Foreign oil into eastern Canada graphic

Foreign oil into eastern Canada

Mosaic’s earnings beat on higher potash, phosphate prices

OCTOBER 31, 2017 / 5:20 AM

Mosaic’s earnings beat on higher potash, phosphate prices

Reuters Staff

k3 mosaic 3

(Reuters) – U.S. fertilizer company Mosaic Co (MOS.N) on Tuesday posted better-than-expected profit on higher prices and forecast strong sales of potash and phosphates for the current quarter.

Shares of Mosaic, the world’s largest producer of finished phosphate products, rose 2 percent to $21.25 in premarket trade.

Mosaic’s fourth-quarter sales for phosphates is expected to be 2.3 million to 2.6 million tonnes, compared to 2.5 million tonnes last year.

Potash sales will be 1.9 million to 2.2 million tonnes for the fourth quarter, compared to 2 million tonnes last year.

Operating earnings in the third quarter rose $70 million, despite a $26 million hit in its phosphates business from Hurricane Irma.

Mosaic sold diammonium phosphate at an average price of $329 per tonne, up from $326 a year earlier. Its average potash selling price was $182, up nearly 14 percent from last year.

Net earnings rose to $227 million, or 65 cents per share, in the third-quarter ended Sept. 30, from $39.2 million, or 11 cents per share, a year earlier.

Excluding items, the company earned 43 cents per share, beating analysts’ estimates of 18 cents, according to Thomson Reuters I/B/E/S.

Sales rose to $2 billion from $1.95 billion.

Reporting by John Benny in Bengaluru; Editing by Bernard Orr



Sask. carbon reduction plan coming by end of year, says minister

Sask. carbon reduction plan coming by end of year, says minister

Feds have given provinces until 2018 to decide on their preferred option

Dustin Duncan

CBC News Posted: Oct 26, 2017 1:07 PM CT Last Updated: Oct 26, 2017 1:31 PM CT

The Saskatchewan government says its own tailored plan for how to reduce carbon emissions will be unveiled in the next month and a half.

But little else is confirmed about the highly-anticipated plan.

Environment Minister Dustin Duncan gave a brief update on the plan Wednesday, following a throne speech that doubled down on the province’s staunch opposition to the carbon-tax-or-cap-and-trade demand the federal government issued to provinces.

Duncan suggested that industry members will be warm to the Saskatchewan proposal once it’s released before the current session of the legislative assembly wraps on Dec. 6.

“We want to build in a great deal of flexibility for how industry is going to achieve the standards that we put in place,” said Duncan.

“We’re still working that through the process in terms of what type of flexible mechanisms will be in place.”

Duncan also said that the plan will “build on” the climate change white paper released by the province a year ago.

Besides calling on the federal government to redirect more than $2 billion earmarked for climate change measures in developing countries to research and innovation programs in Canada, the white paper also proposed charging a levy on large emitters.That money is to be used for new technology and innovation to reduce greenhouse gases.

Deadline looming

Duncan went on to refer to the plan as “a much more fulsome, well-rounded plan” than either a price on carbon or a cap-and-trade system.

Saskatchewan is cutting it close: the federal government has given provinces until 2018 to decide on their preferred option.

Duncan said Saskatchewan expects to hear from Ottawa about its tailored plan before the deadline.

The throne speech highlighted other ways the province has looked to cut its emissions, such as SaskPower’s intended aim to expand renewable power to 50 per cent of its total generating capacity by 2030.

The utility’s Boundary Dam 3 project, which the province poured $1.3 billion into, has cut the province’s carbon dioxide emissions by 1.6 million tonnes, taking the equivalent of 400,000 cars off the roads, according to the government.




Cameco reports quarterly losses due to weak uranium prices

Cameco reports quarterly losses due to weak uranium prices

Uranium company expects weaker earnings in 2017 than last year

CBC News Posted: Oct 27, 2017 7:43 AM CT Last Updated: Oct 27, 2017 7:43 AM CT

Cameco — one of the world’s largest uranium producers — reported on Friday a quarterly loss and cuts to its production outlook due to weak uranium prices.

The Saskatchewan-based company reported net losses of $124 million this quarter, and adjusted net losses of $50 million. That’s compared to a profit of $142 million at the same time last year.

“There has been little change to the market and we continue to face difficult conditions, with the average year-to-date uranium spot price down about 20 per cent compared to the 2016 annual average,” said president and CEO Tim Gitzel.

Revenue for the company fell 27 per cent this quarter, from $670 million in 2016 to $486 million for the three months ended Sept. 30.

The company’s uranium production volume and sales volume has also fallen. Cameco posted 3.1 million pounds of uranium produced for this year’s quarter, compared to 5.9 million pounds this time in 2016.

However, sales volume has only fallen one per cent from 9.3 million pounds last year to 9.2 million pounds this year.

Cameco also lowered production outlooks for the year from 25.2 million pounds to 24 million pounds, due to production delays at the Key Lake mine.

Cameco expects 2017 net earnings to be weaker than in 2016, but Gitzel said they continue to generate solid cash flows and expect them to exceed the $312 million reported in 2016 despite weaker earnings.




First ship carrying potash from K+S mine leaves Port Moody terminal for Asia

First ship carrying potash from K+S mine leaves Port Moody terminal for Asia


Published on: October 26, 2017 | Last Updated: October 26, 2017 7:07 PM CST

K+S Bethune mine opening 2

The company behind Saskatchewan’s newest potash mine says its first ship loaded with fertilizer has weighed anchor and departed from its west coast terminal for customers in Asia.

K+S Potash Canada (KSPC) said in a news release that the ship carrying 30,000 tonnes of potash extracted from its $4.1-billion Bethune mine left its handling facility in Port Moody, near Vancouver, B.C., on Tuesday.

Burkhard Lohr, chairman of K+S AG, KSPC’s parent company, said in a statement that the commissioning of the company’s new port terminal and the departure of the first ship are a “decisive step forward.”

“We have started to supply the market with products from our new potash plant. We will also work consistently on proceeding with the next stage in the project, the ramping up of technical capacity to two million tonnes by the end of the year.”

The mine is expected to have a full production capacity of 2.9 million tonnes per year.

KSPC’s Bethune mine is the first new potash operation to be built in Saskatchewan in four decades. The Port Moody storage and handling facility is the product of a 2014 deal between KSPC and Pacific Coast Terminals Co. Ltd.

The price of potash has cratered since K+S AG announced plans to build the mine northwest of Regina, falling by more than 50 per cent, but the company has said it is taking a long-term view and relying on its low production costs.




PotashCorp forecasts robust demand

Temporary shutdowns at Allan, Lanigan still on as potash demand improves: PotashCorp


Published on: October 26, 2017 | Last Updated: October 26, 2017 5:58 PM CST

corey potash mine

The world’s largest fertilizer company still plans to temporarily shut down two of its mines this winter, despite record potash sales this quarter and its forecast for “robust” demand through the end of the year and into 2018.

Potash Corp. of Saskatchewan Inc. on Thursday confirmed it will halt production at the Allan and Lanigan mines for a total of 18 weeks, and temporarily lay off an undetermined number of workers, beginning next month.

“These are long-term plans we put together at the beginning of the year, and we do them at the same time as we do maintenance work (at the mines) … so we can’t skip them,” PotashCorp President and CEO Jochen Tilk said on a conference call.

“At the same time, we’ve taken shorter (production) downtimes than we had anticipated, to some extent, because demand is good. We plan them, we coincide them with maintenance work that we do, and we stick to them.”

The Saskatoon-based company made the announcement during what is expected to be its final quarterly financial report as an independent company ahead of its $US26 billion merger with Agrium Inc.

PotashCorp reported a 34 per cent decline in third quarter earnings compared to last year, but noted its year-to-date earnings are up 45 per cent: US$403 million in profit on US$3.5 billion in sales, compared to US$277 million on revenues of US$3.4 billion in 2016.

The company has previously said cost-cutting and “optimization” measures, including the decision to permanently close its only mine in New Brunswick, taken in the face of an oversupplied fertilizer market, are starting to take effect.

Tilk told reporters and analysts on the conference call that demand is up and market “fundamentals” have now improved for five consecutive quarters, leading to company record quarterly sales of  2.9 million tonnes of potash.

Asked whether the ramp-up of K+S Potash Canada’s new Bethune operation will affect PotashCorp’s business plan, Tilk said global demand of between 63 and 67 million tonnes means potash from the German company’s mine should “easily be absorbed.”

Tilk also confirmed that the merger with Calgary-based Agrium — which is expected to create Nutrien Ltd., a company with operations in 18 countries and 20,000 employees — remains on track to close before the end of the year.

The merger has come under scrutiny from Premier Brad Wall, who is concerned about maximizing the number of head office jobs in the province, and from the association of potash unions, which says there is still uncertainty about what it means for workers.


Which industry best creates wealth and reduces poverty in Canada? Resources (as usual)

Which industry best creates wealth and reduces poverty in Canada? Resources (as usual)

Mark Milke: What’s in the ground helped produce a dramatic increase in living standards over the last decade

Special to Financial Post

October 24, 2017
7:30 AM EDT

oil project

With the recent cancellation of TransCanada’s Energy East pipeline — after the company spent $1 billion in attempts to jump through ever-changing regulatory and political hoops — it is time to remind ourselves as Canadians where much of our country’s recent economic uptick originated.

Answer: In resource exploration and extraction.

This was illustrated again recently, just before the TransCanada announcement, with Statistics Canada’s recent release of key census data. The data revealed how median Canadian household income rose to $70,336 by 2015, up almost $6,900 from $63,457 in 2005 or nearly 11 per cent.

The provincial breakdowns are even more revealing than the national figure. Median income went up by $20,161 in Saskatchewan (37 per cent), $18,151 in Alberta (20 per cent) and $15,068 in Newfoundland and Labrador (29 per cent).

In contrast to these booming provinces, manufacturing in Central Canada took a hit

As Statistics Canada noted, “An important factor in the economic story of Canada over the decade was high resource prices.” The agency further observed how “that drew investment and people to Alberta, Saskatchewan and Newfoundland and Labrador, boosted the construction sector, and more generally filtered through the economy as a whole.”

In contrast to these booming provinces, manufacturing in Central Canada took a hit. Incomes there barely rose: Quebec saw a modest $4,901 rise (8.9 per cent) and Ontario was a national laggard with incomes increasing by a paltry $2,753 between 2005 and 2015 (only 3.8 per cent higher).

Which is where a caveat should be added to the Statistics Canada commentary that “high resource prices” explain significantly increased incomes. High resource prices — be they for oil, gas, lumber or minerals — help, but only if a province or region allows its resources to be explored, extracted and then shipped to market.

The Maritimes mostly sat out the boom in resource prices

The Maritimes mostly sat out the boom in resource prices because, for example, Nova Scotia and New Brunswick banned onshore exploration and extraction of natural gas. That was unlike Saskatchewan, Alberta and northern British Columbia.

Unsurprising then, New Brunswick’s median income in 2015 was $59,347, the lowest among all provinces. It did record 15-per-cent growth over the decade, but that statistic looks less impressive given New Brunswick’s low point in 2005 and its still-lowest ranking today. As a comparison, New Brunswick’s median income in 2015 was almost $8,000 lower than in Newfoundland and Labrador, where incomes soared by almost double that of New Brunswick. A lack of private sector investment in a profitable energy resource sector will do that.

Quebec provides other examples, both of foregone opportunities and the potential for income growth, when governments say “oui” to Canada’s comparative advantage in resources instead of “non.”

Quebec missed much of the benefit of higher resource prices because of political opposition to oil and gas

Quebec missed much of the benefit of higher resource prices because of some local and political opposition to oil and gas development. But of note, when the resource sector was allowed to thrive in Quebec, it did. As Statistics Canada observed “several metropolitan areas in resource rich areas had relatively higher income growth.” They include Rouyn-Noranda (+20.4 per cent), Val D’or (+18.0 per cent) and Sept-Îles (+13.4 per cent). That’s more “green” in the pockets of workers.

The lesson should be obvious: One comparative economic advantage for Canada is in natural resources. And this matters not just for faster-growing median incomes but also for drops in poverty. For example, resource-friendly Newfoundland saw the St. John’s low-income rate fall to 12 per cent from 16 per cent. Saskatoon’s low-income rate fell to 11.7 per cent from 15.2 per cent.

In contrast, Ontario, affected by the loss of 300,000 manufacturing jobs, recorded dramatic increases in poverty rates. That includes London (where low-income rates rose to 17 per cent by 2015 from 13.3 per cent in 2005) and Windsor (up to 17.5 per cent from 14 per cent).

It is clear from the data that resources are a critical driver of employment and incomes

Some people would still respond to all this with the old line that Canadians should seek to be more than “hewers of wood and drawers of water” (a phrase that wrongly depicts the forestry and hydro sectors as backward). That notion makes little sense because Canadians can and do invent, run and expand businesses in every sector, from hi-tech, to green sectors to tourism and finance, in addition to resources. But it’s clear from the data that resources are a critical driver of employment and incomes in Canada.

Insofar as politicians overlook resource advantages and hobble the sector with endless, ever-changing regulation, they ignore how what’s in the ground helped produce a dramatic increase in Canada’s living standards over the last decade.

To belittle or even attack Canada’s comparative advantage in resources is to neglect the positive effect this sector has on Canadian living standards. Snubbing opportunities in developing natural resources comes at the expense of additional jobs and better incomes for the poor and the middle class.

Mark Milke is an author and energy analyst.




BHP presents united front against activist Elliott at AGM


BHP presents united front against activist Elliott

Reuters Staff


By Barbara Lewis and Zandi Shabalala

LONDON, Oct 19 (Reuters) – The new chairman of BHP , the world’s biggest miner, threw his weight behind his CEO on Thursday after attacks from activist investor Elliott Advisers prompted speculation that the end of Andrew Mackenzie’s tenure was imminent.

Pressure has mounted on BHP and its chief executive since Elliott went public in April with its criticisms of the miner’s strategy.

“Any suggestion there is a set timeline around Andrew’s tenure is simply false and without merit,” Chairman Ken MacKenzie told reporters after his first AGM since taking office at the start of September.

Asked by a shareholder whether it was Elliott or the BHP board that was running the company, the chairman replied that “MacKenzie and Mackenzie” were running BHP, though he did not specify the order of the pair who share the same names but with slightly different spelling.

At least five representatives from Elliott Advisors, which holds 5 percent of BHP, attended the London meeting but did not ask questions from the floor.

Elliott declined to comment on Thursday, though it has welcomed the new chairman’s appointment.

Chairman MacKenzie said he had met more than 100 shareholders across eight countries, which he said gave him confidence, though he added that there are areas where the company needs to sharpen its focus.

He reiterated that work is in progress to sell shale assets, which is one of Elliott’s main demands, and that further action would take place to refresh the board of directors.


“We recognise that the board needs to continue to evolve to take into account the rapidly changing environment in which we operate. So we will undertake a review of the board’s skills and experience requirements during this financial year,” he said.

BHP’s London share price has risen nearly 7 percent since the start of the year, about half as much as that of its main rival Rio Tinto.

Both the chairman and the CEO said they were striving to maximise shareholder value and that meant that shale assets would be sold only at the right price.

“We will be both urgent and patient as we examine all the options,” CEO Mackenzie said. “We have to get the timing right to maximise shareholder value.”

BHP’s big rival Rio Tinto suffered a setback this week when the U.S. Securities and Exchange Commission (SEC) charged the company and two of its former executives with inflating the value of coal assets in Mozambique and concealing critical information. The company said it would defend itself vigorously against the allegations.

Chris LaFemina, a mining specialist at Jefferies bank, said he had preferred Rio over BHP for the past two years.

“While our preference has not changed, BHP’s competitive position has modestly improved,” he said in a note.

“New chairman Ken MacKenzie seems willing to push for significant strategic changes at BHP … after years of unacceptable underperformance of its share price versus Rio‘s.” (Editing by Elaine Hardcastle and David Goodman)

Agrium and Potashcorp receive regulatory approval in India

BRIEF-Agrium and Potashcorp receive regulatory approval in India

Reuters Staff

Oct 18 (Reuters) – Agrium Inc:

* Agrium and Potashcorp announce receipt of regulatory approval in India

* Potash Corporation of Saskatchewan Inc and Agrium Inc expect to close transaction by end of Q4 of 2017​

* Regulatory review and approval process continues in U.S. and China for proposed merger with Potashcorp​ Source text for Eikon: Further company coverage:

Husky gets approval from Saskatchewan to restart pipeline after oil spill

Husky gets approval from Saskatchewan to restart pipeline after oil spill

Husky spill clean up
Crews work to clean up an oil spill on the North Saskatchewan river near Maidstone, Sask., July 22, 2016.




OCTOBER 12, 2017

The Saskatchewan government has given Husky Energy the OK to restart a pipeline after a major oil spill along the North Saskatchewan River in July 2016.

The government says in an e-mail to media that testing, inspection and evaluation of the repairs to the line have been done.

The pipeline leaked 225,000 litres of heavy oil mixed with diluent onto a riverbank near Maidstone and about 40 per cent of the spill reached the river.

Husky’s own investigation concluded that the pipeline buckled because of ground movement.

The government says measures have been taken to mitigate the risk of a future failure at that spot, including thicker pipe on a sloped portion, ground movement monitors and gauges to measure strain along the replaced sections of pipe.

Saskatchewan’s Justice Ministry is still reviewing Husky’s response to alarms before the spill to decide whether charges should be laid.




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