Wednesday, September 16, 2009

You better watch out, you better not cry; you better not pout, I’m telling you why! Cause Canpotex is coming to town!

The next big project for Prince Rupert, the Canpotex potash terminal enters its consultative phase next week, as the potash giant hosts an open house at the Lester Centre for the Arts.

The information session takes place on Tuesday, September 22 with the doors opening at 5:45 and a presentation to take place at 6:30 with a discussion period to follow at 7:10.

Canpotex is currently in the process of evaluating two sites, the Prince Rupert option and/or an expansion of its Vancouver operations, eager to take advantage of growth in the Asian marketplace, where much of their product is destined.

With the current economic climate however, the prospect of both projects getting the go ahead at the same time seems unlikely, so it appears it will come down to which offers the best economic return, with the least amount of expense to the corporation.

The potential of a major industry locating on Ridley Island has of course once again stirred the hopes of Podunkians, eager for some glimmer of hope along the economic road, so much so that what seems to be a simple case of outlining the project and taking questions has, for some turned into a case where we need to show the potash world just how badly we want to host their gateway to the world.

For some it seems that it should be a pull out the stops approach to sell Prince Rupert as the only choice, that at least judging by the conversation on the local chat portal hackingthemainframe, as outlined on the topic board posted about Canpotex where the debate has been flowing through the day today.

It has offered up some interesting snapshots of how the community views the prospect of industrial development, with some expressing concerns for environmental impact of such a project, while others offer up the less than convincing argument that if we somehow should offend Canpotex next week, not show the flag and not provide them with the incentive to locate here, then phase two of the Container Port would be in peril.

That’s an argument that doesn’t seem to have much in the way of background evidence to support it and seems to suggest that the ports expansion plans are so limited as to be ready to suffer a setback at the whim of a private operator. Nowhere in their constant flow of information has the Port indicated that any delay in a potash terminal would result in troubles for the much anticipated development phase two.

And in reality, much like the Canpotex project, any future Port expansion will be dependant on market conditions in Asia and funding availability and partnerships with shipping and transportation lines.

Using the port expansion prospects as the big stick to scare the locals would be a rather foolish approach, which is why we don’t believe that in any of the material provided thus far by Canpotex shows any correlation between the two projects.

Obviously Canpotex would be a welcome addition to the local scene, providing much in the way of investment both in money, jobs and the purchase of supplies, not to mention one would hope a contribution to the local tax base. So clearly, the city and its residents should if nothing else express the hope that Canpotex can find good value for their investment dollars here.

But the development will take place on their timeline and only if they can make those numbers work in their favour.

As recently as June of this year, Canpotex explained the new approach to their investment plans, suggesting that a phased in approach was more to their liking, keeping a cautious eye on the world market for potash as well as the financial climate of the times.

The telling quote issued to the Northern View at that time outlined their thoughts on the future plans of development “We’re not going to build a facility to have it sit empty for months.”

And that concer, along with the financials of such a venture in the end, will dictate whether the terminal is constructed in Prince Rupert or Vancouver, or eventually in both.

While it probably can’t hurt to make them feel welcome and learn more about their plans, next week really only offers up a glimpse of what they might have planned upon their arrival on our shoreline.

In the end, the final decision will really have nothing to do with us, as always in industry, it will be what is best for Canpotex and where they will find the best result for their hundreds of millions of dollars.

For those making plans to attend the open house, below is our archive of Canpotex articles from the blog, a handy primer of all things potash and a guideline as to what information Canpotex has been offering so far in their run up towards potential development.

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