DISRUPTIONS TO THE SASKATCHEWAN POTASH MARKET
By: Evan Lucyk
The Saskatchewan potash market has seen a number of disruptions recently. If there’s anything we’ve learned over the past two years, it’s that change is inevitable. Even though it’s reassuring to have things always stay on an even keel, disruptions will inevitably arrive at our door—and we must be able to pivot quickly and adapt when they do.
So, what exactly are the main disruptions facing the Saskatchewan potash market today?
THE AGING WORKFORCE AND SUCCESSION PLANNING
As we discussed in a previous post, our aging workforce is a real and far-reaching issue facing companies in the industry right now. With leadership preparing to retire, succession planning has never been more important.
No company wants to be left scrambling to fill the huge voids left by many open positions, so succession planning is a must for making these transitions as seamless as possible.
SOLUTION MINING AND SMALLER MINES ENTERING THE MARKET
Another thing we’re seeing taking place in the solution mine realm is “junior or small-scale” solution mines now slowly entering the market.
The advantage of these mines is that they can be operated on a fairly small scale, with relatively little capital investment. When they’re put into large quantities, they can also be deployed much quicker than a large-scale mine. They are less than a 10th of the size of a conventional mine, and quick to erect.
We predict they will end up changing the entire process of how our potash market works on a global scale because it will allow smaller companies to enter the market much more easily. Lowering the barriers to entry enables more players to enter the game. It’s an exciting disruptor, to say the least.
THE MINING GIANT BHP GROUP’S LARGE UNDERGROUND MINE
One specific newsworthy event involves Australian mining giant BHP Group, which has just approved $7.5 billion in capital spending to build its Jansen potash project—a large underground conventional mine—at the Jansen property right here in Saskatchewan. This bodes well for the industry and promises to really mix things up due to the sheer enormity of their size. BHP is a far-reaching, worldwide conglomeration based out of Australia and perfectly poised to take over the market with its presence—the Jansen outfit included.
The company estimates that the project will be located roughly 140 kilometres out of Saskatoon and that it will produce roughly 4.35 million tonnes of potash annually, with the potential for further expansion in the future.
Chief Executive Officer Mike Henry said it best when he shared his high hopes for this endeavor: “This is an important milestone for BHP and an investment in a new commodity that we believe will create value for shareholders for generations.”