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Mosaic announces $1.7B potash mine expansion
Published Monday, March 9, 2015 11:45AM CST
Last Updated Tuesday, March 10, 2015 7:46AM CST
Mosaic Co. has announced it will spend $1.7 billion to expand its K3 potash mine near Esterhazy, Sask.
The company says it plans to accelerate the production ramp-up of the mine over the next eight years.
During that time, an average of more than 300 skilled contract tradespeople will be working at the site, and as many as 600 workers will be on site during peak construction.
Mosaic expects to begin mining potash ore at K3 by late 2017. The project will serve as a satellite mine for the milling and storage facilities that were upgraded during the previous Esterhazy Stage 1 expansion.
Saskatchewan Premier Brad Wall was on hand for the announcement in Regina on Monday.
Wall said Saskatchewan will rely on a diversified economy during what he calls "uncertain times" in the energy sector.
"We'd like to see other sectors of the economy ... pick up some of the slack so to speak."
Wall said that investment in Saskatchewan's potash industry has totalled more than $17 billion since 2007. Mosaic previously invested $1.5 billion in the Esterhazy mine in 2009.
Saskatchewan is expecting a revenue shortfall of between $600 million and $800 million this year due to low oil prices that tumbled for a time into the US$40s a barrel, but have been hovering around US$50 in recent weeks.
"We need to continue to diversify," Wall said. "The potash industry has played a starring role in the growth story that is our provincial economy."
In January, a report from the University of Calgary criticized the province's potash royalty structure for being "alarmingly inefficient."
The report, from the university's School of Public Policy, said while Saskatchewan produces almost one-third of the world's potash, its tax on the resource isn't competitive on an international level.
Wall said he agrees the system is complex, but added "it's hard to argue with results."
The government would be prepared to sit down with stakeholders to review potash royalties, taking investment interests into account, he said
"There will never be surprises because (companies) are making billions of dollars of investment," he said. "We wouldn't want to jeopardize that."
The premier added that the province is well-positioned for long-term growth, because it can provide energy and food to the international community.
Wall has said the upcoming budget is the most difficult his Saskatchewan Party government has had to put together.
With files from The Canadian Press