Twitter

Saskatchewan Mining

Premier Wall says he expects head-office pledge to be honoured after PotashCorp-Agrium merger – by Alex MacPherson (Saskatoon StarPhoenix – August 31, 2017)

http://thestarphoenix.com/

Saskatchewan Premier Brad Wall says he expects that the “spirit and the letter” of Potash Corp. of Saskatchewan Inc.’s pledge to the province in the wake of BHP Billiton’s failed takeover bid will be reflected in Nutrien Ltd., the company that will be formed when PotashCorp and Agrium Inc. merge later this year.

To that extent, the outgoing premier said, Saskatchewan’s new energy and resources minister Nancy Heppner will in the coming weeks contact Saskatoon-based PotashCorp and Agrium, which is headquartered in Calgary, to ensure the new firm’s head office will in fact be located in Saskatchewan.

“We want to ensure that Saskatchewan, as the head office for this company, has the maximum number of head office jobs, that the presence in this province is indisputably the head office,” Wall told reporters Wednesday at Government House in Regina after shuffling his 17-member cabinet.

Read more

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.

Read more

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.

Read more

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.

Read more

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.

Read more

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.

Read more

Cameco wins procedural victory in offshore ‘transfer pricing’ tax battle – by Drew Hasselback (Financial Post – August 15, 2017)

http://business.financialpost.com/

Cameco Corp. has defeated the Canadian government’s attempt to force about 25 of the company’s senior executives to submit to questioning on how the company uses offshore entities to reduce its tax bill.

The Minister of National Revenue sought a federal court order that would have compelled a long list of the company executives, including current chief executive Tim Gitzel and former CEO Gerry Grandey, to be interviewed by Canada Revenue Agency staff.

The Minister’s request relates to audits of Cameco’s 2010, 2011 and 2012 tax returns. In particular, the CRA says it wants more information on how Cameco uses foreign subsidiaries to reduce its tax bills. The process is called “transfer pricing,” and Canada has rules on when and how it can be done.

Read more

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.

Read more

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.

Read more

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.

Read more

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.

Read more

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.

Read more

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.

Read more

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.

Read more

Mining Giant Hunts for Diamonds in the Canadian Forest – by David Stringer (Bloomberg News – July 18, 2017)

https://www.bloomberg.com/

Rio Tinto Group’s pursuit of new diamond output to tap rising demand in Asia is focusing on an unheralded exploration project in the Canadian forest.

The world’s second-biggest miner on Tuesday added the Fort a la Corne joint venture, about 60 kilometers (37 miles) east of Prince Albert in Saskatchewan, to its published list of advanced projects after striking an agreement last month to take as much as a 60 percent stake.

The venture’s Star-Orion South project holds an estimated diamond resource of 55.4 million carats and has potential development costs of about C$2.5 billion ($2 billion), according to 2015 filings by developer, Saskatoon-based Shore Gold Inc.

Read more