National Post (National Edition)
BHP entry threatens global duopoly
lured slew of mining firms to the business.
BhP will m ke fin l decision on the project in its next fin nci l ye r st rting July 1, though it h s lre dy spent uS$2-billion on its entry into the sector, spokesm n s id.
Priv tely held euroChem is lso building two mines in russi , nd Germ n producer K+S is developing one in C n
d ’s pot sh-rich S sk tchew n province, both set to open in 2016-2017.
All of which poses big thre t to the duopoly’s grip on the m rket, s id senior offici l t pot sh producer.
Mos ic nd ur lk li h ve both s id they would put pl nned exp nsion projects on ice if BhP went he d with J nsen.
even without the extr output from J nsen, nnu lc p
city is set to grow to 91 million tonnes in 2017 from bout 68 million in 2012, outstripping ver ge nnu l dem nd growth of 3%, ccording to Burnside. Aver ge pot sh prices h ve llen from uS$450-uS$520 tonne l st ye r to uS$400uS$430, s long del y in supply contr cts with Chin nd Indi , which ccount for round 15% of glob l dem nd, pushed producers to compete in other m rkets.
“The rosy picture p inted in the p st of continued growth of 3% to 5% doesn’t seem to be v lid ny more s some countries including Chin seem to h ve re ched s tur tion point in dem nd,” the senior offici ls id.
The recent months’ slowdown h s pitted C npotex g inst BPC nd member g inst member within the two groups.
“The m rket h s ch nged signific ntly during the l st ye r nd h lf. Now everyone is b ttling with e ch other, the m rket is not disciplined nymore,” source f mili r with ur lk li nd Bel rusk li s id.
According to industry sources, BPC w sc ught off gu rd when C npotex signed
six-month se borne supply contr ct with Chin on New ye r’s eve 2013, sl shing prices to uS$400 tonne, uS$70 tonne below the previous contr ct.
“C npotex s crificed price for volume. They were under pressure from investors fter long del ys in the contr cts with Chin nd Indi ,” one source s id.
f
BHP Billiton’s Jansen operation in potash-rich Saskatchewan.