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Saskatchewan Mining

Billiton weighs mine expansion – by Scott Larson (Saskatoon Star Phoenix – April 11, 2013)

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

BHP Billiton still has plenty of work to do on its proposed $12-billion Jansen potash project before it can take the next step and submit the project to its board for final approval. The Australian mining giant has said it will hold off giving the green light to any major new projects, including Jansen, until at least June 30.

At a Bloomberg conference in Sydney on Wednesday, BHP’s chief financial officer, Graham Kerr, indicated the Jansen project could be presented to the board in the next financial year. That means the Jansen project could go before the board early as this July or as late as June 2014.

A recent story in the Sydney Morning Herald said Jansen is “likely to be among those considered first” once the freeze has been lifted.

BHP spokeswoman Bronwyn Wilkinson said there is still a substantial amount of work to be done and no time frame has been set as to when the Jansen project will be presented to the board for approval.

“The Jansen project is in feasibility study phase and remains subject to BHP Billiton board sanction,” Wilkinson said. BHP’s decision to increase Jansen’s first phase from its initial production of two million tonnes per annum (2mtpa) of potash to at least 4mtpa “requires extensive additional engineering design, particularly on the surface infrastructure.”

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Canadian uranium industry a step closer to trading with India – by Henry Lazenby (MiningWeekly.com – April 10, 2013)

http://www.miningweekly.com/page/americas-home

TORONTO (miningweekly.com) – The Mining Association of Canada (MAC) said it supported the Canadian Nuclear Safety Commission and India’s Department of Atomic Energy finalising and signing the Appropriate Arrangement for Nuclear Cooperation agreement on Monday, which placed the Canadian uranium industry one step closer to trading with India.

“This is tremendous news for Canada’s uranium mining industry, which is the second largest in the world. This puts Canada in position to capitalise on growing global demand for nuclear energy and opens up the uranium sector to India, which is a large and strategic emerging market for the commodity as a key source of power,” MAC president and CEO Pierre Gratton said.

Finalising the arrangement followed on the heels of the Agreement between the Government of Canada and the Government of India for Cooperation in the Peaceful Uses of Nuclear Energy.

The arrangement outlined the tracking, monitoring and reporting requirements that would ensure the material is used for peaceful civilian purposes only. It was the next step towards full implementation of the Nuclear Cooperation Agreement (NCA) between Canada and India, which was signed in 2010.

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Saskatchewan seeks to spur uranium expansion with royalty cut – Rod Nickel (Reuters U.S. – March 22, 2013)

http://www.reuters.com/

WINNIPEG, Manitoba, March 22 (Reuters) – The Western Canadian province of Saskatchewan is cutting its tax on uranium mining in hopes of spurring construction of more mines and boosting its revenues, a top government official said on Friday.

The provincial government is proposing the first changes in 12 years to its system of charging royalties to uranium miners, calling the old formula a barrier to investment. Low uranium prices in the two years since the Fukushima meltdown in Japan have led to delays in some mine projects, but miners see a brighter outlook as new reactors are built.

The adjustments would save the two uranium miners in the province, Cameco Corp and Areva SA, only a combined C$15 million ($14.7 million) in Saskatchewan’s fiscal year 2013-14.

But those savings are set to grow as the formula will reflect the miners’ actual costs in future years, and remove some of their risk from unforeseen events, said Kent Campbell, deputy minister of Saskatchewan’s Ministry of the Economy. “The biggest thing is it helps to de-risk projects,” Campbell said in an interview.

“It was very clear that (miners) felt the economics of future greenfield projects would not work if the system was not changed.”

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NEWS RELEASE: Harper Government supports development of first ever on-reserve potash mine

TRADING SYMBOL: TSXV: EPO

VANCOUVER, March 19, 2013 /CNW/ – Encanto Potash Corp. (“Encanto” or the “Company”) (TSXV: EPO and OTCQX: ENCTF) along with The Honourable Bernard Valcourt, Minister of Aboriginal Affairs and Northern Development and Muskowekwan First Nation Chief Reginald Bellerose today announced an important milestone in the development of the first on-reserve potash mine in Canada.

The Muskowekwan First Nation potash mine project has been accepted by the federal government under the First Nations Commercial and Industrial Development Act (FNCIDA). The Act will enable the federal government to enact regulations that incorporate a provincial regulatory regime to govern commercial and industrial activities within a province.

The federal government and the Muskowekwan First Nation will begin discussions with the Province of Saskatchewan to explore a potential regulation under FNCIDA relating to the proposed mine.

“I am pleased to announce that the Muskowekwan First Nation potash project is a step closer to becoming a reality,” said Minister Valcourt. “The development of the first on-reserve potash mine in Canada will create employment and economic growth as well as other long-term benefits for the First Nation and surrounding communities. I applaud the community and its leaders for their vision and commitment to the long-term prosperity of the Muskowekwan First Nation.”

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Canada supports development of first ever on-reserve potash mine [in Saskatchewan] – by Henry Lazenby (MiningWeekly.com – March 20, 2013)

http://www.miningweekly.com/page/americas-home

TORONTO (miningweekly.com) – The Canadian federal government and the Muskowekwan First Nation on Tuesday announced the Muskowekwan First Nation potash project had been accepted by the federal government under the First Nations Commercial and Industrial Development Act (FNCIDA), which enables the federal government to enact a provincial regulatory regime to govern commercial and industrial activities within a First Nation reserve.

First Potash Ventures, a partnership between Encanto Potash and Muskowekwan Resources, was working toward developing the mine on the First Nation’s reserve, located 100 km north-east of Regina. The mine was expected to produce up to 2.8-million tons of potash a year over a 50-year-plus lifetime.

The project is expected to provide economic opportunities for the Muskowekwan First Nation, as well as the surrounding area, by providing training and employment opportunities during the construction and operation of the mine.

While the project would become the first on-reserve potash mine in Canada, the proposed Muskowekwan project is the first in Saskatchewan to use FNCIDA to regulate a project on reserve lands.

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Cigar Lake nears startup as uranium price recovers – by Pav Jordan Globe and Mail – March 6, 2013)

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.

Cameco Corp. is just months away from opening its Cigar Lake uranium project, the world’s second-largest high-grade uranium deposit, more than thirty years after it was discovered and just as global prices for the nuclear fuel show promise of a rebound.

“We’re on track with Cigar Lake. We said we’d be starting the mining in mid-2013 and we will and we’ll have first production from the mill in 2013,” said Tim Gitzel, chief executive officer of the Saskatchewan-based owner of uranium projects in Canada, the United States, Australia and Kazakhstan.

“It’s been a long project. A long time. That ore body was discovered in 1981 and here we are now, not decades or years but mere months away from first production, so we’re pretty excited about it,” he said on the sidelines of the annual Prospectors and Developers Association of Canada (PDAC) conference in Toronto.

Cigar Lake will supply uranium for some 20 or 30 years. Cameco, the world’s biggest publicly traded uranium producer, is the 50 per cent owner of the northern Saskatchewan mine, which has ore grades that are among the world’s highest, at 100 times the world average.

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Saskatchewan potash royalty system ‘a mess:’ report – Canadian Press (Globe and Mail – February 8, 2013)

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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Potash Corp. sees profit plummet as sales to Asian markets slide – by Pav Jordan (Globe and Mail – February 1, 2013)

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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Potash miners settle antitrust claims – by Peter Koven (National Post – January 31, 2013)

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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Alberta’s tiny Karnalyte takes on potash’s global giants – by Pav Jordan (Globe and Mail – January 10, 2013)

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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A Canadian prairie game-changer: BHP bets big on potash – by Pav Jordan (Globe and Mail – December 10, 2012)

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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China eyes Canadian potash, fertilizer sectors – by Jason Fekete (Calgary Herald – November 2, 2012)

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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Israel wants details on Potash Corp. bid for Israel Chemicals Ltd. – by Pav Jordan (Globe and Mail – November 3, 2012)

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 Inc. has been asked by Israeli authorities to clarify its intention to acquire parts or all of Israel Chemicals Ltd., one of the country’s largest companies and a key supplier of potash to Europe.

Israel’s Finance Ministry told the Canadian fertilizer giant that it would only make a recommendation on a potential merger once a detailed application is submitted, according to a report by Bloomberg News.

The ministry could not be reached for comment about the report, which came a day after statements from Tel Aviv that there was no deal under consideration.

Saskatoon-based Potash Corp. already holds a 14-per-cent stake in ICL, a $16.4-billion company and one of the few major producers of the crop nutrient that is not part of the world’s two marketing groups. The other major supplier to Europe is K+S, which is also independent.

Most of the world’s potash supply is in the hands of Canpotex, the international marketing arm of producers that include Potash Corp., Mosaic Co. and Agrium Inc., or Canpotex’s Russian counterpart Belarus Potash Co., the trading joint venture of Uralkali and Belaruskali.

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Potash Corp. eyes Israeli rival by Pav Jordan (Globe and Mail – November 1, 2012)

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 Inc., facing sharply lower demand in India and China, is setting the stage for a possible takeover of Israel Chemicals Ltd., in a politically sensitive move aimed at securing new markets for the world’s biggest producer of the crop nutrient.

Potash Corp., the world’s largest fertilizer maker, is looking to buy either all or a part of Israel Chemicals Ltd. (ICL), a $16.4-billion company in which it already owns a 14-per-cent stake.

“Discussions have occurred with Israeli government officials around potential options to increase our ownership stake in Israel Chemical Ltd.,” Potash Corp. said in a brief statement, in response to news out of Israel that it was in merger discussions.

The politically charged talks have involved state officials including Israeli Prime Minister Benjamin Netanyahu, underscoring the importance of ICL – which holds mining rights to the Dead Sea – to the government, which has a golden share in the company.

A merger would put key state assets into the hands of the fertilizer giant at a time when its production capacity is growing but it needs to find new markets. A merger would put key state assets into the hands of the Canadian fertilizer giant at a time when it is already targeting large organic capacity growth.

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Potash Corp appeals to Israel to allow deal for rival – by Steven Scheer (Reuters Canada – October 31, 2012)

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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