T h u r s d a y, N o v e m b e r 1 9 , 2 0 2 0
s a s k aT o o N s Ta r P h o e N i x
NP7
POTASH IN OUR PROVINCE 2020
While potash prices have declined in 2020, Saskatchewan potash production and sales volumes are, to date, at record levels, says minister of Energy and Resources Bronwyn Eyre. NUT R IE N’S AL L AN P O TAS H MINE /S MA.
Potash sales volumes for 2020 nearing record levels Saskatchewan boasts the world’s largest, high quality deposits of potash along with the most innovative and environmentallyfriendly mines.
“And with the world’s growing population, and less arable land available, potash is important everywhere crops are grown.” Demand for potash is massive, and competition for market share is fierce with Canada—or more specifically Saskatchewan—as the world’s top producer. The market has suffered from oversupply recently coupled with slowing demand from large nations like China, according to a report from earlier this year by CRU Int. Ltd. as reported in Progressive Farmer. JOEL SCHLESINGER But long-term demand is expected to grow from developing nations in South America and It’s been called an “ocean of potash.” The massive underground deposit of the Africa even as developed economies’ demand commodity in the southern half of the province growth slows. Canada’s production, is so large that Saskatchealmost exclusively from wan is also often referred to Saskatchewan, was about as the “Saudi Arabia” of the 13 million tons in 2019, key component in fertilizer. according to the U.S. GeoIndeed the province is logical Survey, followed by unique among global potBelarus and Russia. ash producers. “Combined, Russia and Underneath its fertile soil Belarus produce more potis 10 billion metric tons of ash than Saskatchewan, so potash. That’s the world’s they are very serious global largest, most high-quality competitors for our operdeposit of the vital comating companies here,” modity, which contains Schwann says. potassium, an element And these nations’ proused in everything from duction is increasing with health care to industrial new mines coming online, processes. Saskatchewan Minister of Energy likely leading to a lot of Most importantly, how& Resources Bronwyn Eyre. new product spilling into the ever, potassium is used in G OVT. OF SASK. global marketplace, potenfertilizer. “It’s one of the secret ingredients” in growing tially driving prices even lower. Already potash’s price has been slumping more productive crops, says Pam Schwann, executive director of the Saskatchewan Mining from oversupply due to over-production by Russia and Belarus among other players. Association.
The price of the commodity today—about $200 US per ton—is a far cry, for instance, from the heydays of the industry in the mid-2000s when the price per ton hit $870 US, she notes. Still Saskatchewan’s industry is thriving. “While potash prices have declined in 2020 compared to last year, Saskatchewan production and sales volumes are, to date, at record levels,” says Bronwyn Eyre, Saskatchewan’s minister of Energy and Resources. Even with over-supply, and uncertainty from COVID-19, the industry is as impactful as ever for the province’s economy. Eyre points to Saskatchewan’s 2019 production when producers here sold $6.3 billion worth of the commodity, directly employing more than 5,000 mine-site workers.
As well, the industry paid more than $700 million in resource royalties and taxes. Overall, Saskatchewan’s mining sector, of which potash accounts for about 80 per cent of all activity, accounted for ten per cent of the province’s gross domestic product. And potash’s importance should only grow. “The long-term outlook for the sector is strong due primarily to increased demand in developing countries,” Eyre says. The premise for growth is straightforward: A growing population needs more food grown on less arable land amid one of the greatest challenges to humankind: climate change. Potash sales volumes (story continued on page 2)
Food Security Starts with Us.
THIS SECTION WAS CREATED BY CONTENT WORKS, POSTMEDIA’S COMMERCIAL CONTENT DIVISION. TSXV: GSP
GENSOURCE POTASH CORP.
POTASH WITH PURPOSE Discover Gensource, a near-term fertilizer production company on a mission to help achieve food security by supplying a key macronutrient at an affordable cost within an open, transparent, and sustainable environment. • • • •
We sell and deliver Saskatchewan potash to more than 40 overseas countries.
We help the world's farmers grow more food.
Small-scale facilities with less environmental impact Innovative methods leave no salt tailings or brine ponds Vertically integrated business operations Long-term employment for local communities
Canpotex.com gensourcepotash.ca
306-974 -6414
NP8
T h u r s d a y, N o v e m b e r 1 9 , 2 0 2 0
s a s k aT o o N s Ta r P h o e N i x
POTASH IN OUR PROVINCE 2020 Canpotex CEO proud of company’s agile response to pandemic JEANNIE ARMSTRONG
When Gord McKenzie took on the role of President and CEO of Canpotex on January 17, 2020, he could never have fully envisioned the challenges this year would bring. Just two months into assuming leadership of Canpotex, the world’s largest exporter of high quality Canadian potash, the COVID-19 pandemic struck. “There were challenges that we couldn’t really have anticipated but quite honestly, we’ve really stepped up as a company and also as an industry. We’ve had to adjust but fortunately we’ve operated relatively normally through such a challenging time for so many industries. On March 15, Canpotex employees shifted to working 100 per cent from home. We’ve had to be agile in how we talk to our employees and to our customers. We’ve been able to do a good job setting up all of our employees to work digitally from home and continue to execute their day-to-day activities as well as connect with customers,” says McKenzie. Staying connected with customers in over 40 different countries—spanning South America, Latin America, North Asia, Southeast Asia, Oceania and Europe—is no mean feat. As the pandemic unfolded, Canpotex was able to rely on the strong bonds the company has forged with its customers during its 48-year history. “We feel fortunate that we have such a long history and have built up relationships and connections with our customers. Although COVID has forced us to connect with our customers digitally instead of face-to-face, we have been able to excel and deliver quite a decent year in the face of a global pandemic,” says McKenzie. Prior to joining Canpotex, McKenzie had achieved success in a variety of senior global sales and marketing positions in the fertilizer sector. “Over the past 25 years, I’ve built my career around agriculture and crop nutrition. I’m originally from Manitoba, grew up on the prairies, and did my agriculture degree at the University of Manitoba,” says McKenzie. Upon receiving his degree, McKenzie joined Cargill Crop Nutrition, which in 2004 merged with IMC Global to become The Mosaic Company. Most recently, McKenzie served as Vice-President, Global Sales with
Mosaic, which included responsibility for the company’s global phosphate and North American potash sales and marketing. Canpotex markets and delivers approximately 12 million tons of potash annually to 120 customers in 40 different countries around the world on behalf of its two shareholders: The Mosaic Company and Nutrien. McKenzie has extensive experience in working with highly competitive overseas fertilizer markets, laying a solid foundation for his leadership of Canpotex. “I’ve been very involved in the industry and already knew many of these customers around the world through Mosaic. I’ve now had an opportunity to learn more about our other shareholder Nutrien and have found it really rewarding to get closer to the Nutrien group over the past ten months.” McKenzie says he identified three goals that he wanted to accomplish during his first year as President and CEO. “First and foremost was to bring customer focus to Canpotex. That’s been an area that I’ve really enjoyed—building relationships with our customers. In addition to that, I am focused on bringing value to our shareholders— Mosaic and Nutrien— delivering on our commitments and building our reputation around execution and being a predictable supplier. The third area that I’d say was very specific for me coming in was to continue growing Canpotex as a great place to work, not just in Saskatchewan, but all of Canada. I’d like Canpotex to be viewed as the best employer—a place where employees can engage and develop their careers.” Canpotex is positioned to meet its target of exporting approximately 12 million metric tons of potash this year, says McKenzie. “We’re on track for our second largest volume year in our 48-year history.” Lower potash prices and a strong year for agriculture producers have contributed to the increased demand for potash, he notes. “The price of potash decreased pretty significantly last year, which contributes towards better affordability for farmers around the world, which also benefits our customers. Supply and demand are always connected, and the more affordable something is, typically there’s more demand for it. What we’re seeing right now is that affordability is in a very good spot.”
Gord McKenzie became president and CEO of Canpotex in January, 2020. CANP O T E X
McKenzie anticipates that Canpotex will see increased growth in 2021. “We’re seeing it both on price and value, as well as volume. We’re pretty optimistic about 2021. Agriculture will continue to be positive as it was in 2020. Growth in demand for potash has been tracking between two to three per cent annually. We certainly expect that trend to continue. The strong fundamentals are there. The demand for our products really starts with the farmer. When the economics are there, they’ll continue to grow the use of our products to help grow more food.” Canpotex sells and delivers over 15 grades of high quality potash exclusively to overseas markets. The company takes pride in the precision and efficiency of its supply chain. “It’s really part of our brand and our global competitiveness,” says McKenzie. Canpotex is constantly investing in and upgrading its transportation systems to ensure consistent and safe delivery of its products. “We have a fleet of over 5,000 railcars and this year alone, we purchased an additional 400 new ones. A bonus is, those railcars are all Canadian-made,” he says. Canpotex commissioned National Steel Car in Hamilton, Ontario, to manufacture the specially designed railcars. “These new railcars are stateof-the-art. They’re more efficient, they unload faster and they hold a bit more volume than the previous fleet. It’s part of our continuing effort to ensure that our potash arrives reliably and safely around the world,” says McKenzie. While Canpotex conducts business exclusively in global markets, the company really takes to heart its
“The demand for our products really starts with the farmer. When the economics are there, they’ll continue to grow the use of our products to help grow more food,” says Canpotex CEO Gord McKenzie. CANPOTEX
responsibilities as local citizens. “First and foremost, we are committed to being responsible members within our community. We are a proud Canadian company and Saskatchewan is our home. We’re proud to support a number of community initiatives that contribute to the food security of children,” says McKenzie. Programs that Canpotex supports include the Saskatoon Food Bank & Learning Centre’s Milk for Children program; the annual Jim Pattison Children’s Hospital Foundation Radiothon and Food for a Day program; and the Canpotex Weekend Investment in Nutrition program facilitated by the Salvation Army. “COVID-19 has created some challenges this year, limiting our staff’s ability to volunteer with these organizations in person. We do like to provide that volunteerism and support when we can and we will be there when they need us,” says McKenzie. Recognizing the effect that the pandemic has had upon food security in our community, Canpotex has increased its financial donations to organizations like the Saskatoon Food Bank. In addition to the $60,000 that matched community donations to the Food Bank’s Milk for Children program, Canpotex donated an addi-
tional $20,000. Canpotex also contributes generously to charitable organizations in the communities where staff work from its offices in Shanghai, China; São Paulo, Brazil; and Singapore. “In addition to financial donations, our staff support their local communities with their time and effort,” says McKenzie. As McKenzie’s one-year anniversary as CEO approaches, he reflects back on the challenges of 2020 and looks forward with optimism towards 2021. “Not everything about 2020 has been negative. Some good will come out of our experience in 2020, working through a global pandemic. I also recognize that as we flip the calendar page from 2020 to 2021, there won’t be a rapid switch back to how it was. The world has changed. We’ll continue to work our way through COVID-19 and the impact on the overall economy in the world around us. We’re learning as we go and making important improvements in how we do things, how we connect with our employees and our customers around the world,” he says. “I’m excited now more than ever about the future, recognizing the opportunities that we have in front of us.”
Potash sales volumes (story continued from page 1)
Yet the path to growth is not a straight line upward because of the nature of the global marketplace where Saskatchewan’s top competitors “are price-cutters,” says Steve Halabura, geologist and owner of Concept Forge Inc, a mining consultancy firm based in Saskatoon. That said, the province has several advantages due to a variety of factors that should bear fruit in the long run. “Saskatchewan’s advantage is first of all quality of product,” he says. What’s more, the province is home to the largest producers in the world, which are constantly seeking to become more efficient, innovative and environmentally friendly. The province’s industry is a who’s who of major producers. Chief among them is Nutrien—formed two years ago after PotashCorp and Agrium merged. The world’s largest potash miner, and headquartered in Saskatoon, it operates six lower-cost mines in the province with a capacity to produce 20 million tons annually, as listed on Nutrien’s website. The Mosaic Company is the second-largest producer and operates four mines, including a solution operation at Belle Plaine. (Solution mining is increasingly commonplace because of its ability to extract potash from deposits with typically a smaller environmental footprint than most conventional underground mines.) Other major mining firms are investing in the province too. Those include German-based mining firm K+S, which opened the first new operating mine in the province in 40 years near Moose Jaw. It too uses solution mining technology. As well, Australian multi-national BHP is closing in on completing its Jansen project—a conventional
Pam Schwann, President, Saskatchewan Mining Association. S MA.
underground mine—east of Saskatoon. But after spending several years in planning and development, along with billions of dollars, the company is still considering whether to continue—a decision expected to come in 2021. Smaller players also look to gain a hold, like Western Potash. It’s in the process of developing its Milestone project near Regina, using advanced solution processes that the company claims leave no salt tailings on the surface, making it one of the greenest operations on the planet. Yet Western Potash is facing challenges too due to funding delays caused by COVID-19. In general the pandemic has hurt producers, presenting several logistical obstacles for operating mines with respect to workplace safety requirements—such as physical distancing. But the measures put in place to overcome these challenges have been “very successful and allowed potash production at all operations to continue with minimal interruptions and impacts,” Eyre says. Even so, other headwinds are adding uncertainty to the industry’s
K+S Potash Canada’s Bethune mine is the first greenfield mine to have been built in Saskatchewan in more than 40 years. S M A .
near-term growth. Those include federal climate change initiatives such as the carbon tax, the proposed Clean Fuel Standard and Bill C-69, which involves higher environmental standards for new projects. Taken together they potentially may create an uneven playing field for Saskatchewan producers competing in a global marketplace, Schwann says. She further argues the province’s industry already has the highest environmental and safety standards in the world. “This year, the market was quite good and we’re anticipating they will remain strong next year, but the big question is can we maintain our market share given our increased cost structure?” The industry is on track to produce 21 million tonnes from the province’s 11 operating mines, she says. And growth is expected to continue
globally at about 2 to 3 million tons per year. Despite the growth, Schwann says many in the industry are concerned added regulations may harm Saskatchewan producers. “Potash produced in Saskatchewan is done with 70 per cent fewer greenhouse gas emissions than our global competitors, so if we end up reducing potash production in Canada because of compliance with regulation to reduce greenhouse gases, all we’re doing is shifting that offshore where they can’t produce it as environmentally efficiently as we can.” Still Halabura is among those in the industry who see opportunity amid more regulation thanks to innovation. “There is this revolution going on in the industry.” Halabura should know. He is also the CEO of Buffalo Potash Corp, another company proposing to use
advanced solution mining techniques to extract high-quality potash used in custom blends of fertilizer that are in growing demand among North American farmers. Current challenges aside, he notes the province is poised to grow into an even more dominant position globally because it produces a better product. That’s especially important to agricultural producers in our own back yard and others seeking more advanced fertilizers that leave less by-product in the soil. But more than anything, Mother Nature’s bounty simply favours Saskatchewan, Halabura says. “This province has got so much potash still in the ground that if the province really puts its wheels to it we could really get the economy going.”
T h u r s d a y, N o v e m b e r 1 9 , 2 0 2 0
s a s k aT o o N s Ta r P h o e N i x
NP9
POTASH IN OUR PROVINCE 2020 Worker safety continues to be a priority for potash industry during pandemic JENNIFER JACOBY-SMITH
As the WHO declared a global pandemic earlier this year, mines across Saskatchewan were pulling out their pandemic plans and submitting them to the Chief Mines Inspector. Those plans had been created years ago, ready to deploy, should the world ever face a serious pathogen like SARS-COV-2, the virus that causes COVID-19. In consultation with northern community leaders it was decided to put all northern mines into “care and maintenance”. This was due to the outbreak that occurred in the La Loche and Beauval area as a number of mine workers were from these communities. “In order to provide assistance the SMA donated a number of masks and surface sanitizing products to help slow the spread of coronavirus in these communities,” says Brad Sigurdson, Vice President Environment, Safety and Regulatory Affairs with the Saskatchewan Mining Association. Recognizing the urgency, the Saskatchewan Mining Association (SMA) and their members reached out to the Saskatchewan Health Authority (SHA) to provide assistance and share their critical resources of personal protection equipment (PPE). It was a gesture that was deeply appreciated during the early days of the pandemic as PPE was difficult to track down. “It was an ‘all hands on deck’ approach,” says Sigurdson. “Everyone was just trying to do everything they could to support the efforts (of health care workers).” As part of their pandemic response, the SMA Industrial Hygiene Focus Group went from quarterly meetings to meeting weekly in order to
Shawn Maloney, Training Specialist, Wet Processing for K+S Potash Canada adheres to the company’s protective mask protocol while at his work station. K+S Potash Canada requires its employees—both administrative and operations—to wear protective masks while in common areas or at shared work stations in all locations to help protect against COVID-19. K + S P O TAS H CANADA
address emerging issues such as current health orders, availability of PPE, and worker safety. “Back when this first started there were lots of unanswered questions,” explains Sigurdson. “People were very concerned. Workers were concerned. Their families were concerned. Obviously, companies were very concerned with how this was going to roll out. Do we have enough PPE? What PPE do we have? Talking about supply chain issues and stuff like that.” The Industrial Hygiene Focus Group created a number of guidance documents for member companies that would explain what safety precautions should be taken at mines and mill sites, corporate offices, mining work camps and exploration work camps.
The guidance documents were tailored to specific areas. What was needed in a corporate office, for instance, was different than what was needed at a work camp. Clear communication of safety precautions was a critical step as it helped allay concerns from workers, as well as their family members. Infographics were also created to give a quick visual summary of how to stay safe while working on site. Guidance documents were shared with family members to “help highlight some of the measures being taken to protect loved ones while they are at work,” adds Sigurdson. Numerous townhalls were also held to communicate to workers how important the safety measures were and, once again, address any concerns. Some of the items in the guidance documents included: • Establishing a pre-site access screening questionnaire. • Increased COVID-19 communication for workers. • Commitment to physical distancing. • Increased focus on personal hygiene with hand-washing and hand-sanitizing locations throughout sites. • Increased sanitization on high touch points. • Reduced numbers of people allowed in common areas, including elevators used to get underground. • Break schedules and shifts have been adjusted to limit the number of people on site at any time, as well as, limiting break-time interactions between workers. • Increased focus on mental health. Because many workers were dealing with other concerns brought on by the pandemic—such as a sick family member or knowing
someone who lost their job or children who were no longer in school—workers were encouraged to reach out to supports and check in with each other. In addition, non-essential workers from both sites and corporate offices are encouraged to work from home. “We take this pandemic very seriously and our members remain committed to working with the SHA and our Chief Mines Inspector to ensure that we are managing this pandemic in a safe and responsible manner,” says Sigurdson. “We also want to recognize the added diligence of our employees in ensuring they follow all of the guidance provided by the SHA, Chief Mines Inspector and our members.”
As the pandemic continues, Sigurdson says the SMA and members will continue to evolve and adapt to make their worksites as safe as possible. They’re currently testing innovative PPE and looking forward to new rapid testing being available from Health Canada. He credits workers throughout their member companies for giving feedback on what was working and what wasn’t. The SMA is also working with a company called Quantum Genetics on a screening procedure. “As you can imagine, their working environment has changed significantly and their commitment to adapting to these challenges is very much appreciated. They’ve done an outstanding job, obviously.”
COVID-19 ENHANCED SAFETY MEASURES FOR SASKATCHEWAN MINING INDUSTRY
PHYSICAL DISTANCING
2M
SPACING
INCREASED
HANDWASHING
PPE
PERSONNEL
PERSONNEL
REDUCED
STAGGERED
IN ELEVATORS
IN VEHICLES
SCREENING QUESTIONNAIRE
STAGGERED SEATING
FOR EACH WORKER
ON FLIGHTS AND BUSES
REDUCED
REDUCED PERSONNEL
INCREASED SANITATION
ON SITE
OF HIGH TOUCH AREAS
MARKER LINES
FLOOR
BODY TEMPERATURE
BREAKS AND SHIFTS
FOR PHYSICAL DISTANCING
SCREENING
INCREASED
INCREASED FOCUS
IF SICK
COMMUNICATION
ON MENTAL HEALTH
STAY AT HOME
The Saskatchewan Mining Association determined that communication of COVID-19 safety precautions was a critical step to allay concerns from workers, as well as their family members. Infographics were created to give a quick visual summary of how to stay safe while working on site. SMA
NP10
T h u r s d a y, N o v e m b e r 1 9 , 2 0 2 0
s a s k aT o o N s Ta r P h o e N i x
POTASH IN OUR PROVINCE 2020 Saskatchewan potash producers work with community partners to provide COVID-19 relief ELIZABETH IRELAND
During this time of economic uncertainty and a pandemic, the potash industry’s community support initiatives are more vital than ever. Three leading potash producers, with mining operations in Saskatchewan, are maximizing their outreach programs in order to help local organizations protect against food insecurity.
K+S POTASH CANADA
K+S Potash Canada (KSPC) operates a potash mine and production facility in Bethune, Saskatchewan and has a corporate office in Saskatoon. As well, a small group of employees work at its handling and storage facility in Port Moody, British Columbia. Melissa Shepherd is communications and corporate affairs specialist at KSPC. “K+S Potash Canada has been fortunate to continue producing during COVID-19. We felt it was pretty natural for us to support food-related community initiatives during this time considering the nature of our product,” says Shepherd. In April, KSPC announced a partnership with the Food Banks of Saskatchewan by matching every donation made (up to $50,000). By May 3, a total of $100,000 was raised for the organization. Food Banks of Saskatchewan is an umbrella agency that supports urban and rural members across the province. In addition, KSPC provided each employee with $300 to donate to an organization of their choice. This was an adjustment to the regular Volunteer+ program which combines eight hours of paid volunteer time with a donation by KSPC. “We asked employees to choose organizations to donate to that are providing COVID-19 relief in some way to their community,” explains Shepherd. KSPC’s overall community involvement focus is on young people. Its K+S Youth+Us initiative supports opportunities for youth to engage, create and discover through education, leadership experiences, sports, art and culture. K+S Youth+Us is grouped around the pillars of growth and development, health and wellbeing, and leadership. Organizations and initiatives supported by K+S Youth+Us include Creative Kids Saskatchewan, Earth Rangers, HoopLife Basketball Training in Regina, and
YMCA Strong Kids. While KSPC’s larger partnerships typically have a more provincial focus, the company continues to support initiatives in the communities where employees and their families live: Moose Jaw, Regina, Saskatoon and the Bethune area. “Across the board, our community partners have been so agile and really amazing at adjusting to the realities of COVID-19. It is wonderful to watch. We didn’t stop any funding, even when programs and fundraisers were forced to go digital. We are still accepting funding requests for our next fiscal year,” says Shepherd.
THE MOSAIC COMPANY
During March and April 2020, the Mosaic Company announced wide-ranging investments to help communities manage through the COVID-19 pandemic. “Mosaic has a long history of investing to ensure communities where we work and live stay vibrant. Our communities needed urgent help to deal with the pandemic, and we were honoured to do our part by providing the resources to address the most critical needs in local communities. Mosaic’s mission is to help the world grow the food it needs, so supporting these organizations and causes, based on local needs, helps us do just that,” says Sarah Fedorchuk, Mosaic’s Vice President, Government and Public Affairs – North America. Globally, Mosaic made investments totalling $1.5 million to help feed the hungry and to provide critical supplies to farmers and others. In Saskatchewan, Mosaic focused its efforts on three funding initiatives. The company provided $100,000 to 10 First Nation partners surrounding Mosaic’s potash operations to deliver food programming and other urgent community support, as well as to provide economic relief to the Regina Treaty/ Status of Indian Services. To support vulnerable families, Mosaic provided $75,000 to the North Central Family Centre in Regina and towards food-related programming. Plus, Mosaic’s donation of $20,000 to the Canadian Red Cross in Saskatchewan assisted with pandemic response efforts. “One of the challenging aspects for many of our partners is the sudden loss of fundraising streams from annual events or fundraisers.
From ground to grower, we’re proud to help feed the future.
Nutrien has long-time partnerships with the Friendship Inn, Saskatoon Food Bank & Learning Centre, and the White Buffalo Youth Lodge. “We are in the food business so everything we do targets food security, including educating youth about food security and nutrition,” says Nutrien Executive Vice President and CEO of Potash, Ken Seitz. NUTRI EN
Without support dollars raised from these expected and celebrated events, many organizations are struggling to find new ways to bring in funding that they count on each year. For our long-time partners, we provided our committed funding—event or not—to use as
they need to ensure the people they serve have continued access to programming and services,” says Fedorchuk. Community partnerships (story continued on page 7)
WE’RE HIRING!
Providing innovative rail support services for more than 40 years. Looking for a regular schedule, ownership opportunities and competitive wages? Consider a career with Cando. We employ people with a variety of rail and industrial skills. Current openings in Saskatchewan include: • • • •
Operations Supervisor - Esterhazy Locomotive Operator/Switchperson - Esterhazy Railcar cleaner - Esterhazy Railcar cleaner - Belle Plaine
Apply today!
More than a job. Think career. Think ownership.
VISIT CANDORAIL.COM FOR MORE DETAILS
With six mines across Saskatchewan in our potash network, we are focused on growing our world from the ground up.
Together, Creating the Minerals Industry of the Future
T h u r s d a y, N o v e m b e r 1 9 , 2 0 2 0
s a s k aT o o N s Ta r P h o e N i x
NP11
POTASH IN OUR PROVINCE 2020 Mining industry demonstrates the importance of stimulus spending on the local economy PAT REDIGER
During a time of much-needed economic stimulus spending by the Government of Saskatchewan, the Saskatchewan Industrial & Mining Suppliers Association (SIMSA) is advocating that this funding stay in the province to benefit local businesses, employees and their families. “As the only supply/construction related association that represents the voice of Saskatchewan suppliers—and only Saskatchewan—our members can help keep that stimulus money and its impact close to home,” says SIMSA Executive Director Eric Anderson. He added that stimulus spending is designed to boost the local economy so it is vital that this funding be used by Saskatchewan owned and operated businesses to benefit the local economy. There is a significant multiplier effect as local businesses support other nearby businesses and that money impacts family and friends in communities throughout the province. A recent study by PricewaterhouseCoopers which estimated that every dollar spent with local Saskatchewan suppliers generates nearly four times more economic output for the province than the same amount spent with out-of-province suppliers supports this approach. According to the survey, each dollar spent exclusively with local suppliers generates $1.51 in total economic output from the province, compared to $0.39 that is generated by purchases from out -of-province suppliers. Anderson said that SIMSA realized from the day it formed in 2013 that it needed to represent the needs of Saskatchewan suppliers in the mining, energy and industrial sectors.
It does not focus on suppliers from other provinces who are working in Saskatchewan. “SIMSA built a requirement into its membership criteria that remains to this day: in order for a company to be a member, it must have a permanent physical office in Saskatchewan and at least three full-time employees based in the province. This office must have a permanent foundation—not on wheels and a permanent address—not a post office box or lawyer’s address. In short, it must be a place of day-to-day operations, not a place where business is occasionally conducted for the purpose of maintaining a favourable public image,” explains Anderson. Another example of the importance that SIMSA plays on local business is that candidates for its board must be senior decision makers from companies whose world headquarters are based in Saskatchewan. This ensures that the interests of Saskatchewan are protected and served. Anderson said the importance of Saskatchewan stimulus spending being used by local businesses surfaced after the provincial government hosted a session to discuss new stimulus spending measures. SIMSA members began to wonder why money that was targeted to assist Saskatchewan businesses was being accessed by suppliers from outside the province. This would mean that Saskatchewan would miss out on the multiplier impact that the stimulus spending could have on the province. That’s why SIMSA introduced a campaign in late September encouraging the provincial government to place an emphasis on ensuring Saskatchewan suppliers received a greater share of stimulus spending initiatives. Following an open letter to the government, SIMSA has been
promoting the impact that procurement dollars have in the province. SIMSA has used a somewhat similar approach with other industry sector businesses to enable them to source local suppliers. The association often hosts roundtable meeting events in which purchasers and suppliers can meet and discuss common concerns. “For instance, we will invite a mining company to bring out some of their executives and team members to discuss where they are going, what they are doing, how to better sell to them, and to give our members a heads up on the opportunities. It’s about building relationships,” says Anderson. SIMSA will be co-hosting with the Saskatche“If a mining company builds something in Saskatchewan, they can take money they have wan Mining Associaacquired from other parts of the world and spend it here in our province. Every dollar tion and the Ministry of they spend here has the multiplier effect,” says Eric Anderson, Executive Director of the Trade and Export DevelSaskatchewan Industrial & Mining Suppliers Association SI MSA opment, the Virtual Saskatchewan Mining website at simsa.ca and is fully they can access many of the goods Supply Chain Forum on Dec. 2-3 to discuss business oppor- searchable and sortable by major and services they are looking for in tunities for local suppliers. This resource sector companies. The Saskatchewan through local suppliforum is the primary mining supply fields within the database reflect ers. “If a mining company builds somechain event in Western Canada that those typically found in pre-qualibrings together the Saskatchewan fication forms used by these types thing in Saskatchewan, they can take money they have acquired from mining industry and local suppliers of companies. Anderson emphasizes these types other parts of the world and spend to enhance their global competitiveof tools are necessary to help attract it here in our province. Every dollar ness and expand markets. investment dollars in the province. they spend here has the multiplier To assist industry in identifying Saskatchewan suppliers, Anderson Mining corporations can spend effect. It’s really debt-free stimulus said SIMSA developed the Sas- significant amounts when they are spending when a mining company katchewan Supplier Database. The expanding or maintaining their decides to spend their money here,” database operates from the SIMSA operations and it’s important that he says.
Helping Sustain Life Around the globe, crops are grown using potash mined right here in Saskatchewan. Potash ensures global food security and economic success for our province. During these unprecedented times, we are proud that our operations at the K+S Potash Canada Bethune mine have provided stability and peace of mind not only for our customers, but for our most important resource – our employees. Our organization continues to support and contribute to local communities and businesses, ensuring a brighter future for all.
Read more about the work we do at www.ks-potashcanada.com
NP12
T h u r s d a y, N o v e m b e r 1 9 , 2 0 2 0
s a s k aT o o N s Ta r P h o e N i x
P O TA S H I N O U R P R O V I N C E ADVERTISEMENT
SIMSA had a plan, so how did we do? When the initial planning for the Saskatchewan Industrial and Mining Suppliers Association (SIMSA) was being done in 2012 through 2013, several goals were set. So, how did we do? Following consultations with a number of Saskatchewan suppliers to the mining and resource industries, a group of local supplier-company persons incorporated SIMSA in March 2013. The Association was initiated by a board of eight, and when SIMSA’s logo was created—the eight green dots in it—are representative of the eight original directors. It should be noted that the Saskatchewan Ministry of Trade and Export Development played a key role in SIMSA’s formative process and its early operations. At that time, Saskatchewan’s mining sector was on the end of a major capital spending initiative by several mining companies. The thought was that Saskatchewan suppliers had not captured enough of the spend, as they wrote in SIMSA’s planning documents, “Clearly there is an opportunity to increase Saskatchewan’s participation in supplying goods and services in the resource industry.” They went on to say that, “To this point, the extensive Saskatchewan supplier base serving these industries has not been well represented.” In a unique environment of cooperation, a sector review was completed and SIMSA was conceptualised. They wrote, “Industry understands the importance of working together to assist in promoting Saskatchewan capabilities and has an interest in working
collaboratively to capture more work within Saskatchewan borders. This desire to work together and to promote local capabilities has resulted in the formation of the Saskatchewan Industrial and Mining Suppliers Association (SIMSA).” SIMSA’s primary focus was to be on increasing the Saskatchewan-based market share in Saskatchewan projects and representing the interests of the members, in order to influence government and industry. The key criteria for membership were that a company had to have a permanent physical office and at least three employees in the province. In the beginning , the Association’s membership included 22 companies. The goal of 100 members was targeted for 2016; 200 members for 2018; and 300 members for 2023. A target of hosting two to three events per year—a combination of social, networking, and education— was set for 2016, and four events per year was foreseen at 2017. In ten years, SIMSA was to also be the go-to place for market information on projects/opportunities. The activities foreseen would, “Proactively promote Saskatchewan capabilities to producers, EPC/EPCM, and OEM companies within the geographic region of Saskatchewan.” They also thought that, “Materials and tools will be developed to educate, engage, and raise awareness.” Plans for a website were made, which was to “… include an on-line searchable database,
SIMSA hosts at least 12 educational and procurement related events per year, in partnership with Saskatchewan’s major mining and energy companies. SUP P LIED
profiling members’ goods and services capabilities.” They foresaw that SIMSA, “…will partner with other organizations on issues and activities of common interest while representing the Saskatchewan priorities that have not been currently captured by existing supplierbased organization. The intent of SIMSA is to partner and leverage activities with existing associations (both resources based and general business) where common interests exist while profiling Saskatchewan supply solutions.” TODAY: • SIMSA hosts at least 12 educational and procurement related events per year, which is well ahead of the target of four. These events are largely in partnership with Saskatchewan’s major mining and energy companies plus their EPCMs, and have been the catalyst for the Association’s growth. • SIMSA now has over 220
members and has actually grown through the COVID crisis. C o m p a r a t i v e l y, SIMSA’s membership was 74 in September of 2016 and almost tripled within the subsequent three-years, while another construction related association saw more than a 40 per cent decline in membership. The target of 300-members by 2023 is still on track. • The Saskatchewan Supplier Database has been built: a sortable shortlisting tool of SIMSA member abilities and products. This item was paid-for and designed in collaboration with BHP, G o v e rn m e n t o f C a na d a , Government of Saskatchewan, Husky Energy, Mosaic, Nutrien, S a s k E n e r g y, S a s k Po w e r, TC Energy. The database generated $97-million in sales for SIMSA members over the past year. • SIMSA provides daily markets and services updates by email, as well as a monthly
The eight green dots in SIMSA’s logo are representative of the eight original directors. The association was established in 2013 by a group of Saskatchewan suppliers to the province’s mining and resource industries. SIMSA now has over 220 members.
newsletter. SIMSA regularly meets with government and other associations, in a cooperative effor t to build a be tter Saskatchewan. • The initial vision for SIMSA’s activities and how it was to function, were captured and always kept in
mind. By following them, the membership grew as forecasted. The current pandemic required SIMSA to shift from an inperson to a virtual delivery mode—and provide some training on it—but the spirit in which things are done and the focus on Saskatchewan’s supply chain has and will not change.
THIS STORY WAS PROVIDED BY THE SASKATCHEWAN INDUSTRIAL & MINING SUPPLIERS ASSOCIATION (SIMSA) FOR COMMERCIAL PURPOSES.
Keeping impact in SK Did you know that every dollar spent with local Saskatchewan suppliers generates nearly four times more economic output for the province than the same amount spent with out-of-province suppliers? 1 As the only Association that represents the voice of Saskatchewan Suppliers – and only Saskatchewan suppliers – SIMSA helps mining companies keep their spending close to home, at a time where local impact matters more than ever. Learn more at https://simsa.ca/letter
What one procurement dollar means to Saskatchewan:
When spent with an out-of-province supplier
When spent with an in-province supplier
Economic output
$ 0.39
$ 1.51
GDP
$ 0.56
$ 0.86
Labour income
$ 0.23
$ 0.34
Taxes
$ 0.12
$ 0.18
1
Source: The economic impact of local resource suppliers in Saskatchewan, PWC (2019)
www.simsa.ca
T h u r s d a y, N o v e m b e r 1 9 , 2 0 2 0
s a s k aT o o N s Ta r P h o e N i x
NP13
POTASH IN OUR PROVINCE 2020
The Gensource potash mine has a smaller environmental footprint than conventional potash mine sites. “We have with no salt tailings and no brine ponds of any kind,” says Mike Ferguson, CEO of Gensource Potash Corporation. GENSOURCE
Gensource potash model a good fit for smaller communities CAROL TODD
Like our favourite football team, a Saskatchewan company is poised to hold the opening kick-off of a major project next year. The Gensource Potash Corporation mine planned for the Tugaske area has cleared almost all of its hurdles and is set to go next year—all that remains is the green flag from the financiers, says Mike Ferguson, the company’s President and CEO. “We have passed through the due diligence process, so all the technical and legal and market and environment reviews have been completed to the satisfaction of everybody,” he says. The project recently received the go-ahead from the local community, with the approval of the Development Permit by the Rural Municipality (RM) of Huron, in which the project will take place. In a news release, Corey Doerksen, the reeve of the RM was quoted as saying they have been “impressed” with Gensource’s “operation and handling of the upcoming project” and that the RM looks forward to working with Gensource into the future. Ferguson believes that the support of the people in the area in and around the proposed mine is crucial. “We’ve taken the approach, right from the very beginning, that local community and social license are a key part of how you should be doing these projects,” he says. The size of the project and its environmental footprint, part of the new way Gensource mines potash, helps. “Our projects are so different, fundamentally, in terms of their size, and scope and environmental impact, [they] fundamentally fit better with these Community partnerships (story continued from page 4)
NUTRIEN
Nutrien currently has six potash mines operating in Saskatchewan, including its largest mine located in Rocanville, southwest Saskatchewan. Globally, Nutrien employs more than 22,000 people through its mining and retail operations. Based out of Saskatoon, Ken Seitz is Nutrien’s Executive Vice President and CEO of Potash. “During COVID-19, our approach has been to get out front where the needs are greatest and where people are the most vulnerable. We are in the food business so everything we do targets food security, including educating youth about food security and nutrition,” says Seitz. In Saskatoon, Nutrien has longtime partnerships with the Friendship Inn, Saskatoon Food Bank & Learning Centre, and the White Buffalo Youth Lodge. Relating to school nutrition initiatives, Nutrien’s recent support includes Greater Saskatoon Catholic Schools’ nutrition kits, Saskatoon Public Schools Founda-
Mike Ferguson is CEO and President of Gensource Potash Corporation. G E NS O URCE
smaller communities in Saskatchewan,” Ferguson says. Unlike bigger projects, which can overwhelm a community, Ferguson says Gensource’s model for smaller mines is a game changer for the potash industry in general. The Tugaske mine will produce about 250,000 tons of muriate of potash (MOP) per year, which is about a tenth of a typical potash operation. It will also employ fewer people — roughly 150 for the construction and fewer than 50 once the mine is in operation. While larger operations do have a greater economic impact on an area, Ferguson says they also have a larger social effect. “No matter what you do, that doesn’t fit into a small community. It fundamentally changes a community and that’s what we were trying to avoid here by the small-scale, efficient operation. It’s setting a new bar—you don’t have to obliterate the community—you can be part of the commution Cheer Crates and the Salvation Army’s Food on the Move program. Nutrien also provided in-kind donations of personal protective equipment (including N95 masks) to those on the health care frontlines. Seitz describes “increased demand for food banks in Saskatchewan.” As a result, Nutrien contributed to the Food Banks of Saskatchewan through its COVID-19 Community Support Plan. With its sustainable agriculture focus area in mind, Nutrien also donated to initiatives identified at the community level, such as the Moosomin Harvest of Hope project. Another initiative through Nutrien’s COVID-19 response was a partnership with Saskatoon Tribal Council, File Hills Qu’Appelle Tribal Council, local businesses and other partners to support a garden project. Donations included raised garden boxes and materials for families in 18 Indigenous communities across Saskatchewan. In terms of an update on the new Nutrien Tower at Saskatoon’s River Landing, construction has continued throughout the pandemic. Nutrien has leased nine floors which will accom-
nity,” he says. A smaller mine also means a smaller environmental footprint and the Tugaske project was deemed “not a development” by the provincial government. “So that was the first time ever for a potash project and it does underline the confidence that we have in the strong environmental profile that we have with no salt tailings and no brine ponds of any kind,” Ferguson says. Along with the positive aspects of its size and environmental impact, Gensource’s Tugaske project, and those that follow, are part of what Ferguson has called the “new standard for the industry.” The company has also committed to vertical integration in its business model, allowing a more direct link between the mine’s production and the ultimate users of its product. To that end, HELM Fertilizers Corp. of the U.S. has agreed to purchase all of the annual production from the Tugaske Project and market directly to its customers using its own infrastructure. With the approval of the R.M., a ready market, and with the environmental aspect dealt with, only the financial end needs to be finalized before the project can kick off with the construction phase early in the new year. “Once you’re working with banks, it’s out of your hands: bureaucracy takes over and you just sit and wait,” Ferguson says. Gensource’s senior lenders, KfW and Société Générale, are said to have essentially completed their due diligence and the final step is to obtain approval by the German Export Credit Agency, Euler Hermes. Similar to Export Development Canada, the agency provides export insurance and
project financing coverage. As part of that process, Gensource is working with MAVEG Industrieausrüstungen GmbH, which will act as a general procurement agent. With just the Euler Hermes approval still to go, Ferguson says Gensource, and the community in
SASKATCHEWAN POTASH Nourishing the earth A snapshot of Saskatchewan’s potash industry
ECONOMIC CONTRIBUTIONS 1
Vanscoy
2
Cory
3
Patience Lake
4
Allan
5
Colonsay
6
Lanigan
7
Bethune
8
Belle Plaine
9
Esterhazy K1
FINANCIAL CONTR I B UTION TO G D P:
$5.52B
10 Esterhazy K2 11 Rocanville SASKATOON 1 2
3 4 5
7
6
REGINA 8
9
10
11
$5.52 billion
TAXE S
(FEDERAL, PROVINCIAL AND LOCAL):
EMPLOYMENT
$516M $516 million
Potash mining employs Saskatchewan residents and is indirectly responsible for many more jobs and careers. JOB S:
5,100 WAG E S:
$1B $1 billion
SAFETY Mining is one of the safest industries in Saskatchewan, and in Canada. Recordable injury frequency rate* employees (average): 1.057 *RIFR reflects the annual injury rate per 100 full-time employees.
COMMUNITY INVESTMENT Saskatchewan potash companies invest in community initiatives, partnerships, and causes that enhance the quality of life in the regions where they operate.
$15.5M
In 2017, $15.5 million was invested in various communities and Indigenous partnerships.
SUPPLI ED BY SASKATCHEWAN MI NI NG AS SOCI ATI ON
K+S Potash Canada’s overall community involvement focus is on young people. Its K+S Youth+Us initiative supports opportunities for youth to engage, create and discover through education, leadership experiences, sports, art and culture. Pictured here is the K+S Potash Canada Pink Shirt Day in support of the Red Cross anti-bullying rally, held on February 24, 2020, prior to the COVID-19 pandemic. KSPC
modate approximately 450 employees. “It is coming along nicely,” says Seitz. As a company, Nutrien believes that it is critical to maintain sup-
and around Tugaske, are ready to go. “Once that Hermes approval has been received, then the banks become happy and they write their commitment letters for the debt-financing. Then we’re away to the races,” Ferguson says. Here’s hoping for clear skies and a fast track.
port of valued community partners and groups who often suffer disproportionately in times of economic uncertainty.
Globally, The Mosaic Company made investments totalling $1.5 million to help feed the hungry and to provide critical supplies to farmers and others. In Saskatchewan, Mosaic focused its efforts on three funding initiatives: Supporting vulnerable families with a donation of $75,000 towards food-related programming delivered by the North Central Family Centre in Regina; providing $100,000 to 10 First Nation partners to fund food programming and other urgent community support; and donating $20,000 to the Canadian Red Cross in Saskatchewan to assist with pandemic response efforts. MOSAIC