Archive | Saskatchewan Mining

Cameco wins procedural victory in offshore ‘transfer pricing’ tax battle – by Drew Hasselback (Financial Post – August 15, 2017)

Cameco Corp. has defeated the Canadian government’s attempt to force about 25 of the company’s senior executives to submit to questioning on how the company uses offshore entities to reduce its tax bill.

The Minister of National Revenue sought a federal court order that would have compelled a long list of the company executives, including current chief executive Tim Gitzel and former CEO Gerry Grandey, to be interviewed by Canada Revenue Agency staff.

The Minister’s request relates to audits of Cameco’s 2010, 2011 and 2012 tax returns. In particular, the CRA says it wants more information on how Cameco uses foreign subsidiaries to reduce its tax bills. The process is called “transfer pricing,” and Canada has rules on when and how it can be done. Continue Reading →

Brad Wall Retiring From Politics After Almost A Decade As Saskatchewan Premier – by Lauren Krugel (Huffington Post – August 10, 2017)

His fierce opposition to Anglo-Australian mining giant BHP Billiton’s hostile
takeover bid for Potash Corp. of Saskatchewan in 2010 made him a folk hero of
sorts. More recently, he has been an ardent champion of pipeline projects that
would connect Canada’s crude oil to global markets.

REGINA — One of Canada’s most high-profile premiers who rose to national prominence for his down-to-earth style, sharp wit and, more recently, his willingness to lock horns with Ottawa is retiring from politics after a decade in office.

Saskatchewan’s Brad Wall, who is 51, said he made the decision at the end of June after talking it over with his wife Tami. “I think renewal will be good for the province. I think renewal and a different perspective will be good for the government. I think renewal will be good for my party as well,” he said Thursday.

“Whatever I do after this — and I currently have no leads or prospects — this job will be the honour of my working life.” Wall said he will stay on as premier and Swift Current member of the legislature until his successor is chosen in a leadership race. Continue Reading →

BHP’s Canadian potash plan not a done deal – by Matt Chambers (The Australian – July 31, 2017)

It is unlikely that BHP’s latest $US4.7 billion ($5.8bn) plan for its Jansen potash project in Canada — which chief executive Andrew Mackenzie is aiming to have in ­directors’ hands for approval within a year — will go ahead with­out ­substantial improvements to ­design or the ­market outlook.

Mackenzie put the big Canadian potash project back on the drawing board as BHP’s major medium-term mining growth option, alongside a Spence copper mine expansion in Chile, just two months ago, after previously flagging a slowdown and even mothballing of the project. So it is expected to be a focal point of briefings after BHP delivers an expected full-year profit of $US7.2bn later this month.

At Spence, a $US2bn underground mine approval is looking very likely in the next few weeks, as copper sentiment is running hot and BHP has cut a previous cost estimate by a third, boosting the expected rate of return to around 15 per cent. Continue Reading →

Fertilizer maker Potash Corp beats revenue expectations – by Ahmed Farhatha and Rod Nickel (Reuters Canada – July 27, 2017)

(Reuters) – Canada’s Potash Corp of Saskatchewan reported bigger-than-expected revenue on Thursday as it sold more potash at higher prices compared with a year earlier, marking a slow recovery in the oversupplied market.

Potash prices have rebounded modestly since last year but remain low, under pressure from bloated global capacity and soft crop prices. The Saskatoon, Saskatchewan-based fertilizer producer’s revenue rose 6.4 percent to $1.11 billion, beating the average estimate of $1.09 billion.

Potash Corp’s results were mostly in line with expectations, but the company’s second-half prospects may not be bolstered by improving potash market conditions, disappointing some investors, Citi analyst P.J. Juvekar said. Continue Reading →

BHP defends plan to invest $6bn in Canadian potash project – by Matt Chambers (The Australian – July 24, 2017)

BHP Billiton has defended its contentious plans for a fresh $US4.7 billion ($5.9bn) investment to bring the Jansen potash project in Canada’s Saskatchewan into production, saying low prices are expected to rise as oversupply eases. The mining giant added that the project would only go ahead if strict investment hurdles were overcome.

The defence, posted to its website earlier yesterday, comes after US fertiliser giant Mosaic cast doubt on the plan’s timing and economics and as US activist fund Elliott uses the plans to open up a new front in its campaign to restructure BHP.

BHP’s principal potash analyst, Paul Burnside, said the Jansen project, where BHP has already approved $US3.8bn to access the 1km deep ore body ahead of a development decision, could support attractive shareholder ­returns over decades. “We’re excited to have this option in our portfolio, and there are many ways we can realise value from it,” Mr Burnside said. Continue Reading →

Historic deal ensures First Nations participation in new potash mine – by Marilyn Scales (Canadian Mining Journal – June 1, 2017)

Three levels of government, a mining company and a First Nation have come together in a historic agreement to develop a new potash mine in Saskatchewan. The joint venture between Encanto Potash Corp. and the Muskowekwan First Nation is truly unique. Together they plan to develop a solution mine near the town of Lestock on property within the Muskowekwan reserve.

The Muskowekwan are joining the project as full participants, with all the economic and revenue opportunities that entails. And the community is enthusiastic about the prospects.

Over the long life of a Saskatchewan potash mine, this could be worth billions to the First Nation, as chief Reg Bellerose told CMJ. There are about 2,000 members of the Muskowekwan First Nation, but only about 700 or 800 live on the reserves because the economic opportunities lie elsewhere. Continue Reading →

BHP’s $6bn potash play a misstep, warns Elliott Management – by Matt Chambers (The Australian – July 20, 2017)

New York hedge fund Elliott Management says BHP Billiton’s plans to approve a $US4.7 billion ($6bn) potash project in Saskatchewan are alarming, with the activist fund querying whether potash could be “the next shale”.

“This sounds alarmingly familiar and comes as the company proclaims the dubious strategy of ‘Thinking Big’ — a concept that has been disastrous for BHP shareholders,” an Elliott spokesman said. “We share the deep concerns raised by analysts and shareholders that expanding into potash could be a severe strategic misstep,” Elliott said, without naming the analysts or shareholders.

“Think Big” is the slogan BHP has used in a $10 million ad campaign in recent months that has dropped the Billiton name for marketing purposes. Continue Reading →

Potash call marks fork in the road for BHP’s Ken MacKenzie – by Stephen Bartholomeusz (The Australian – July 18, 2017)

It could be regarded as a deliberate provocation, a statement of defiance and intent. The latest addition to BHP Billiton’s “Prospects” blog will, intentionally or not, irritate the group’s activist stalker, Elliott Management and its supporters. In the blog item, BHP’s principal potash analyst, Dr Paul Burnside, makes the demand-side case for potash, promising an analysis of the supply side in a future entry.

The issue is somewhat controversial in the context of BHP and Elliott’s attempt to force its own agenda on the company. BHP has, of course, already committed $US3.8 billion to its Jansen potash project in Canada and earlier this year foreshadowed a decision as early as next year on whether to proceed with the first phase of a project that could cost a further $US8bn to $US10bn.

Despite the dramatic reductions in its capital investment once the commodity boom ended, BHP and its chief executive Andrew Mackenzie have remained enthusiastic about the long-term prospect of entering the potash market and adding a “fifth pillar” to BHP’s portfolio of iron ore, coal, copper and petroleum. Continue Reading →

Mining Giant Hunts for Diamonds in the Canadian Forest – by David Stringer (Bloomberg News – July 18, 2017)

Rio Tinto Group’s pursuit of new diamond output to tap rising demand in Asia is focusing on an unheralded exploration project in the Canadian forest.

The world’s second-biggest miner on Tuesday added the Fort a la Corne joint venture, about 60 kilometers (37 miles) east of Prince Albert in Saskatchewan, to its published list of advanced projects after striking an agreement last month to take as much as a 60 percent stake.

The venture’s Star-Orion South project holds an estimated diamond resource of 55.4 million carats and has potential development costs of about C$2.5 billion ($2 billion), according to 2015 filings by developer, Saskatoon-based Shore Gold Inc. Continue Reading →

Divisive $13 Billion Potash Plan to Test BHP’s New Chairman – by David Stringer (Bloomberg News – July 17, 2017)

BHP Billiton Ltd.’s plan to enter the potash market with a contentious $13 billion project in Canada is adding to challenges facing the incoming chairman of the world biggest mining company.

Ken MacKenzie, a 53-year-old board member who takes up the role in September, currently is on a global tour to meet investors in the wake of an activist campaign in recent months spearheaded by Elliott Management Corp. Issues of concern for some shareholders include the producer’s U.S. onshore oil and gas assets and its plans to accelerate the Jansen potash venture.

Proceeding with Jansen risks a “severe strategic misstep,” according to Sanford C. Bernstein Ltd. analyst Paul Gait, as the new supply would risk depressing prices by delaying to about 2036 the ability of the potash market to work through overcapacity. Paul Singer’s Elliott went public in April with a campaign seeking asset sales and a corporate overhaul, claiming management decisions have eroded as much as $40 billion in value. Continue Reading →

BHP says work on Jansen mine moving ahead – by Ashley Robinson (Regina Leader-Post – June 28, 2017)

Giles Hellyer is optimistic about the multi-billion-dollar Jansen potash mine project. The BHP president, Potash Canada, presented an update Wednesday during a Regina & District Chamber of Commerce luncheon.

Located about 140 kilometres east of Saskatoon, the massive Jansen project has experienced significant delays, but Hellyer stressed during the luncheon that plans and work on the mine are progressing.

Last month, BHP CEO Andrew Mackenzie told a conference in Barcelona that the mine’s first phase could go to the Melbourne-based company’s board of directors for approval next summer and be operational in 2023. Continue Reading →

‘Something forward-thinking, with the promise of innovation’: PotashCorp, Agrium to merge as Nutrien – by Alex MacPherson (Saskatoon StarPhoenix – June 21, 2017)

A process engineer from Ohio and business manager from Texas came up with the ideas that inspired Nutrien Inc., the name of the new company that will be formed in the planned merge of Potash Corp. of Saskatchewan Inc. and Agrium Inc. later this year.

Announced Wednesday, almost 10 months after the companies confirmed that a US$26-billion deal was in the works, the name emerged from a massive contest that resulted in employees from the two companies submitting more than 4,000 ideas.

“Quite literally, the list of names went from ‘Abundantly’ to ‘Zon Terra,’” PotashCorp spokesman Randy Burton said, adding that most of the suggestions — from the Latin “Fertilis” to the Greek “Auxesia” — reflected the combined companies’ businesses. Continue Reading →

New project aims to extract rare earth elements from uranium tailings – by Alex MacPherson (Saskatoon StarPhoenix – June 5, 2017)

New technology under development in Saskatoon could make it profitable for Saskatchewan-based mining companies to extract “significant” quantities of rare earth elements from uranium tailings solution that would otherwise go to waste.

The parallel processes being piloted by Saskatchewan Research Council (SRC), which started work on the project three years ago, involve concentrating the tailings solution and then using “cells” containing mixers to separate out each of the rare earth elements.

“It’s good for our uranium companies and it’s good for the province,” said Bryan Shreiner, who heads SRC’s minerals division. “And in terms of value for Canada and the rest of the world, rare earths are in demand.” Continue Reading →

BHP aims to grow potash mining into a core business – by Kaori Takahashi (Nikkei Asian Review – June 5, 2017)

Resource giant weighs sell-off of US shale gas assets in restructuring drive

SYDNEY — BHP Billiton is increasing its investment in potash mining and seeking to divest its U.S. shale gas assets. Andrew Mackenzie, CEO of the world’s largest miner, told The Nikkei that “under some circumstances, we might start to grow potash to the size of our iron ore business today.”

Mackenzie said BHP will continue its restructuring effort. It is looking for an opportunity to sell its shale gas business, which has seen its profitability deteriorate, to focus more on potash, potentially bringing it into line with the company’s dominant iron ore business which reaps over $9 billion a year.

“It’s taken us 50 years to create today’s iron ore business. It will be another 50 years to create a potash equivalent. So you have to start somewhere,” Mackenzie said. Continue Reading →

BHP talks up Saskatchewan potash project – by Matt Chambers (The Australian – May 23, 2017)

BHP’s board could have the most expensive ­single development approval ­decision in the miner’s history in front of it next financial year, in the form of a $US4.7 billion ($6.3bn) investment in the Jansen potash project in Saskatchewan.

Lost in the ramp-up of activist fund Elliott Management’s hostilities last week was the revelation that the miner is nearly ready to give approval to the first production stage of the Jansen project, where it has approved $US3.8bn to sink 1km-deep shafts to get to the big potash deposit.

The enthusiastic BHP mood around potash will create trepidation among some investors that the Elliott push to create value through an oil and gas restructure and share unification is accelerating potash development, while Canadian analysts have queried whether the global potash market can support it. Continue Reading →