Companies sowing the seeds of future growth
Potash producers look forward to bullish future with rising demand and new projects
As they wrestle with low prices and a giant new mine opening this year, potash producers say they are merely keeping up with long-term demand for their commodity.
Helping meet that demand will be K+S Potash Canada’s $4.1-billion 20-cavern solution mine near Bethune. The mine, which will produce two million tonnes, took another step toward production earlier this month when it was handed over to the operations team at a special ceremony. Known as its Bethune mine, production of its first marketable tonne of potash is expected to begin in June.
“With our new location, we are making a huge step forward in the internationalization of our potash business,” said Norbert Steiner, chairman of the K+S board of directors, in a release on May 2, the day of the ceremony. “Bethune enables us to participate in future market growth, reduce our average production costs and strengthen our international competitiveness, which will benefit the entire K+S Group.”
It was a big step for K+S Potash Canada, which came to Saskatchewan in 2011. Construction of the Legacy Project began in June 2012.
This past March the company took possession of its first batch of 177 custom-built railway cars. When all 531 cars are delivered, the company will have three full trains able to cycle between the mine and its storage facility in Port Moody, B.C.
The Bethune mine is the largest single project in the history of K+S and creates more than 400 permanent jobs in Canada.
Steffen Brill, KSPC senior manager in logistics and transportation, said in a release that the 531 rail cars will be sufficient to meet initial requirements for transportation to Port Moody, but additional cars will be required as production starts to ramp up later in the year.
“Once the trains arrive at our facility in Port Moody, they will be unloaded by automatic conveyor to our warehouse or directly onto a ship at one of the world’s most modern potash handling facilities,” said Brill. “From there, they’ll be shipped to regions worldwide.”
Another Saskatchewan potash producer marked a milestone in 2017 when The Mosaic Company struck pay dirt.
Mosaic has been sinking its new K3 shaft at its Esterhazy mine, 220 kilometres northeast of Regina, since 2013. Earlier this year the $3-billion project hit potash.
“We hit potash at our K3 project on Feb. 16, and that’s been the work of five years, and so now we are focused on horizontal mine development,” says Sarah Fedorchuk, senior director of public affairs with Mosaic. “It’s going to be the biggest mine in the world, so we obviously have a lot of faith that the long-term fundamentals of our business are there, and we plan on being in Saskatchewan for a long time.”
Like other potash miners in the province, Mosaic has faced a delicate balancing act as it increases capacity while trying to keep costs low in an environment where the price of potash has plummeted from record highs of nearly US$900 per tonne in 2008 to its current price of about $214 per tonne.
Last summer, Mosaic shut down its Colonsay mine east of Saskatoon, putting 330 workers out of work for six months.
“Having a temporary shutdown like we did last year is never an easy decision, and we realize that we’re impacting employees and their families, and it’s not something we take lightly,” says Fedorchuk. “But we were able to bring our employees back earlier than originally anticipated, and the mood is good.”
In fact, she says the mood is good for all Mosaic employees in the province for two reasons: the firm’s continued connection with the CFL’s Saskatchewan Roughriders through the sponsorship of the new Mosaic Stadium in Regina, and because the company continues to grow, as evidenced by its US$2.5-billion purchase of Vale’s fertilizer assets in South America.
Mosaic will acquire mines and fertilizer plants in Brazil and Peru,
With our new location, we are making a huge step forward in the internationalization of our potash business. NORBERT STEINER, chairman, K+S Potash Canada’s board of directors