POTASH IN OUR PROVINCE
CREATING A Potash mines $ 14 billion investment IN SASKATCHEWAN
Potash has brought billions of dollars of investment to the province and is a fundamental part of the Saskatchewan economy, according to the minister responsible for energy and resources, Tourism Saskatchewan, and trade. “The current expansions at the existing potash mines have created almost $14 billion of investment in our province,” said Tim McMillan, whose portfolio falls under the ministry of the economy. “Many of those are completed, some are underway and some are still in the planning stages.”
He said the provincial government is also excited to see new mines being built for the first time in four decades. “For a lot of years, the policy choices were not conducive to development,” explained McMillan. “In fact, the CEO of K + S Potash has said they were upset for years about the way they were treated in Saskatchewan, but today they recognize our province is the best place in the world to do business. They are now investing $4 billion to develop the first new mine in Saskatchewan since the early 1970s.”
The intense focus on potash has been a welcome development for Saskatchewan, according to McMillan. “Ten years ago, potash was a sleepy commodity,” he said. “Now it is in the news on a regular basis.”
“From what we’re hearing from the industry, this isn’t going to affect their long-term investments in the province. They are asking ‘Where is the lowest cost place in the world to produce potash?’ and Saskatchewan is very competitive.” — Tim McMillan Minister responsible for energy and resources
He attributes global interest to the demand for food as the world’s population continues to rise. “Countries like China and India, which have ever-increasing standards of living, want access to higher quality food,” he said. “Applying potash in a balanced fashion with other fertilizers is the low-hanging fruit and one of the easiest and fastest ways for farmers to become more productive.”
One of the more high profile investments currently underway is coming from BHP, the largest mining company in the world. While the company has still not given the final go ahead, it continues its plans to develop a new mine at Jansen Lake. “They have never produced potash before, but my understanding is that they view potash as a commodity with great potential over the long term,” said McMillan.
Despite recent concerns that the collapse of the former Soviet Union marketing agency would seriously affect the potash industry, McMillan claims the government continues to believe in the industry’s future in Saskatchewan. “From what we’re hearing from the industry, this isn’t going to affect their long-term investments in the province,” he said. “They are asking ‘Where is the lowest cost place in the world to produce potash?’ and Saskatchewan is very competitive. Even beyond that, when we see things transpiring in other jurisdictions that produce potash, it reaffirms how important political stability is. I think that is a big advantage for our province as well.”
He admits that a slowdown in the industry could affect the short-term bottom line, but that the diversity in natural resources with oil and gas and uranium are a great advantage for the province. “From a provincial standpoint, government potash revenues makes up about five per cent of our provincial budget,” he said. “We make best estimates going forward, but what is more important to us is our long-term investments for our province.”
He also claims that sometimes it is too easy to focus on the bottom line and ignore the other positives of the industry. “Yes, it provides 5,000 direct jobs and tens of thousands indirectly,” he said. “But potash also means prosperity in our towns and cities. It is one of the most community-focused industries in our province. The potash companies’ commitment to towns and cities in which they operate is unquestioned.”
The industry has also helped trigger a revitalization of some of the small towns throughout the province. “We struggled for too long with closing schools. Now we have the other challenge of making sure we have enough schools, and that our hospitals are appropriately sized,” he said. “In some communities, the maternity wards are the busiest part of the hospital. That is the sign of a province that is growing and has potential.”
With this rapid growth come other challenges as well, such as a shortage of labour. McMillan said the government is addressing the shortages in the potash industry the same way it is approaching the shortages in industries across the province. “From our government’s point of view it is a three-legged stool,”
“Years ago, if you marked the potash development on a map, there would be a few small circles. Now if you look at a map, research and development is everywhere.” — Tim McMillan, Minister responsible for energy and resources
he explained. The first is providing training opportunities in universities, community colleges and trade schools. He also applauds programs that link potash companies with potential First Nations employees.
The second leg of the stool is recruiting from across Canada. “We want to bring our ex-pats home,” he said. “We have seen great stories of people coming home.”
The final leg of the stool is immigration. Targeted trips to find skilled workers have been fruitful, and have helped fill some of the gaps at the mines.
McMillan expects the potash industry to continue to flourish as both major and junior companies move projects forward all over the province. “Years ago, if you marked the potash development on a map, there would be a few small circles,” he said. “Now if you look at a map, research and development is everywhere.”
With continued confidence from mining companies and a positive environment for development, he believes that Saskatchewan can remain one of the world’s key players in the potash industry. “We have tremendous resource potential. We have almost 50 per cent of the world’s potash reserves and hundreds of years of potential production,” he said. “We don’t want to miss on this great opportunity.”