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BHP Billiton (ASX, NYSE: BHP) (LON: BLT) is reportedly crafting detailed plans to export potash directly from its Jansen mine in Saskatchewan, Canada, bypassing Canpotex, the country’s marketing agency for the commodity.
The company, which committed a $2.6-billion investment in its potash mine this week, will use Canadian Pacific Railway Ltd. across Western Canada, then connect to Burlington Northern Santa Fe Corp.’s train system through Washington State, according to The Globe and Mail.
Although the miner is still working out the shipping logistics, evidence indicates it will be using the Port of Vancouver’s Terminal 5, in Washington, which was selected by the company as its preferred site for a new potash-export facility in 2010.
The port originally anticipated securing a final lease deal with BHP at the end of last year, with construction following shortly thereafter. However, the slump on global demand for commodities forced the miner to postpone its plans.
Since BHP has vowed all along not to Canpotex, analysts see the firm’s direct sales plan as an extra pressure to the cartel-like dominance of both, the Canadian marketing firm and the Belarusian Potash Co.. These consortiums have, for decades, let major potash producers get better prices for their product than if they were to negotiate individually.
“One of BHP’s strengths is its centralized marketing organization, and the company plans to use this platform and its freight, supply chain and distribution expertise in potash,” a BHP spokesman was quoted as saying. “BHP can also draw on its experience in important centres of demand like China and India.”
A potash export-facility isn’t the only project scheduled for the port’s 218-acre Terminal 5.
It’s also where refiner Tesoro Corp. (NYSE: TSO) and Savage Companies expect to build part of a controversial oil terminal capable of handling as much as 380,000 barrels of crude per day — the largest in the Pacific Northwest.
2 Comments
Chris Armstrong
That is exactly what you would expect from a giant criminal organization like BHP that believes it is above the laws of the land!
sailormac
The 2.8 billion BHP annouced for their Jensen project is not going to build them an 8 million t/y mine. It’s going to allow them to complete what they have already started. Don’t expect to see any production from Jensen until 2020 at the earliest. BHP is not going to shut down Canpotex.