistic about potash and uranium,” said Delaney while speaking to an audience at the third annual Saskatchewan Mining Forum.

“Our mineral sector is well positioned for growth. The roots are strong and we are seeing vigorous exploration. There is more opportunities, there is more potential, and we hope going forward that will be realized and our sector will continue to grow.”

There are 10 producing potash mines in the province and at least nine potential greenfield projects have been identified. Pam Schwann, executive director with the Saskatchewan Mining Association, agreed those two sectors will lead the way. “I don’t see any big changes there.”

She said world population growth, increased industrialization, energy and food needs mean potash and uranium will continue to be high in demand. Continue Reading →