Saskatchewan Mining

The 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.

Saskatoon — The Canadian Press – A tax policy expert says Saskatchewan’s potash royalty structure is a complicated “mess” and Premier Brad Wall has “his head in the sand” if he thinks it’s working.

Jack Mintz, with the University of Calgary, said in report released Friday that the current royalty and tax system for Saskatchewan’s potash industry “has actually reached the point of incoherence and absurdity.”

“It’s incredible, really,” Mr. Mintz said at a news conference in Saskatoon. “I mean I’ve worked [in] a lot of countries and this is absolutely incredible as a system. In fact, in my view it’s the worst royalty system I’ve seen in Canada.”

The report said the “tangled thicket of royalties, taxes and credits” can differ between start dates for production, projects of different sizes or even projects of similar size but with different profitability. It also has potash producers generally enjoying a much lighter tax burden on marginal investments than those in other industries, according to the report.

“The result is distortions and inefficiencies, resulting in subpar investment activity, which can only stand in the way of Saskatchewan reaching its full economic potential.”

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The 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.

Potash Corp. of Saskatchewan reported a surprisingly steep 38-per-cent drop in fourth-quarter profit, stung by slumping demand in China and India.

The sagging fourth-quarter results capped a year that saw Potash Corp. profits drop by about $1-billion from a year earlier, as shifting industry economics and volatile weather punctured the Saskatoon-based company’s bottom line.

“Agriculture is inherently an unpredictable business – from variability in weather and growing conditions to government policy changes that can affect the decisions of farmers,” the company said, after a year that saw drought sweep the United States, spoiling early predictions for a massive global crop surplus for grains and oil seeds.

“It was a shift that once again put a focus on the unpredictable nature of food production,” Potash Corp.’s chief executive, Bill Doyle, said on a conference call with analysts Thursday.

Potash Corp. shares fell 1.9 per cent on the Toronto Stock Exchange Thursday, paring losses of as much as 3 per cent earlier in the day as the company predicted 2013 would be a better year, with stronger demand and higher profits.

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

Saskatchewan’s Big Three potash producers have agreed to pay a total of US$97.5-million to settle U.S. antitrust allegations they colluded to keep prices artificially high.

The deal ends a legal battle that dates back to 2008. But despite the settlement, Bill Doyle went out of his way to express his utter contempt for the class-action proceedings.

In a lengthy statement, the chief executive of Potash Corp. of Saskatchewan derided the claims as an example of the “well-documented abuse of class actions” in the United States in which “self-interested” lawyers assert “meritless” claims because they and their clients have nothing to lose. He called it a “wasteful and unnecessary” cost of doing business in the United States.

Nonetheless, he is happy to have the matter behind him. “The reality is that we weighed the multi-year effort in time and resources that would have been required to defend this lawsuit, and determined that our management should remain focused on the production of potash and serving our customers,” he said.

Potash Corp. and Mosaic Co. agreed to pay US$43.75-million each to settle the claims, while Agrium Inc. is paying US$10-million.

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The 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.

A small Alberta company is readying a deal with a major Asian partner to help finance a potash mine in Saskatchewan, positioning itself to become one of the first new producers of the crop nutrient in Canada in years.

According to sources familiar with the situation, Karnalyte Resources Inc. is expected to ink a $45-million agreement this week that will see the small Okotoks, Alta.-based company sell a 19.98-per-cent stake for $8.15 a share.

The buyer, believed to be either a Chinese or Indian company, has also committed to a subsequent equity injection of $15-million over the next year or so and will buy potash from Karnalyte at market prices for 20 years once production begins.

The dollars involved in the deal are small, but the significance to the industry is great. The deal underscores the growing push by top consumers India and China to distance themselves from Canada’s Canpotex Ltd. and Russia’s BPC, producer groups that have long controlled most of the world’s supply amid strong profits.

Independent producers such as Karnalyte are banking on that trend and are building mines to sell potash directly into those markets. Similarly, BHP Billiton Ltd., the world’s largest diversified miner, is building a $14-billion potash mine in Saskatchewan called Jansen that will be twice the size of any other currently producing mine.

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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.

JANSEN, SASK. — Meet the Herrenknecht, a borer drill the size of a blue whale that is tearing up the Saskatchewan landscape – and with it the economics of the mining industry’s new hot commodity.

Some 32 metres long and as wide as a small house, the custom-made piece of German engineering is embarking on a journey to a point one kilometre below the province’s grain fields. There it will strike prairie gold – potash.

Jansen is slated to be the world’s largest potash mine, twice the size of its closest rival. With a total estimated cost of some $14-billion, it’s a brazen bet by Australian mega-miner BHP Billiton Ltd. that the crop nutrient will be the world’s most important mined commodity for decades as farmers struggle to boost food production for a hungry planet.

Jansen promises to drive a momentous power shift in the global potash industry, dominated for decades by groups of producers, under fire as alleged cartels, that have controlled most of the world’s supply and enjoyed strong profits.

BHP is throwing down the gauntlet on that cozy arrangement. The world’s largest mining company says it will sell its potash independently of any rival marketing group, adding a weighty new competitor to the negotiating table when major consumers seek new supplies of the fertilizer.

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

Two of China’s largest state-owned energy giants – CNOOC and Sinopec – have expressed interest to the federal government about investing in Canada’s potash sector and fertilizer production, government documents obtained by Postmedia News show.

The documents also reveal the Conservative government was aware for the past year, well before the recent controversy over foreign investment rules and the takeover bid for Nexen, that CNOOC was interested in co-operating “with other oil majors in investments in Canada.”

China was also looking for “early completion” of the Northern Gateway oilsands pipeline between Alberta and the B.C. coast currently under review by a federal panel.

As the Conservative government finalizes a new policy framework on foreign investment – and considers CNOOC’s $15.1-billion takeover bid for Calgary-based petroleum producer Nexen – it has been doing so knowing that major Chinese national oil and gas companies have been looking to invest in potash and fertilizer processing as well.

The Harper government has already blocked an attempted hostile takeover of Potash Corp. of Saskatchewan by Australian mining giant BHP Billiton.

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http://ca.reuters.com/

JERUSALEM (Reuters) – Potash Corp, the world’s No. 1 fertilizer maker, is ramping up efforts to buy Israel Chemicals Ltd, appealing directly to Israel’s prime minister to back a deal that would rank as the largest foreign takeover of an Israeli company.

Conglomerate Israel Corp, which owns a majority in ICL, said that Potash Chief Executive Bill Doyle has met Israeli Prime Minister Benjamin Netanyahu to push for a deal, while financial daily Calcalist said Netanyahu has instructed his staff and the finance ministry to examine it.

Potash Corp confirmed on Wednesday it has met with Israeli government officials, and Israel Corp said it was aware of the meetings.

“The company confirms it is aware that Canada’s Potash is in talks with various government agencies that included a meeting with the prime minister regarding examining the possibility of merging ICL with Potash,” Israel Corp said in a statement.

Israel Corp officials declined to comment further. The finance ministry said it had not received any formal request. Potash Corp already has a 13.84 percent stake in ICL, the world’s sixth-largest fertilizer producer. It made its initial investment in 1998.

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The 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.

ROCANVILLE, SASK. — Deep inside a mine, a fire is serious. Circulation systems keep air moving in a steady breeze, and smoke spreads fast. Light a cigarette in one part of the mine and it won’t be long before someone a kilometre away knows what you’re doing.

So, when the emergency system in Potash Corp.’s Rocanville mine activated alarm lights and bells just before 2 a.m. Tuesday, Jamie Johnson did not wait around. Mr. Johnson was lead hand on a three-man crew running a miner, the large machine that burrows through the earth. Flames had erupted 300 metres away in a large wooden cable reel, producing noxious smoke from plastic insulation burning on a 30-metre-long, six-centimetre-thick electrical cable.

He didn’t yet know that. He did know he had to act fast. This was only the second time he had experienced an emergency below ground in nine years.

Mr. Johnson grabbed the phone located on the miner and called the control room. He was told to move to a refuge station – number 13 in his case, or lucky 13 as he would later joke, when he and 19 other miners were brought to the surface 24 hours after their shifts started.

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

After more than 16 hours trapped underground at the Potash Corp. of Saskatchewan mine in Rocanville, Darwyn Wirth admitted he was tired. And that he wanted a cold beer.

Wirth, a shift electrician with Potash-Corp from Churchbridge, was one of 15 miners brought to the surface at 6: 42 p.m. on Tuesday. His shift started just over a day earlier at 6: 30 p.m. on Monday. At 1: 56 a.m. Tuesday morning his normal work day was interrupted when a fire broke out in the mine.

Twenty-nine miners were midway through their 12-hour shift when the fire alarm sounded. Nine miners were immediately evacuated, however the remaining 20 men sought safety in four refuge shelters throughout the mine. At 8: 15 p.m., the remaining five miners were brought to the surface.

The area where the fire broke out was 15 kilometres from the main Rocanville site and the shaft where workers enter and exit the underground mine. Wirth was the first person to spot the fire. He said at no point was he worried and described the experience as being “delayed” rather than trapped.

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