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Potash/Phosphate

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.

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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.

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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.

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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.

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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.

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Potash Corp. sees rising demand in North America, overseas markets – by Pav Jordan (Globe and Mail)

Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

The clouds are parting over the global potash market, the world’s largest producer of the crop nutrient says.

After four consecutive quarters of falling profit, Potash Corp. of Saskatchewan said Thursday it’s seeing higher sales to China, Latin America and India as customers are lured back by low prices after a buyers’ strike last year.

“We believe we are in a recovery year this year,” Bill Doyle, the ever-optimistic chief executive officer of Potash Corp. and the industry’s most vocal champion, said on a conference call with analysts on Thursday. “The impact was evident in our first-quarter earnings.”

Global potash demand slumped hard last year as key consumers in India and China delayed signing new contracts with producers for months, resisting high prices for the nutrient used to strengthen plant stalks against drought and disease. The impasse ended in December when Canpotex Ltd., the joint venture of Potash Corp., Agrium Inc. and Mosaic Co. that sells potash outside of North America, agreed to significantly lower-priced long-term contracts.

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Brazil on cusp of domestic potash and phosphate revolution – by Simon Rees (MiningWeekly.com – April 25, 2013)

http://www.miningweekly.com/

TORONTO (miningweekly.com) – Fertilisers and their increased application will be vital in driving Brazil’s status as a global agricultural powerhouse. The country is already the world’s fourth-largest consumer, according to Reuters.

Rather than rely on imported raw material for fertiliser production, Brazil’s government is keen to facilitate the growth of a robust domestic potash and phosphate industry. Several significant projects are already in various stages of development, including those being advanced by MBAC, Brazil Potash and Verde Potash.

MBAC is close to bringing on stream its Itafós project, located in the vast Cerrado area, Brazil’s new agricultural frontier.

Construction work is just more than 90% complete, with proven reserves standing at 15.9-million tons and probable reserves at 48.9-million tons. Life of mine is estimated at 19 years, with an average ore grade of 5.08% P2O5 (phosphorus pentoxide). Yearly output is estimated at an initial 500 000 tons single super phosphate (SSP).

“We’ve accomplished a lot over the last four years: we’ve drilled over 75 000 m; obtained the necessary permits and filed the necessary technical reports; [and] secured financing in difficult market conditions,” MBAC VP corporate development Steve Burleton told Mining Weekly Online.

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Resource boom fuels Saskatchewan’s soaring economy – by Greg Quinn, Bloomberg News/Regina Leader Post – April 22, 2013)

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

Kylan Dales gave up a banking career to work out of a mobile office and plow his pickup truck through snow in Saskatchewan’s oilfields.

The 30-year-old’s starting salary as a field operator for PetroBakken Energy Ltd. matched what he made as a retail marketing consultant at Servus Credit Union. Dales’s career shift reflects a “rotation” of demand that Bank of Canada Governor Mark Carney says the economy needs – toward business investment and exports and away from consumer spending.

While most of the country faces sagging growth and slowing labour markets, Saskatchewan is benefiting from corporate investment aimed at tapping global demand for natural resources.

Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market capitalization, has expanded capacity. Cameco Corp., and Canada’s biggest uranium producer, is building its Cigar Lake mine atop the world’s largest undeveloped high-grade uranium deposit.

“There is more going on in this province now than I have ever seen,” said Gavin Semple, 67, chairman of Regina farm-equipment maker Brandt Industries Ltd. “Whether it’s population growth, investment, almost any criteria that you want to use to measure, this is a high point,” said Semple.

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