New mine will double Port Saint John throughput

By Christopher Williams

The world’s largest fertilizer company is expanding to meet growing demand and New Brunswick is receiving major rewards as Potash Corporation of Saskatchewan Inc. (PotashCorp) constructs its new $1.67-billion Picadilly Project, near Sussex, N.B., which is scheduled to be operational by 2014. The mine expansion is adding more than 200 full-time jobs at the site.

An hour’s drive away in Saint John, the port is expected to dramatically increase exports from the Barrack Point Potash Terminal to approximately two million tonnes of potash exports annually. Jim Quinn, President and CEO of Saint John Port Authority, says PotashCorp has a major economic impact in southern New Brunswick, particularly in the Sussex area. “At Port Saint John, the impact of the expansion will be to double potash exports and provide further economic activity to the region.”

Potash exports will also go a long way in feeding people around the world. “We are a food company (…) and we’re in the food business,” explained  Garth Moore, President of PCS Potash (a PotashCorp Division), at a presentation on May 9, 2012, for the Saint John Transportation Club.

With a Bachelor of Science degree in Mining Engineering, Moore began his PotashCorp expedition in 1982, holding senior mining operating positions including General Manager at both the Rocanville and Lanigan, Saskatchewan, operations.  Among other professional endeavours, Moore is Director of the Saskatchewan Mining Association and Chairman of the Saskatchewan Potash Producers Association.

Farmers need to maximize yields

“We play a significant role in helping meet the world’s need for fertilizer,” Moore says proudly, illuminating his point with slides that show how 3 to 4-per-cent growth in developing nations is changing food requirements. “They need to increase the protein in their diets and this demands more fertilizer. You need to get more yield-per-hectare because the challenge is growing more food on a relatively static arable land base.” Moore says balanced fertilization is the key contributor to achieving higher yields, particularly for Brazilian farmers, which are the biggest importers.

As many people have discovered in fertilizing a backyard lawn, potash is one of three essential crop nutrients, which include nitrogen and phosphate. Potash consists of potassium, mined from ancient evaporated sea beds. It boosts root strength and disease resistance. Potash also enhances taste, colour and texture of food. Soils are low in potassium in Brazil and other countries; hence, PotashCorp is increasing total operational capacity to 17.1 million tonnes by 2015 and will spend $7.3 billion on its development projects in New Brunswick and Saskatchewan.

“We are a Canadian company with a global footprint and we are very happy to be in New Brunswick. We’re spending $3 million per day between here and Saskatchewan, and last year it was about $5 million every day, just on the projects, not including our daily operating costs.”

11,000 jobs during construction

Economic spin-offs to the region are enormous. Moore says 11,000 jobs are being created in New Brunswick during construction between 2008 and 2014. Personal income generated by expansion-related employment in New Brunswick comes to $937 million over that six-year period. “That is personal income to construction workers and a lot of income tax too,” adds Moore.

PotashCorp invests 1 per cent of pre-tax profits into the New Brunswick community. That amount totaled $850,000 in 2011, all given to education, children and health. “We are looking after the people that are working and living around us. With 40 to 50 years of life in the mine, these investments hope to benefit everyone for a long time.”

The progress to replace the older 800,000-tonne Penobsquis mine with a 2-million-tonne mine at Picadilly has been one of the largest construction projects in New Brunswick’s history. Further to the construction of Picadilly’s two concrete head frames, sinking operations using drill and blast techniques required approximately two years to create two shafts. The production shaft plunges 750 metres and a tunnel from one shaft to the other allows crews to open up the ore body.

A new compaction plant adjacent to the Penobsquis mill was also completed last year, allowing PotashCorp to produce up to 100 per cent of granular product, if required to meet market conditions. And in 2009, a new brine pipeline from the Penobsquis went into service. The potash deposit was discovered at Picadilly while drilling for natural gas in 2002.

From the company’s Western operations, most customers are located in the U.S. “corn belt” and are more than 1,500 rail miles from mines. That distance from customers creates logistical challenges. “Winter months can be particularly difficult,” notes Mr. Moore, who says the ‘windy city’ of Chicago is a key gateway for North American potash shipments with over 60 per cent of North American potash shipments going through the corridor.

Port Saint John has strategic access

“Saint John is a good strategic location for us to serve South America,” Moore emphasizes. “Sailing time is less than from Vancouver and we can avoid the Panama Canal.” Potash destined for export customers is shipped to Saint John by rail and stored in two large warehouses, built in the 1980s, which handle 140,000 tonnes of potash and 75,000 tonnes of salt, a byproduct of the mining operation that is exported for de-icing roads.

Barrack Point Potash terminal is operated by Furncan, with labour by the International Longshoremen’s Association. The drybulk cargo is then loaded onto vessels using a high-speed conveyor system. “In the months ahead, PotashCorp and Saint John Port Authority will be exploring options to expand port facilities to support the new mine,” Moore concluded.