It plans to invest “substantial capital” to bring the mine back into production, the company said in a statement.

The acquisition includes a processing plant in Matheson, Ontario, and various other mineral properties in the province. Infracon chief executive officer Geoff Hampson will head the operation through a subsidiary company called KAP Minerals.

Agrium closed the open-pit mine around 2013, according to a report in Northern Ontario Business. At the time, Agrium said the mine would be nearing depletion.

Infracon Construction said KAP Minerals plans to commercialize the Apatite deposit, a high-quality phosphate deposit in the Cargill Township Carbonatite Complex.

The company said it plans to work with Taykwa Tagamou Nation to establish a benefits agreement to provide employment and contracting opportunities for First Nation-owned businesses in the region.

Earlier this year, Fox River Resources Corp proposed the Martison Phosphate Project northeast of Hearst, Ontario.

Canada depends on imports of phosphorus to meet domestic need. Western Canada consumes about 892,000 tonnes of actual phosphorus per year, while Eastern Canada consumes about 202,000 tones of actual phosphorus, according to a 2022 report from the Canadian Agri-Food Policy Institute (CAPI).

In that report, CAPI said the limited supplies and suppliers of phosphate fertilizers are “increasingly perceived as a source of vulnerability in a more volatile world.”

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“We are more than happy and willing to work with partners. We don’t need a partner though,” Ragnar Udd, BHP president of minerals for the Americas, said in an interview with Reuters. “So it has to be really about what’s that partner actually going to be contributing to the mix.”

BHP last month said it was looking at accelerating its Jansen, Sask. project by a year amid tight global potash supplies after Russia’s invasion of Ukraine. Prices of the crop nutrient have soared since Western sanctions were imposed against Russia over the invasion.

Nutrien, the world’s biggest potash producer and based in Saskatchewan, last week said it plans to boost capacity by 20 per cent by 2025.

Nutrien interim CEO Ken Seitz told Reuters that he has had no discussions with BHP since taking that job in January.

Russia and Belarus, which also faces sanctions, are the world’s second- and third-largest potash producers, while Canada is No. 1.

Prior to the sanctions, some analysts said potash output looked well-supplied. But Udd said steady global demand growth for potash appeals to BHP, and planned expansions of eastern European mines now look to be in jeopardy.

Jansen’s first phase is estimated to cost up to US$5.7 billion with annual capacity to produce 4.4 million tonnes, starting as soon as late 2026.

“Are we contributing to a glut? That remains to be seen,” Udd said, adding that BHP eventually wants to be the market leader.

Jansen’s mine shafts are designed for capacity of 16 million tonnes annually, Udd said.

Canada will invest up to $100 million in Jansen’s development as a low-emissions mine, federal Industry Minister Francois-Philippe Champagne said earlier on Monday.

“We know how critical potash is for our country when it comes to food security,” Champagne said.

BHP, in a partnership with Sandvik AB, is planning to install new mining systems at the mine that are expected to reduce environmental impact by using 60 per cent less equipment underground than traditional potash mines, Udd said.

Reuters, citing a source, has reported that the investment will allow BHP to use electric vehicles and equipment.

— Reporting for Reuters by Ismail Shakil and Rod Nickel.

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BHP announced Tuesday it is going ahead with its Jansen potash project, which is expected to cost $7.2 billion in the first phase.

The mine will produce 4.35 million tonnes of potash per year from 2027, BHP said. Potash is a key element in plant nutrition that also makes crops more drought resistant.

Canada produced 21 million tonnes in 2019, accounting for more than 31 per cent of global supply.

“It will take another decade for Jansen to have significant production,” Ken Seitz, chief executive of Nutrien Potash said in a statement.

Nutrien expects global demand to grow by two to three per cent per year until close to 2030. The company is also seen as an ideal partner to dilute BHP’s risk and development costs. BHP says it is open to but not in need of a partner, while Nutrien has said that any tie-up with BHP is not its focus.

Global potash demand by 2030 is likely to be more than sufficient to absorb additional supply from Jansen, said Morningstar analyst Seth Goldstein, as farmers in Asia use more of the crop nutrient.

“Potash has one of the best demand outlooks of any fertilizer out there,” Goldstein said.

This month Washington imposed sanctions on Belaruskali OAO, one of Belarus’ largest state-owned enterprises and among the world’s biggest producers of potash. Belarus Potash Co. (BPC), the exporting arm of Belaruskali, warned the move would lead to global potash price increases.

Jansen is expected to create 3,500 jobs annually during construction and employ 600 permanent operating staff.

Saskatchewan Premier Scott Moe on Tuesday described the Jansen mine as the largest private economic investment in the province’s history.

— Nia Williams is a Reuters reporter in Calgary.

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Winnipeg grain firm Richardson International announced last Tuesday it has bought full ownership of Control Chemical Corp. for an undisclosed amount.

Control Chemical is billed as a specialized manufacturer of environmentally safe drilling fluids and proprietary vegetable oil-based lubricants, used in mining and resource extraction processes such as diamond drilling, horizontal directional drilling and rotary and percussive drilling.

The company’s Matex products include downhole lubricants, specialty polymers, foams, tool lubricants, blast hole stabilizers, thread compounds and non-alcohol freeze control fluids.

Given their capacity to withstand high temperatures, canola oil-based lubricants are “recognized for extending tool lifespan, optimizing production processes, and improving drilling core recovery and pathway stabilization,” Richardson said.

“This partnership will be beneficial to both companies, as historically speaking, Richardson is our largest supplier of crude canola oil,” John MacPhail, Control Chemical’s retiring principal, said in Richardson’s release.

“With petroleum oil prices increasing, we are in a unique position to reach new and more expansive markets for environmentally safe downhole, torque-reducing lubricants.”

For Richardson, which has been a minority shareholder in the company and supplied it with raw ingredients for “over 30” years, the deal marks “a unique opportunity to diversify our business and expand into innovative products derived from the core commodities we handle,” Darrell Sobkow, Richardson’s senior vice-president for processing, food and ingredients said in the same release.

Richardson’s oilseed crush plant at Lethbridge, Alta. will keep on supplying crude canola oil stock for Control Chemical products, which it makes at a 50,000-square foot plant in southeast Calgary and sells worldwide. — Glacier FarmMedia Network

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The world’s biggest miner has estimated the project at Jansen, about 45 km southeast of Humboldt, would cost up to $5.7 billion in its first phase (all figures US$). The project offers diversification into agriculture markets given that potash is a key element in plant nutrition that also makes crops more drought resistant.

“We are considering two options in terms of the port. One is a commercial option at the port of Vancouver, one is a greenfield option,” said Ragnar Udd, president of BHP’s Minerals America.

“We would like to have those locked in before we take them to the board,” he said.

“We continue to expect that this (decision) will occur in the next, coming few months.”

The miner expects the project will take five years to develop and have an annual production capacity of around 4.4 million tonnes of potash in its first phase. It will have capacity for an additional 12 million tonnes in stages thereafter for a life of 100 years.

Udd was speaking to investors about the outlook for the potash market, for which BHP expects demand to catch up with supply by late this decade or early next.

BHP estimated global production of potash was 76 million tonnes in 2020, which could rise to 86 million when factoring in latent capacity.

It expects demand to grow by 15 million tonnes to around 105 million by 2040, or 1.5 to three per cent a year, along with the global population and pressure to improve farming yields given limited land supply.

BHP sees operational expenditure at the Jansen potash mine at $100 per tonne and sustaining capital expenditure at $15 per tonne. It sees incentive pricing for new projects at $300 to $500 a tonne, with Canada the main supplier.

— Reporting for Reuters by Melanie Burton.

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BHP, in an operational review document released Tuesday for its quarter ending Sept. 30, said its board has approved another $272 million to complete the watertight concrete and steel shaft linings for its “Stage 1” potash mining project at Jansen, Sask., about 65 km southeast of Humboldt (all figures US$).

The added funding, which brings the total budget to $3 billion, comes as the project “remains on track” to be presented to the company’s board for a “final investment decision” sometime in mid-2021.

The budget boost, BHP said Tuesday, is “a consequence of the challenges encountered earlier with placement of the shaft lining and then the more recent impacts from our COVID-19 response plan.”

BHP earlier this year had cut back its final shift lining work to focus on one shaft — “as part of our COVID-19 response plan to reduce our on-site interprovincial workforce,” the company said — but resumed work on both its 1.005-km-deep service shaft and 975-metre production shaft at Jansen in June.

While the board’s final decision is yet to be made, BHP said the Jansen operation “remains well positioned with attractive medium- to longer-term commodity fundamentals, and is set to be a high-margin, low-cost, long-life asset with multiple basin-wide expansion opportunities.”

That said, “as always, we will be disciplined about our entry into the market and it must pass our strict capital allocation framework tests.”

BHP said it’s also still choosing a port option somewhere on North America’s west coast, from which it would export potash produced at Jansen.

The Jansen project, which BHP has had on its radar since 2009, has been due to go to BHO’s board for final approval as far back as 2013. The company had said in October 2019 it expected to present the project to its board around February 2021.

If granted, such an approval would see an estimated $17 billion spent to fully develop the Jansen mine.

BHP, in making a business case for the mine, had projected in May last year that the world’s excess potash supply capacity will be used up by the middle of the next decade.

The Jansen site is one of five major projects BHP has underway, also including petroleum, copper and iron ore operations, with combined development budgets of $10.9 billion. — Glacier FarmMedia Network

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The data from Brazil’s INPE space research agency, which showed deforestation soaring 29.5 per cent to 9,762 square km for the 12 months through July 2019, sparked an uncharacteristic admission by the government that something needed to be done to stem the tide.

It was the worst level of deforestation since 2008, heaping further pressure on the environmental policy of Bolsonaro who favours developing the Amazon region economically.

The Amazon is the world’s largest tropical rainforest and is considered key to the fight against climate change because of the vast amounts of carbon dioxide it absorbs.

Risks to the forest drew global concern in August when fires raged through the Amazon, drawing sharp criticism from France’s President Emmanuel Macron.

At a briefing to discuss the numbers, Environment Minister Ricardo Salles said the rise in deforestation showed the need for a new strategy to combat the illegal logging, mining and land grabbing which he said were to blame.

Environmentalists and nongovernmental organizations placed the blame squarely on the government, saying that Bolsonaro’s strong pro-development rhetoric and policies to weaken environmental enforcement are behind the rise in illegal activity.

“The Bolsonaro government is responsible for every inch of forest destroyed. This government today is the worst enemy of the Amazon,” said Marcio Astrini, public policy co-ordinator for Greenpeace, in a statement.

Bolsonaro’s office directed Reuters to remarks made by Salles and another official and did not comment further on the issue.

In August, Reuters reported Bolsonaro’s government had systematically weakened environmental agency Ibama, grounding a team of elite enforcement commandos and forbidding agents from destroying machinery used to illegally deforest.

Brazil’s Climate Observatory, a network of nongovernmental organizations, said the 2019 increase in deforestation was the fastest in percentage terms since the 1990s and the third fastest of all-time.

In response to the numbers, Salles vowed to roll out a series of measures to counter the rising deforestation, including stepping up enforcement efforts assisted by high-resolution satellite imaging.

The minister said he would meet governors of Amazon states on Wednesday to discuss tactics to counter deforestation.

All options are on the table, according to Salles, including mobilizing the military for use in environmental enforcement operations.

Government reversal

Salles’ recognition that deforestation is indeed on the rise comes after months of the government casting doubt on preliminary monthly data showing destruction was skyrocketing.

At multiple press briefings earlier this year, Salles alleged the monthly data was unreliable and contained inconsistencies. He had urged journalists not to report the monthly figures and wait for the annual data, announced Monday.

Bolsonaro had accused the INPE space research agency of lying about the monthly data. In a high-profile dispute, then-INPE chief Ricardo Galvao stood by the data and called Bolsonaro “a joke of a 14-year-old boy that is not suitable for a president of Brazil.” Galvao was later fired.

The annual figure accounts for seven months under Bolsonaro, but also measures five months under the previous government.

It also does not account for destruction after July. Preliminary data for August to October shows deforestation more than doubled compared to the same period a year-prior to 3,704 square km.

NGOs say they fear that protections could be weakened further as the government considers allowing commercial agriculture on native reserves, expanding wildcat mining and allowing for illegally occupied land to be “regularized.”

Beef prices are also at record highs in Brazil, leading some environmentalists to fear it could fuel land grabbing for cattle ranching — one of the biggest drivers of deforestation.

“The coming years could be even worse,” said Carlos Rittl, executive secretary for Climate Observatory.

— Reporting for Reuters by Marcelo Teixeira; writing by Jake Spring and Stephen Eisenhammer.

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Premier Brian Pallister on Wednesday announced a reorganization of his government’s ministries along with a shuffle of his cabinet in the wake of his Progressive Conservative government’s re-election last month.

The realignment sees the agriculture ministry become part of a new department, agriculture and resource development, which was described Wednesday as “an expanded department focused on agriculture and natural resources, including watershed districts, GROW programming, forestry, mining, fish and wildlife management.”

Apart from agriculture, the new ministry picks up responsibilities handled until now by the previous department of sustainable development and department of growth, enterprise and trade. The latter department’s minister, Midland MLA Blaine Pedersen, was named Wednesday to lead the new department.

Pedersen hails from Elm Creek and worked over 30 years in the cattle feeding business before becoming the MLA for what was then the Carman constituency in 2007.

He served as the Tories’ opposition critic for agriculture, food and rural initiatives from 2011 until the party returned to power in 2016; he then served as minister for infrastructure from 2016 into 2017, when he was named to handle the growth, enterprise and trade file.

As agriculture minister, Pedersen replaces Lakeside MLA Ralph Eichler, who’d held the post since 2016 and was shuffled Wednesday to lead another newly formed department, economic development and training.

The “GROW programming” now listed among Pedersen’s responsibilities refers to the $52 million Growing Outcomes in Watersheds trust.

The trust, which until now was a responsibility of the sustainable development department, was set up in June to back programming for the protection of wetlands and watershed management.

Pallister on Tuesday separately announced new GROW trust funding for three separate programs. The Seine-Rat River Conservation District and Little Saskatchewan River Conservation District each receive $250,000 to expand their ALUS Canada ecological goods and services programs, while up to $1 million goes to the TransCanada Shelterbelt Renewal Project.

Among other provincial portfolios of interest to farmers, Fort Richmond MLA Sarah Guillemard was named Wednesday as minister for conservation and climate, while Riel MLA Rochelle Squires, the former sustainable development minister, will now handle the municipal relations file.

The reorganization, Pallister said Wednesday, will “create areas of focus consistent with our priorities and our vision to move Manitoba forward.” — Glacier FarmMedia Network

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Investors have been awaiting a decision by BHP on whether to go ahead with project, which would be its most significant investment in years, and which it hopes will provide another pillar of long-term growth.

In its September production report, BHP said project planning and work to finalize a port solution was continuing and the $5 billion-plus Stage 1 will be presented to the board for an investment decision by February 2021 (all figures US$).

BHP, which has already spent $2.7 billion on Jansen, said in May it expects excess supply capacity of the crop nutrient to be used up by the middle of the next decade, while the Jansen project would create a “high-margin, long-life” mine.

Potash is a potassium-rich salt mainly used in fertilizer to improve the quality and yield of agricultural production.

Elsewhere, BHP posted a slight dip in its September quarter iron ore production due to planned maintenance at a key port, but maintained its fiscal 2020 iron ore production forecast.

The result was in line with analyst forecasts and came as the miner carries out ongoing maintenance at Port Hedland, the world’s biggest iron ore port, which is used by three of the country’s top four iron ore miners.

“Lower volumes reflected significant planned maintenance at Port Hedland, including a major car dumper maintenance program,” BHP said in a statement.

Output for the three months ended Sept. 30, BHP’s first fiscal quarter, was 69 million tonnes, down one per cent on a year ago and three per cent on the June quarter. Annual output is expected at 273 million to 286 million tonnes.

Iron ore prices have come off five-year highs touched in July as Brazil’s Vale ramped up production that had been curtailed by a fatal dam disaster, and Australian shipments are expected to moderate into year-end.

“Overall, a solid result for BHP with all key segments broadly in line with our estimates,” RBC said in a report.

“BHP’s more diverse portfolio mitigates the potential impact of falling iron ore prices…We maintain our preference for BHP over its key Australian peer Rio.”

Quarterly copper output rose five per cent on a year ago as production recovered from outages in Australia and Chile, while metallurgical coal production fell after planned maintenance shutdowns.

— Reporting for Reuters by Melanie Burton; additional reporting by Rushil Dutta and Aby Jose Koilparambil in Banaglore.

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Minnesota-based Mosaic Co. said Thursday it will “temporarily curtail” potash production at its Esterhazy mine, bringing the company’s total production curtailments up to 600,000 tonnes.

The added curtailment, the company said, is based on “increasing inventories as a result of a short-term slowdown in global potash markets” as well as “increased risks of a delay in Chinese contract settlement.”

If the “full amount” of the curtailment shows up in lower sales during the fourth quarter of 2019, the company expects it to reduce adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) by about US$150 million.

Mosaic Co. said the planned curtailment at Esterhazy isn’t expected to slow the pace of development on its K3 mine project there.

The company announced in August it would accelerate development of the “low-cost” K3 mine, at the same time as it announced a production curtailment at its “higher-cost” Colonsay mine, about 65 km southeast of Saskatoon.

The accelerated ramp-up at K3 potash project had produced over 400,000 tonnes of ore so far during fiscal 2019 up to June 30, the company said in August.

Ramping up K3 and temporarily idling Colonsay was expected to lower Mosaic’s cost of production, “accelerate inventory depletion” and avoid $40 million to $50 million in cash expenditures in 2019.

Those actions were also expected to “increase the company’s leverage to strengthening markets into 2020.”

Mosaic’s latest curtailment follows fertilizer rival Nutrien’s plans, announced last month, to shut down three of its Saskatchewan potash mines for up to two months during its fourth quarter.

“While near-term fertilizer markets remain challenging, we continue to expect a very strong application season in Brazil and North America, and a better supply and demand balance in 2020,” Mosaic CEO Joc O’Rourke said in Thursday’s release. — Glacier FarmMedia Network

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