VANCOUVER (miningweekly.com) – The first 177 of 531 custom built rail cars have arrived at potash project developer K+S Potash Canada's (KSPC's) $4.1-billion Legacy mine site, in Saskatchewan.
The company on Monday said this was enough to complete one of three trains that will transport KSPC’s product to its potash handling and storage facility in Port Moody, British Columbia.
“The arrival of these rail cars demonstrates how close we are to production, which is expected to begin in the second quarter of this year. To see them here, branded with our company name and ready to carry our first marketable product, is really exciting,” KSPC president and CEO Dr Ulrich Lamp stated.
K+S advised that its trains will travel along 30 km of Canadian Pacific’s (CP's) recently constructed Belle Plaine subdivision, which connects CP’s main line at Belle Plaine, Saskatchewan, to 14 km of newly constructed industrial rail line which is owned and will be operated by KSPC.
The construction of the Belle Plaine subdivision is the largest single rail infrastructure project in CP’s recent history, providing the most modern rail infrastructure of all of the Saskatchewan potash mines.
The rail cars were designed by National Steel Car and feature industry-leading design suitable for the Legacy project’s state-of-the-art facility. They can be loaded with product while in motion, and have the capacity to hold the same volume as a regular rail car, while being slightly shorter in length, thereby optimising timely and efficient delivery of product.
The 531 rail cars will be sufficient to meet initial requirements for weekly transportation to Port Moody, but more cars will be required as production starts to ramp up later in the year.
Part of the rail fleet will also be used to transport product to the US. All sales and distribution of KSPC’s potash will be carried out through the K+S Group’s established global distribution structures.
Potash prices have suffered after four years of dithering farm incomes reduced the overall demand for crop nutrients. The downturn across the farm economy has sparked a string of megamergers in the agricultural chemicals industry. In September, PotashCorp and Agrium agreed to a $12.9-billion merger that will create the world’s largest crop-nutrient supplier.
However, conditions are strengthening for the potash market, as global demand is expected to increase in 2017 as farmers in North America seek to replenish soil nutrients following a record harvest, and strong affordability is helping robust consumption in Latin America and China.
With plenty of capacity waiting in the wings and significant new output coming on stream, the outlook for the crop nutrient is muddled over the medium term.