Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Canadian potash producers are ramping up production targets in anticipation of increasing demand for the mineral, as farmers buy more fertilizer to boost crop yields.
On Wednesday Saskatchewan PotashCorp said it will squeeze an additional 5 million metric tonnes of potash capacity from its existing mines, according to company CFO Wayne Brownlee, speaking at an investor conference in Toronto.
Bloomberg News reports:
Saskatoon-based PotashCorp is in the midst of projects that will roughly double its annual potash capacity at existing mines to 17.1 million tons by 2015, from the level in 2005, Brownlee said. The company may be able to further expand annual output capacity by about three million tons in Saskatchewan and two million in New Brunswick, he said.
Meanwhile, German potash producer K+S, which acquired junior potash explorer Potash One for $434 million last November, is staying with its initial start date of 2015 for its Legacy project — a former Potash One property. The company said on Wednesday it accelerate production at Legacy slower than Potash One was contemplating, and will have a feasibility study on the project out by fall.
Mining Weekly reports:
“We do not see a chance to have 2.7-million tons already up and running by 2020, which Potash One was contemplating. I think that’s too aggressive,” K+S Aktiengesellschaft spokesperson Christian Herrmann said, adding it would take “several more years” to reach that output level.
