Becoming home to the Pacific Northwest's largest oil-handling terminal isn't the only goal on the Port of Vancouver's to-do list. The port also wants to land a potash export facility, but its hope in that regard is running into global market headwinds.
The Wall Street Journal reported on Wednesday that the chief executive of the port's would-be partner in potash, BHP Billiton, hasn't ruled out building a $14 billion potash mine in Canada, from which the crop nutrient would be hauled by rail to the port's Terminal 5.
BHP CEO Andrew Mackenzie told the newspaper that the world's largest mining company, based in Melbourne, Australia, continues to weigh a possible push into the potash industry, even after the collapse of an influential producer cartel threatens to drive down prices for potash.
Analysts have said BHP would struggle to justify investing in the proposed Jansen mine in Canada's Saskatchewan province, according to The Wall Street Journal. That's because the collapse of a potash marketing alliance — Belarusian Potash Co. — may slash prices for the agricultural commodity by as much as 25 percent, to $300 a metric ton by the end of this year.
"The impacts of what we've seen recently are interesting, but we have to look forward tens of years in terms of potash supply to really understand what, if any, investment we'll make and at what pace," MacKenzie told The Wall Street Journal.
The Port of Vancouver is "still very optimistic" that the potash export facility will move forward, Theresa Wagner, the port's communications manager, said Wednesday in an email to The Columbian. The port's expectation "is that a lease will be in place by the end of October this year."
At stake is a project that's expected to generate thousands of temporary construction jobs, trigger at least $250 million in private capital investment and significantly boost the port's cargo tonnage. BHP's plan calls for shipping potash from the proposed Jansen mine by rail to the port, where it would then be loaded onto ships bound primarily for Asia.
Mackenzie declined to comment on when BHP might announce a decision on whether to proceed with the Jansen mine, The Wall Street Journal reported. Analysts estimate the company has already spent more than $1 billion on preparatory work at the site.