Friday, June 17, 2016

Canpotex plans for the future won't include a Prince Rupert Export Terminal

The Ridley Island site dedicated towards
development for the Canpotex
Potash Terminal will soon be
available for other use, as the company
abandons its Prince Rupert plans
With potash prices remaining low and financial conditions continuing to put pressure on the Canadian industry, one of the most highly anticipated industrial projects for the North Coast has bit the dust.

Canpotex, which had been proposing a major investment at Ridley Island has abandoned its plans to develop a shipment terminal, bringing to an end the nearly one decade long process that often provided for a lot of promise, but little in the way of actual shovels in the ground.

The Canpotex story for Prince Rupert lifted off in June of 2008 when the potash exporter laid out its ambitious plan to develop a portion of Ridley Island, with Prince Rupert winning what had become a potash derby against Cherry Point in Washington state which had also been proposed for an export terminal.

The announcement of the proposed development at the time, provided some of the push towards a major initiative on Ridley Island, with the 2015 completion of the Ridley Island Rail, Road Utility Corridor project adding to the transportation infrastructure at Ridley.

For much of the eight years since it was first announced, the prospect of the Potash terminal development for the North Coast gave cause for some optimism among the city's elected officials, with then Mayor Herb Pond, noting that the proposed development indicated a growing confidence that wealth and prosperity was returning to the community.

Some of that optimism however would begin to diminish, as the announcement of those early plans gave way to less and less engagement from Potash Corporation officials, while the economic situation for the industry continued to face the headwinds of the world's ever changing financial issues.

The lack of movement by the company was frequently on the mind of City Council over the the last eight years, with Council members frequently requesting updates from the company on their plans, at times expressing frustration at the delays that the project was facing.

Some of that frustration came to the forefront in 2013 as City Council sought some kind of indication as to where the project stood.

At that time, both then Mayor Mussallem and Councillor Joy Thorkelson made note of the city's efforts in making the company feel welcome and expressed their concerns at the lack of communication from the company.

A sign of a more optimistic time, the original
2008 announcement of Canpotex's plans
for an export terminal in Prince Rupert

As we have noted on the blog in the past, Canpotex has a number of shipment terminals already in place, with a recent expansion at its Vancouver facility and the reduced load on its New Brunswick operations apparently making the need for expansion to the North Coast not a pressing issue. The company also operates an export terminal at Portland Oregon.

Potash Corporation telegraphed the idea that further export expansion may not be in the cards back in January, when the Saskatchewan based company shut down its mining operations in New Brunswick, noting that some of its export options would be shifted to the Atlantic coast port.

In a media release issued today, Ken Seltz, Canpotex's President and CEO brought the topic to a close as he outlined the decision reached by the Board of Directors.

"This decision was made after careful deliberation of Canpotex's current and anticipated terminal capacity needs, and the options we have to meet those needs ... We sincerely appreciated the relationships developed over the years this project was considered. We thank all project stakeholders and community members for their constructive interactions with Canpotex and interest in the project"

Canpotex closed the door on export terminal
plans for Prince Rupert today

The full statement from the company can be viewed here.

Earlier this month financial papers took note of the current state of the Potash industry, noting that the Canadian industry was facing a tough year ahead as negotiations with Chinese buyers continued to drag on without any resolution.

Those financial concerns have marked much of the year for the industry, with dividends cut and profit forecasts considered weak, with depressed prices for the produce poised to decline ever further over the course of the year.

Yesterday, the National Post provided this story, highlighting the concerns of investors when it comes to a dividend forecast for the company for this year.

To this point, neither the Prince Rupert Port Authority, or the City of Prince Rupert have offered a statement or reaction to the news out of Saskatchewan today.

You can review the Canpotex file for the North Coast from our archive page here.

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