K+S POTASH MINE OPENS
Five-year, $4.1-billion site complete
In describing opening day for the K+S Potash Legacy project, now known as the Bethune Mine, Premier Brad Wall didn’t downplay his words.
“Everyone in this room should take a few minutes to mark how lucky we are to be a part of history,” he told the gathered crowd for the opening ceremony.
“This is a historic day.”
The potash mine took five years and $4.1 billion in investment to complete. The first greenfield potash mine built in Saskatchewan in 40 years, it was the largest job creator in the province during its construction. Once running at full capacity, the mine is expected to produce two million tonnes of potash per year.
Eventually, the mine will produce 2.86 million tonnes of potash per year. The first tonne of potash will go out in June.
Wall praised K+S Potash, citing its decision to choose Saskatchewan over other locations.
“They operate on six continents around the globe and Saskatchewan, though we have the most, we are not the only jurisdiction with potash,” Wall said. “They have choices and they picked Saskatchewan.”
A total of 30 kilometres of new rail was also put down through the rural area to the mine.
It was the largest construction project for Canadian Pacific Railway since the 1980s. Every weekand-a-half, 177 rail cars and four locomotives will transport potash to Port Moody, B.C., for sale in Asian and South American markets.
“I am looking forward to waiting behind rail cars at a railway crossing in Swift Current,” Wall said.
“Those trains will be heading to the export markets and that will bring success to K+S and our industry.”
The project was not without its setbacks, including a major incident in June of last year when the 28-metre-tall crystallizer supporter collapsed, delaying the project by six months.
In addition, the price of potash has fallen by 50 per cent since the project first started. Despite the price decrease, the project has continued with a long-term view in mind.
“We made the investment decision in a time when prices were higher,” said Norbert Steiner, chairman of the board of executive directors with K+S Potash.
“When you are on the road to build such a big plant, you are well-advised to continue to build the plant until it is finished,” he continued.
Steiner stated that the lower cost of production at the Bethune Mine will help the company deal with lower prices for potash.
“What we experience in cost of production will be lower than the actual price,” he said. “Even if it is a lower price than a few years ago, or when we made the decision for the investment, it will be successful and accomplish what we had in mind.”
A major reason for the lower cost of production is the fact potash in Saskatchewan is very different from what is found in Germany, the home country of K+S, and often contains less foreign minerals such as sulphur.
“This will be a complementary mine from the standpoint of our marketing and sales,” Steiner said. “We don’t have so many mines in Germany that are producing potash that is the basic product we will have here.”
Asked if the company would make a different decision today than it did five years ago considering potash prices, Steiner said the right decision was made at the right time.
“I think you always need to decide at the time when the decision needs to be taken.”