Billiton moves Sask. potash project to next study phase

One of the world’s biggest mining firms is taking its proposals for a potash mine in eastern Saskatchewan from “pre-feasibility” to the “feasibility” study stage.

Australian/British mining firm BHP Billiton on Wednesday described its move as “an advanced stage of the (company’s) project approvals process.”

Potash market observers consider Billiton to have potential as a game-changer in a sector of the fertilizer industry now dominated by a small clutch of players such as Saskatoon’s PotashCorp, Minneapolis’ Mosaic and Calgary’s Agrium.

Based on Billiton’s current schedule, which included submitting its environmental impact statement in December to the Saskatchewan environment ministry, the company expects its Jansen project to start producing “saleable potash” in 2015 from what it described as a 3.37 billion-tonne resource.

From that, the company said, it expects to draw about eight million tonnes of potash per year over about 70 years.

“BHP Billiton’s strategy is to develop and safely operate large, long-life, low-cost assets and we continue to make progress at our Boulder, Young, Burr and Melville sites,” Graham Kerr, president of Billiton’s diamond and specialty products arm, said in a release.

“We look forward to continuing to work on our growth projects with our Canadian suppliers and host communities as we seek to build a significant presence in Saskatchewan.”

An 800-pound gorilla

In all, Billiton has exploration rights on about 3.5 million acres in eastern Saskatchewan’s potash basin. Its Boulder and Young projects southeast of Saskatoon are in the more “preliminary identification phase of study,” the company said.

Billiton’s potential project sites at Melville and at Burr, south of Humboldt, came to the company through its takeover of Athabasca Potash early last year.

Billiton’s presence on Saskatchewan’s potash mining scene, with or without the company’s thwarted takeover bid for Saskatoon-based fertilizer giant PotashCorp, was compared by one industry analyst last year to the arrival of an 800-pound gorilla in the room.

New York investment firm Dahlman Rose predicted Billiton would look to operate away from the “oligopoly” of the few major players as it seeks to capture potash market share, which in turn would suggest an eventual pullback in potash fertilizer prices.

Billiton has previously noted there are 10 mines currently producing potash in Saskatchewan, but no new potash mines have been set up there in almost 40 years.

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