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PotashCorp Picadilly mine in Penobsquis, New Brunswick.
Canadian PotashCorp (TSX, NYSE:POT), the world’s largest crop nutrient company by capacity, is about to begin operations at its new Picadilly mine in New Brunswick, almost seven years after the firm announced its expansion plans.
The $2.2 billion project, which initially was supposed to add 130 jobs, had a setback this year due to slumping demand for both potash and phosphates. That resulted in more than 70 layoffs.
But the firm has renewed hopes for the East Coast-based mine, which will provide PotashCorp strategic access to the Latin American market.
The company’s executive vice president and CFO, Wayne Brownlee, says output from the mine will much more competitive that most competitors selling into regional customers such as Brazil.
“Ocean freight costs into Brazil are quite a bit lower than basically almost all of the other competitors (…) and it could be used into developing markets in Africa, further market development in Central America and South America, and who knows, into Europe at some point in time,” he said in a September presentation.
Once Picadilly is up and running at above 1.8 million tonne, the cost of producing the key fertilizer ingredient in New Brunswick should come down up to a $100 a tonne, Brownlee added.
The company’s goal is to still close the old mine and keep the new one, which has a projected lifespan of 73 years.
Image courtesy of New Brunswick’s Energy and Mines.
