500 million dollar potash terminal planned for Ridley Island

Canpotex Limited, a major shipper of potash materials has announced plans to build a 500 million dollar terminal on Ridley Island as well as to expand its existing facilities in Vancouver.

It was an announcement that our Podunkian portal first suggested in May could be on the way to Prince Rupert .

The announcement today advises that with the new terminal in place the increased capacity for shipping is expected to almost double the company’s current output, that by adding 11 million tonnes of annual potash to their existing pace of 12 million tonnes a year.

The project is awaiting a final acceptance agreement from the Port of Prince Rupert, at which point construction will begin on the terminal facilities at Ridley. The need for increased capacity comes as the worldwide demand for potash rises steadily, with China becoming a major destination for the fertilizer products that are produced.

Prince Rupert’s location and distance to China makes it a sensible location for an export facility to be set up. No information as to how many jobs would be created have been released as of yet, nor has there been a timetable for construction provided at the moment either.

The Globe and Mail featured the story on its website today outlining the details of the Canpotex plans.

The CBC also had details on the developments, as did the Vancouver Sun, while the Northern View was the first with the local point of view on the story.

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Update: Opinion 250 has posted a story which includes local quotes and an artists rendition of the project.

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Update 2: The Windsor Star had some background on Canpotex's plans, the Prince George Citizen also provided some details on the plans while the National Post approached the story on how it impacts on the railroads.

Canpotex spending $500-million to expand port
JOHN PARTRIDGE
Globe and Mail Update
June 25, 2008 at 7:59 AM EDT

Canpotex Ltd. has unveiled plans to almost double its potash shipping capacity on the west coast in the next three years.

The company expects to spend more than $500-million on a new terminal at Ridley Island, near Prince Rupert, B.C., and on expanding an existing facility next to Neptune Bulk Terminals (Canada) Ltd. in North Vancouver. It is seeking to keep pace with planned production increases by the three Saskatchewan producers that own it.

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The expansion move is spurred by unprecedented global demand for fertilizer as farmers seek to boost crop yields to capture record prices.

Together, the projects will add about 11 million tonnes of annual potash shipping capacity to its existing 12 million tonnes, said the Saskatoon company. It handles offshore marketing for owners Potash Corp., Agrium Inc. and Mosaic Canada Crop Nutrition LP.

“These projects are essential and strategic steps in preparing for long-term growth in global potash demand,” Canpotex president and chief executive officer Steven Dechka said in a news release. “In addition to increasing shipping capacity, the terminals will provide access to the fastest shipping routes to certain key offshore markets such as China.”

Both terminal projects are subject to the finalization of acceptable agreements with port authorities in Prince Rupert and North Vancouver and other stakeholders, the company said.
Demand for potash and other fertilizers has been soaring around the world, and prices for both these nutrients and the shares of their producers have gone along for the ride.

In April, for example, China agreed to pay $576 (U.S.) a tonne for potash (plus shipping), up a startling $400 a tonne from last year's contract, while Potash Corp., the world's biggest producer of the stuff, saw its first-quarter profit leap to $566-million (U.S.), up from $198-million a year earlier.

The giant company's shares, meanwhile, have nearly tripled in the past year, closing at $229.99 (Canadian) on the Toronto Stock Exchange Tuesday.

Is Prince Rupert’s future in Potash?

While we’ve been down the road before when it comes to potential industrial development, there’s a story making the national business circles that Prince Rupert is being considered for the development of a potash terminal.

Canpotex International Pte. Ltd. is expected sometime within the next month, to outline its plans to its board of directors offering up three possibilities, all designed to construct the world’s largest potash terminal facility. The project would make for a development that will add some 10 million tonnes of potash handling capacity per year to the West coast shipping industry.

The three locations on the short list are apparently a terminal currently operated by the company in Vancouver, which would be expanded for their needs, a new terminal to be constructed in Cherry Point, Washington or an option in the Northwest that would take advantage of Prince Rupert’s day closer sailing time to Asia.

The cost of the project would be between 300 and 500 million dollars and would be designed to take advantage of the booming Asian markets which are creating a bit of a boom time in the potash and fertilizer industries.

The Vancouver Sun outlined the details behind the project on line and in Wednesday’s paper..

While we wait for the news as to which location will get the project, we’re sure that the local real estate industry will be anxious to see if Prince Rupert gets to the finish line of the Potash derby..

Canadian potash firms plot expansion
Growth could include a doubling of shipping capacity on the West Coast
Sean Silcoff
Canwest News Service
Wednesday, May 21, 2008

VIENNA, Austria -- With fertilizer prices soaring worldwide, Canada's potash giants are considering a massive $300-million to $500-million US expansion that would almost double shipping capacity at key West Coast ports to booming markets in Asia.

Next month, management of Canpotex International Pte. Ltd. will recommend a plan to its board to build a new facility or expand an existing one, adding 10 million tonnes of potash handling capacity per year, company chief executive Steven Dechka said at an international fertilizer conference.

Canpotex is owned by and jointly markets potash in Asia, Latin America and Oceania for the three firms that mine Saskatchewan's rich potash deposits: Potash Corp. of Saskatchewan Inc., Calgary-based Agrium Inc. and Minnesota's Mosaic Co.

"We feel the fundamentals of our business have changed," Dechka said. "We made investments in the 1990s [when prices and demand were much lower], and we feel we now have to be ready for the next 20 to 50 years."

Up for consideration are three options: a new 10-million-tonne facility in Prince Rupert, B.C.; enlarging an existing Canpotex terminal in Vancouver, which is already being expanded to increase its annual capacity by 30 per cent to 8.5 million tonnes; or building a new facility in Cherry Point, Wash., near Vancouver. In any of these scenarios, the new facility or expanded facility would be the world's largest potash terminal, Dechka said.

Jim Prokopanko, Mosaic's CEO, added that each option "has its positives and negatives."
The Prince Rupert facility is served by just one rail line, but is a day closer to Asia market. The Vancouver port is congested, but Canpotex's facility can be easily expanded. The empty Washington site would have to be built from scratch, and shipments would have to cross a border, but the land is easily accessible by large vessels.

The project would almost double Canpotex's annual capacity of 12 million tonnes, which takes into account the Vancouver expansion that is due for completion in 2010.

"It's an important investment and expansion that will allow the Canadian producers to expand" and serve offshore markets, said Prokopanko, a director of Canpotex.

Starting in the late 1990s, Canpotex built and expanded a port facility in Portland, Ore., and recently ordered 2,000 custom rail cars, increasing its fleet by 57 per cent.

Demand for all fertilizers, after rising steadily earlier this decade, took off in late 2006, in tandem with sharply higher grain prices. Rising demand for grains has been driven by the rapid income growth in India, China and other emerging nations. As they get wealthier, tens of millions of people annually are adding more meat to their diets. More meat means more grain to feed the livestock, and higher grain prices have encouraged farmers to invest more in increasing yields by using fertilizer.

Meanwhile, producers of potash -- the underlying mineral potassium is one of three key nutrients, along with nitrogen and phosphate -- are seeing years of disciplined management pay off.

The world is so short of available potash, companies that mine it in Saskatchewan and their peers in potash-rich Russia and Belarus have not only jacked up prices more than twofold this year, but are also rationing among their top buyers. The Saskatchewan mining firms have decided it is now time to bring long-dormant mines back into production. Potash and Mosaic each plan to spend billions of dollars to increase mining capacity by 50 per cent over the next five and 10 years, respectively, to 15 million tonnes of potash a year. Agrium is investing $500 million to expand its 2.1-million-tonne mining capacity by almost 40 per cent.

Ken Nyiri, a fertilizer consultant with U.K.-based British Sulphur Consultants, said that while prices for all fertilizers should stay high, potash prices should remain strong the longest -- declining to their next trough level in 2013-14 -- due to the fact there are deposits in just 12 countries and new mines cost at least $2.5 billion and take five years to build.