The Port of Vancouver is expected to continue to keep a key piece of property off the market in hopes of landing a potash export facility planned by a global mining company.
Port administrators are recommending the Board of Commissioners approve extending exclusive negotiations with BHP Billiton, with an eye toward wrapping up a final, long-term lease agreement with the company in October.
The board will vote on the recommendations during its regular public hearing today.
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.
The port originally anticipated securing a final lease deal with the Melbourne, Australia-based mining giant at the end of 2012. Construction would have followed shortly after that. But softening global demand for commodities forced the company to delay its plans to build a potash export venture at the port's Terminal 5.
Potash is a fertilizer ingredient used to boost crop yields.
Under an exclusivity agreement the port signed with the company in August 2010, the port agreed to not market roughly 45 acres of Terminal 5 to other prospective tenants. That enabled both BHP Billiton and the port to hammer out the details of a deal and to make some initial improvements to the site.
The arrangement also required the company to pay exclusivity fees to the port to keep the property off the market. At the end of 2012, BHP Billiton had paid the port about $2.24 million.
Under the extension commissioners will decide today, BHP Billiton would end up paying the port an additional $1.2 million to maintain exclusive rights to the property until Oct. 31 of this year, by which time officials hope to finalize a long-term lease.
If the long-term lease is secured, construction would start in early 2014, said Theresa Wagner, communications manager for the port.
Under the new exclusive arrangement, the port would also make additional rail-track improvements at Terminal 5 that were requested by BHP Billiton.
The company would reimburse the port for a total of $19.82 million — an increase of about $8.80 million from the original agreement — for the additional rail work it wants.
What BHP Billiton wants from that extra work, Wagner said, is a high-tech system that will enable it to move rail cars full of potash on an automated basis.
If a final deal cannot be reached with BHP Billiton, Wagner said, then the port is "going to have this amazing state-of-the-industry rail system out at (Terminal 5)," which could be marketed to other companies with designs on building a bulk-export structure.
Plans call for BHP Billiton to ship potash by rail to the port, where it would then be loaded onto ships bound primarily for Asia. The company would haul the potash from a mine it's developing in Canada's Saskatchewan Basin.