A brutal year for mine financing explained in just one chart

The world's largest potash producer by output said today it plans to spend $5.8B to increase capacity over the next decade to take advantage of rising potash prices. Uralkali (LON:URKA) said its expansion program includes both brownfield and greenfield mines. Brownfield projects include 1.5 million tonnes of additional capacity at Berezniki 4, increased efficiencies and removal of bottlenecks at Berezniki-2 and 3, as well as Solikamsk-2 and -3, adding a million tonnes in total, and a two-phase expansion program at Solikamsk-3, increasing its capacity by 2 million tonnes.

Stock boards were buzzing on Tuesday as traders tried to figure out why Western Potash Corp. was soaring 18.2% without any news about the $200 million firm that would drive the share higher. Despite having nothing to go on, speculators had swapped 2.3m shares by 3pm in Toronto, 1.5 times usual volumes. The junior player in Saskatchewan’s potash industry is in the pre-feasability stage of its 940 million tonne Milestone Project, but some doubt if WPX would be able to muster the finances and logistics to go up against the giants operating in the province.

Despite global economic uncertainty, resource-rich Saskatchewan should offer significant salary gains for its workers in 2012, seeing an average 3.9% increase in wages. The Conference Board of Canada's compensation outlook was released on Tuesday. Saskatchewan is the world's largest exporter of potash and uranium. It also has a significant oil and gas sector. Saskatchewan leads all provinces in wage increases, followed by Alberta at 3.6 per cent.

Passport Potash, Inc. (TSX VENTURE:PPI)(OTCQX:PPRTF) has signed a letter of intent to enter into binding agreements under which NZ Potash, LLC will sell to Passport its 50% ownership interest in HNZ Potash, LLC. Passport and HNZ Potash will strive to jointly develop their combined potash properties in the Holbrook Basin. When combined the properties will contain over 200,000 acres of mineral rights and will cover over 300 square miles. Following the release of Passport's NI 43-101 from SRK containing an exploration potential, the Company intends to jointly prepare an NI 43-101 resource report with HNZ Potash. Exploration activities of the combined companies that have been completed to date consist of over 50 drilled wells and over 100 lines miles of 2D seismic.

2Merkato reports the Ethiopian Ministry of Mines announced that five international companies have invested $6.5 billion in the Ethiopia potash mining industry which is centred in the Dalol area, part of the Danakil Depression (pictured). The five companies are G&B Central Africa Resource, Saynic Potash, Nova Potash, BHP Billiton and Toronto-listed Allana Potash. Allana has the backing of the World Bank and on Monday the company announced the latest in a string of high-grade discoveries at its 160 square km land position at Dalol.

Allana Potash Corp. (TSX:AAA)(OTCQX:ALLRF) ("Allana" or the "Company") is pleased to announce that it has intersected three zones of strong potash mineralization in Hole DK-11-28 ("Hole 28"). Hole 28 is located in the northwestern portion of the concession block and was targeted to test potash mineralization west of Hole 15. Hole 28 intersected a strong Sylvinite Zone at a depth of 198.8 metres which yielded 40.27% KCl over 3.56 metres. A robust Kainitite Zone was also intersected deeper in the hole at a depth of 266.43 metres and returned 21.98 % KCl over 8.39 metres.

The Producer Price Index rose 0.8 percent in September due to higher gas prices. Food stuffs, on the other hand, declined after a strong run up through the summer. Analysts were expecting a more modest rise in the PPI. The Producer Price Index results, released by the U.S. Bureau of Labour Statistics on Wednesday, showed that all finished energy goods were up strongly in September. "The index for finished energy goods advanced 2.3 percent in September after decreasing in each of the previous three months. Nearly seventy percent of this rise can be attributed to the gasoline index, which increased 4.2 percent. Higher prices for liquefied petroleum gas and diesel fuel also were factors in the rise in the finished energy goods index," according to the statement.

Inptrepid Potash (NYSE:IPI) said its prices were higher but its produdction was lower during its third quarter. The company was also forced to find new customers due to a severe drought in Texas. Announcing results on Thursday, the company believes that it produced between 165,000 and 175,000 tons of potash and sold between 185,000 and 195,000 tons of potash. Production, which was in-line with expectations, was hampered due to a scheduled shut-down for annual maintenance work at the East mine and plant near Carlsbad, New Mexico. Also, the Moab, Utah mine completed its summer evaporation season and commenced harvest in mid-September.

Tucson Sentinel reports the Painted Desert of northern Arizona holds hundreds of million years of history, from fossils of dinosaur ancestors to ancient Native American dwellings, but Petrified Forest National Park and the land around it also sit on as much as 2.5 billion tons of potash. The US Congress approved expansion in 2004, authorizing the park to purchase land from willing sellers. The park added the first 26,000 acres in September, but that purchase didn’t include the mineral rights because of a lack of funds.The old and new boundaries of the park are over approximately 50% of the Holbrook basin potash deposits and three companies – Passport Potash, American West Potash and HNZ Potash – currently are drilling test holes inside and outside the park to establish the depth and quality of the deposits.