K+S Potash Canada, a unit of Germany’s K+S Ag Group, broke ground June 19 on its new Legacy potash mine in southern Saskatchewan. K+S Chairman of the Board of Executive Directors Norbert Steiner and Saskatchewan Minister of Resources Tim McMillan both gave the start signal for the construction work to begin.
“The Legacy Project is of the utmost importance to us,” said Steiner. “We are convinced that Legacy is a decisive strategic step forward for the whole K+S Group and, in combination with our German potash mines, will significantly strengthen the international competitiveness of K+S.”
“This is certainly a great day for the people of Saskatchewan,” said McMillan. “For the first time in 40 years, a brand new potash mine will be built in our province. The jobs and economic development from this project will help us to continue to grow our economy, and keep the Saskatchewan Advantage.”
K+S says the preparatory work for establishing the infrastructure and the first stage in extraction operations, which have already been underway since 2011, are almost completed. K+S says it will spend C$3.25 billion in the first two phases of the new mine, which will use solutions technology. The company says the first volumes should be available at the end of 2015, and that the 2 million mt mark will be achieved in 2017. This will be followed by the gradual expansion of production capacity to 2.86 million mt/y by 2023. In the third expansion phase, a total output of a maximum of 4 million mt/y would then be possible about ten years later.
K+S hopes to utilize the extra production to give it more access to the international markets. Whether the company will ever be able to participate in Canpotex, the Canadian potash export organization, is a big question mark, as participation by K+S could run afoul of German antitrust regulations.
K+S initiated a “friendly takeover” of junior company Potash One in late 2010 in order to gain access to the Canadian reserves (GM Nov. 29, 2010).
In the meantime, BHP Billiton, after spending several million on its own planned greenfield potash mine for Saskatchewan – Jansen – has still not pulled the final trigger on whether to proceed with that project. A board of directors decision is expected later this year. Earlier this year, speculation had been that BHP might not proceed with Jansen due to company indications that it might cut back on some of its capital expenditures. At the time, BHP was quick to deny any plans were afoot to scuttle Jansen. Last week, there was speculation that BHP might be pulling out of potash exploratory work in Ethiopia.