The Canpotex board of directors reported Jan. 4 that it has approved a new methodology for determining the amount of increased productive capacity resulting from such completed major mine expansions as its producers may independently decide to undertake. The aggregate productive capacities of Canpotex producers are used in determining their respective export sales entitlements through Canpotex.
Until now, Canpotex producers have had to demonstrate increases in productive capacity of existing mines from completed major mine expansions through an independently audited sustained production run of 90 operating days, scheduled at the producer’s discretion.
The new methodology will instead rely on an independent engineering firm and approved protocols to calculate productive capacity. Audit protocols employed by the independent engineer will consider historical data and designed increases tested against a set of detailed parameters. Both conventional and solution mine audit protocols will also include a short 10- to 14-day production run scheduled at the producer’s discretion to validate audit results.
Although the new audit procedures are intended to replace the need for a more sustained production run to determine increased productive capacity resulting from a completed major mine expansion, the organization said a Canpotex producer that is dissatisfied with the engineering audit results will still be able to thereafter elect to revert to the audited 90-day run procedure and have those operating results used to calculate the increased productive capacity of its mine resulting from the major mine expansion.
The new procedures also will not apply to such major mine expansions that have previously completed a 90-day production run to demonstrate the mine’s increased productive capacity, or which may be in the process of conducting a 90-day production run.
Potash Corp. of Saskatchewan Inc. said last week that its Rocanville mine will be the first Saskatchewan mine to use the methodology. It said the new process is anticipated to reduce costs and improve efficiencies, and is expected to be applied in first-half 2017. The corresponding change in sales entitlement is anticipated to take effect July 1, 2017.
PotashCorp’s current share of Canpotex shipments is 51.6 percent. The company told Green Markets last week that it could not speculate on where its share would be after Rocanville is included, as those calculations have not yet been done. The Mosaic Co.’s Canpotex share is 38.1 percent, while Agrium Inc.’s is 10.3 percent.