Private capital won’t touch mining

Potash Corporation of Saskatchewan on Thursday announced the settlement of its litigation with Mosaic over their respective rights and obligations at Mosaic's Esterhazy mine. Potash Corp says the end of the legal battle "dovetails" with its expansion programme designed to increase production to 17.1 million tonnes a year by 2015.

Large miners, such as Rio Tinto and BHP, are looking to enter the potash business, or expand existing operations, as they look for increased demand from developing nations such China, India and Brazil.

North American stock exchanges are on a tear today after central banks made more funds available to lenders, giving investors hope for a way out of the European debt debacle. The markets were also cheered by better than expected private sector job growth in the United States. The mining-heavy S&P/TSX Composite was up 2.5% to just over 12,000 at time of writing. The Dow Jones Industrial Average gained 384 points, or 3.3%, the most on a closing basis since Aug. 11, according to Bloomberg. Spot gold was up $32 from yesterday to $1747 which is just above the 20-day moving average of $1744, noted Kitco. Silver was up marginally to $32.86 from yesterday's $31.92, while benchmark copper was up more than 5% to a two-week high of $7,885/tonne. Zinc, lead, aluminum and nickel were also up from Tuesday.

CBC News is reporting that last fall's cyberattack on government agencies looking for confidential information on PotashCorp was much larger than previously disclosed and the perpetrators seemed to be after insider information. Seven Canadian law firms were attacked, along with various government agencies. Analysts estimate that the well-coordinated attack must have involved 100 people or more. Although the attacks were traced back to China, that does not mean the attacks were carried out by that country. The Chinese government denies any involvement.

Saskatchewan's first potash mine in 40 years was approved today in the small city of Moose Jaw. German potash producer K+S Aktiengesellschaft said its supervisory board approved CAD$3.25 billion in capital expenditures to build a solution potash mine at the Legacy property, which K+S acquired from Potash One when it bought the company for $434 million nearly one year ago to the date. "The Legacy Project is a significant step towards the expansion of our potash capacities and enables us to participate in the growth of the global potash market. Together with our existing potash mines in Germany, this will considerably strengthen the international competitiveness of K+S and consequently benefit the entire K+S Group in Europe and overseas,” said Norbert Steiner, K+S Chairman of the Board of Executive Directors.

“Chinese companies that are looking to invest in Canada do not want to become a Potash-like story themselves. Face and company reputation are important,” Peter Harder, president of the Canada-China Business Council told The Globe & Mail in an interview in Beijing this week as executives gathered for the council’s annual general meeting.

A joint venture between uber-miner Rio Tinto and Chinese partner Chinalco was finalized on Friday. The JV, called CRTX, has been officially registered and cleared to do business in China. The new company's priority will be exploring for copper, with plans to expand into coal and potash, Rio Tinto stated in a news release.

A preliminary economic assessment for the Danakhil potash project in Ethiopia pegs the capital costs at $797 million. Canadian potash junior Allana Potash announced the figure yesterday while also outlining plans to raise the capital during a conference call to investors. CEO Farhad Abasov said during the call that nearly all the debt funding would come from development agencies such as the International Finance Corp (IFC), the African Development Bank and export-import banks from the US, Canada and Europe. The remaining $300 million would come from the sale of equity stock.

The US coal industry has settled on an unlikely candidate to build America's largest coal terminal. Bellingham is a small coastal city 32 kilometers south of the Canadian border known for being one of the few cities in the US to rely solely on solar and hydro-generated electricity and its innovative building efficiency program. Plans are now underway for a new $500 million bulk dry goods facility to ship 28 million tonnes of coal and potentially 8 million tonnes of potash to Asian markets and HuffingtonPost reports the plans have sparked a fierce fight in this otherwise quiet college town of 81,000 residents.