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Posts tagged ‘Nutrien Ltd (NTR)’

Open and shut cases: West

December 20th, 2019

A look at the western provinces’ mine openings and closures for 2019 and 2020

by Greg Klein

A look at the western provinces’ mine openings and closures for 2019 and 2020

Western Potash began Saskatchewan’s first solution mining operation for this commodity in July.
(Photo: Western Potash)

 

This is Part 2 of a four-part series.

The Exxon Valdez of Canadian mining went into dry dock at the end of May, as Imperial Metals TSX:III put its Mount Polley copper-gold operation on care and maintenance. The company that traded above $16.50 prior to the August 2014 tailings dam failure spent most of 2019 well below $3. Now holding two suspended mines, the company’s operational portfolio has dwindled to a 30% stake in B.C.’s Red Chris copper-gold open pits. In August Imperial sold the other 70% to ASX-listed Newcrest Mining for US$775 million.

But if human error can dump eight million cubic metres of tailings muck into the waterways, human ingenuity can respond. As the five-year anniversary approached, Geoscience BC founding president/CEO and Imperial’s former chief scientific officer ’Lyn Anglin offered her perspective on the $70-million clean-up program, which continues during the mine’s suspension.

 

Maybe its status as Canada’s largest diversified miner leaves Teck Resources TSX:TECK.A/TSX:TECK.B open to greater diversity in downturns. The company blamed global economic uncertainties for “a significant negative effect on the prices for our products, particularly steelmaking coal.” But the company attributes its most recent coal mine closures not to market forces but to depletion. That was the verdict for the mid-year shutdown of B.C.’s Coal Mountain and for Alberta’s Cardinal River, scheduled to follow in mid-2020.

A look at the western provinces’ mine openings and closures for 2019 and 2020

Some depleted mines notwithstanding, Teck Resources
has over four decades of B.C. coal reserves.
(Photo: Teck Resources)

Although Teck warned employees in September of layoffs, noting a price drop from about $210 to about $130 per tonne over the previous weeks, further mine closures weren’t specified. Depletion hardly concerns Teck’s four remaining Kootenay-region coal operations. The company says there’s enough steelmaking stuff to keep Line Creek, Greenhills, Elkview and Fording River busy for 18, 28, 38 and 43 years respectively.

While the company now focuses on its Quebrada Blanca Phase 2 copper development project in Chile and its JV at the port of Vancouver’s Neptune terminal, Teck’s $20-billion proposal for Alberta might serve as an affront to the great cause of our time. In July Teck managed to get a recommendation of approval from a joint federal/provincial environmental review panel for its Frontier oilsands project. Media reports, however, suggest Environment and Climate Change Minister Jonathan Wilkinson and his cabinet might reject the panel’s recommendation.

 

Whether it brought relief or astonishment to local supporters, in July Western Potash finally began building its long-delayed Milestone potash project in southern Saskatchewan.

A look at the western provinces’ mine openings and closures for 2019 and 2020

A determined-looking Western Potash group
celebrates a milestone in Saskatchewan mining.
(Photo: Western Potash)

Expectations had risen and fallen a few too many times since at least 2015, when the company announced it had secured funds sufficient for a scaled-down capex. But in October Western began solution mining, the first application of this method for potash in Saskatchewan. The innovative operation will also be “the first potash mine in the world that will leave no salt tailings on the surface, thereby significantly reducing water consumption.”

Now a subsidiary of Western Resources TSX:WRX, the company plans “hot mining” early in the new year to pump brine containing potassium chloride into a crystallization pond at surface, leaving unwanted sodium chloride underground. By Q3 2020 a newly built plant will process the potash for an off-take agreement covering all Phase I production. Phase II calls for expanded operations to support an average 146,000 tpa output over a 12-year life.

 

Yet the mine starts up amid cutbacks and shutdowns elsewhere. The province’s big three potash producers, Nutrien TSX:NTR, Mosaic NYSE:MOS and K+S Potash Canada, all reduced output in 2019. Between them, Nutrien and Mosaic suspended four operations, at least one indefinitely.

In August workers at Mosaic’s Colonsay operation learned of an indefinite layoff, reportedly to last anywhere from six months to a matter of years. Further discouragement came in November when the United Steelworkers confirmed that the company was moving equipment from Colonsay to its Esterhazy operation, itself subject to reduced output.

A look at the western provinces’ mine openings and closures for 2019 and 2020

Saskatchewan’s tallest structure stands over a shaft reaching
more than a kilometre underground at Mosaic’s Esterhazy K3.
(Photo: Mosaic)

Esterhazy’s ambitious K3 expansion project, however, continues unfazed by current market conditions. With construction started in 2011, commissioning begun in December 2018 and full production not scheduled until 2024, the new underground operation will replace Esterhazy’s K1 and K2 mines, keeping the K1 and K2 mills busy at the world’s largest potash mining complex.

In September Nutrien announced it would “proactively” suspend its Allan, Lanigan and Vanscoy potash mines. Workers at the first two got December 29 recall notices, but Vanscoy’s resumption has yet to be revealed.

Nevertheless, company bosses expressed optimistic 2020 foresight. It will be “a strong year for crop input demand for which we are well-positioned to benefit,” predicted Nutrien president/CEO Chuck Magro. His Mosaic counterpart Joc O’Rourke expects “a very strong application season in Brazil and North America, and a better supply and demand balance in 2020.” .

 

That year or the next just might be momentous for Saskatchewan potash. BHP Group NYSE:BHP’s board of directors has until February 2021 to decide whether to complete Jansen, a $17-billion project that would challenge the province’s potash protocol.

The threat of competition might take an unexpected turn, however. As reported in the Financial Post, at least two analysts say rival companies could attack pre-emptively by boosting production to lower prices and discourage new mine development.

 

Holding top positions globally are Saskatchewan as potash-producing jurisdiction and Saskatoon-headquartered Nutrien as potash miner. The province also boasts world stature for uranium but has no new U3O8 operations expected during this survey’s time frame. Even so, industry and investors watch with interest as Denison Mines TSX:DML, NexGen Energy TSX:NXE and Fission Uranium TSX:FCU each proceed with advanced large-scale projects.

This is Part 2 of a four-part series.

Yesterday’s news today: Nutrien acknowledges 34 workers trapped underground

July 3rd, 2019

by Greg Klein | July 3, 2019

Update: Nutrien later reported that all 34 workers had surfaced uninjured by 6:15 p.m. July 3.

They reportedly have sufficient food, water and air, and there’s no fire or other danger looming. Still the question arises: Do people get stuck in Saskatchewan potash mines so frequently that it’s barely newsworthy? Thirty-four workers got trapped in Nutrien’s (TSX:NTR) Cory mine on July 2, but media didn’t find out until July 3.

Nutrien acknowledges 34 workers trapped underground

Cory comprises one of six Nutrien
potash mines in southern Saskatchewan.
(Photo: Nutrien Ltd)

An elevator breakdown keeps the workers underground until management comes up with an alternative means of egress. The mine had been undergoing scheduled summer maintenance.

Fire is the usual cause of confinement for Saskatchewan potash miners. Refuge stations provide safe rooms stocked with food, water and communications devices while fire crews extinguish the blaze and smoke clears. Those unable to reach a refuge station can try to use a battice, or safety curtain, to seal themselves off.

The Saskatchewan industry might claim an adequate fire safety record with few if any injuries reported at underground potash mine fires. But the fires themselves aren’t rare, as some previous examples show.

  • May 2019: 63 workers trapped underground for over seven hours during a fire at the Allan mine

  • September 2018: 101 workers trapped for five and a half hours at the Lanigan mine

  • March 2018: 55 workers trapped for about 20 hours at the K2 mine

  • February 2017: 87 workers trapped for up to 15 hours at the Rocanville mine

  • December 2016: 114 workers trapped for several hours at Allan

  • September 2014: 96 workers trapped for 26 hours at Allan

  • February 2014: over 50 workers trapped overnight at the Vanscoy mine

  • January 2013: 318 workers trapped for several hours at K2

  • September 2012: 20 workers trapped for 18 hours at Rocanville

With the exception of Mosaic’s (NYSE:MOS) K2 fires, all the above fires took place at mines now owned by Nutrien following last year’s merger of PotashCorp and Agrium.

Canada’s six biggest miners boost exploration spending by 31%: PwC

July 5th, 2018

by Greg Klein | July 5, 2018

Canada’s six biggest miners boost exploration spending by 31%: PwC

(Photos: PricewaterhouseCoopers)

 

The half-dozen Canadian companies among the world’s top 40 miners increased exploration expenditures last year at twice the rate of the others. That info comes from the upbeat results found in PricewaterhouseCoopers’ Mine 2018, a study of the planet’s 40 biggest companies by market cap. The six Canadians spent C$620 million looking for new resources last year, compared with C$473 million in 2016. The report forecasts continued improvement throughout the current year.

Globally, exploration rose 15% in 2017 to US$8.4 billion, according to S&P Global Market Intelligence figures cited by PwC.

Not so impressive, though, was the equity raised on three key mining markets, which fell $1.7 billion last year for the industry as a whole. Especially hard-hit was Toronto, which plunged 36%. Australia slipped 9%, while London actually jumped 47%. However this year’s Q1 investing “reveals that activity in Toronto and Australia is starting to pick up and signals a renewed interest in exploration and early development projects.”

Overall, higher commodity prices propelled the top 40 companies’ revenues 23% to about US$600 billion, with cost-saving efficiencies contributing to a “sharp increase in profits.” The report sees several years of continued growth as global annual GDP increases about 4% for the next five years.

Meanwhile market caps for the top 40 soared 30% last year to US$926 billion.

The top 40 companies’ capex outlay, however, floundered at its lowest level in 10 years. But the authors “expect next year’s level to increase as companies press ahead with long-term strategies, be it growth through greenfield or brownfield investments, or new acquisitions.”

Should that investment fail to materialize, the report asks, “will there be a temptation to spend without sufficient capital discipline when demand outstrips supply?”

At a number of points PwC admonishes miners not to “give in to the impulses” engendered by the previous boom: “Perhaps the most significant risk currently facing the world’s top miners is the temptation to acquire mineral-producing assets in order to meet rising demand. In the previous cycle, many miners eschewed capital discipline in the pursuit of higher production levels, which set them up to suffer when the downturn came.”

Canadians among the 2017 top 40 consisted of the Potash Corporation of Saskatchewan (since merged with Agrium to create Nutrien TSX:NTR) in 13th place, Barrick Gold TSX:ABX (14th), Teck Resources TSX:TECK.A and TSX:TECK.B (16th), Goldcorp TSX:G (25th), Agnico Eagle Mines TSX:AEM (26th) and First Quantum Minerals TSX:FM (30th).

The top five companies, holding a top-heavy 47% of the top-40 combined market cap, were BHP Billiton NYSE:BHP, Rio Tinto NYSE:RIO, Glencore, China Shenhua Energy and Vale NYSE:VALE.

In addition to exploration spending, the half-dozen Canadian companies also got special mention for workplace safety, as “world leaders in digital transformation” and for boardroom diversity in which “women make up 25% of directors among Canadian miners, compared to 19% among their global peers.”

Download PwC’s Mine 2018 report.

Caution steadies the hand for Canada’s top miners: PwC

March 1st, 2018

by Greg Klein | March 1, 2018

Last year saw “few eye-popping deals and only limited financing activity” as TSX-listed mining companies responded cautiously to improved markets, according to a new PricewaterhouseCoopers report. Like many of their peers internationally, the big board’s top 25 miners focused on “paying down debt, improving balance sheets and judiciously investing in capital projects as commodity prices largely stabilized.”

The findings come from Preparing for Growth: Capitalizing on a Period of Progress and Stability, released March 1.

Gold, the raison d’être for most of the miners, fell 3% during the year ending September 30. During that period the 225 TSX-listed miners (down from 230 the previous year) lost 4% of their aggregate value, compared with a 10% combined improvement for other sectors. Miners slipped to a 9% share of the entire TSX market, compared with 11% the previous year, holding ninth place among industries on the exchange. (Financial services came in first.)

Barrick Gold TSX:ABX, still the world’s top gold producer despite Newmont Mining’s (NYSE:NEM) challenge, held top place among TSX mining market caps as of September 30. The top stock was Kirkland Lake Gold TSX:KL, with a 175% price increase over the full year, following its billion-dollar takeout of Newmarket Gold. The acquisition represented part of a trend of “mid-market, intermediate gold companies looking to build scale and gain efficiencies through consolidation,” said John Matheson of PwC Canada.

Two since-merged companies, Potash Corp of Saskatchewan and Agrium, followed Barrick with second and third place among TSX mining valuations. Currently at about $41 billion, the potash combination Nutrien Ltd TSX:NTR has far surpassed Barrick’s $16.8-billion market cap.

Nearly half of the 225 companies had valuations of $150 million or less. But the category between $150 million and $1 billion boasted 74 companies, compared with 59 the previous year.

Nineteen of the top 25 had exposure to gold, 10 to copper, seven to zinc, six to silver and four to nickel, PwC stated. The report noted increasingly bullish sentiment for copper, zinc, cobalt and lithium. The latter mineral did especially well for five companies, with an approximately 39% total increase in valuations over nine months to September 30 for Orocobre TSX:ORL, Lithium Americas TSX:LAC, Nemaska Lithium TSX:NMX, Avalon Advanced Materials TSX:AVL and Globex Mining Enterprises TSX:GMX.

But overall, TSX miners “raised only half the equity capital in 2017 that they did the previous year. And for the second consecutive year, there were no mining initial public offerings on the TSX.”

That contrasts with a more buoyant, although still cautious mood among Venture-listed junior miners reported in November by PwC, which found a substantial increase in market caps, financings, M&A and IPOs for TSXV explorers.

Download Preparing for Growth: Capitalizing on a Period of Progress and Stability.