WINNIPEG, Manitoba (Reuters) - Canada’s Potash Corp of Saskatchewan (POT.TO) POT.N, the world’s biggest maker of fertilizer, doesn’t expect to see any new potash mines start production over the next five years, Chief Executive Bill Doyle said on Wednesday.
“This business is real easy to talk about - it’s much harder to do,” Doyle said in a webcast during which he fielded submitted questions. “There are no greenfield projects coming on in the next five years, between now and 2017, none.”
Several companies are planning new mines for potash, a crop nutrient, in Potash Corp’s home base of Saskatchewan in Western Canada, led by Anglo-Australian miner BHP Billiton (BLT.L) (BHP.AX) and Germany’s K+S AG (SDFGn.DE).
But Doyle said it takes an “enormous amount of time” to develop a new potash mine and downplayed predictions of excess potash production capacity.
“This is way overrated, way overplayed if you know anything about the process it takes to build new capacity,” he said, adding that he does expect that brownfield capacity will increase due to the expansion of existing mine sites.
Doyle did not specify whether he was predicting no new potash mines globally, or just in Canada, which is home to nearly half of the world’s potash reserves.
A report by Rabobank on Tuesday said new players will add to potash supplies, pressuring the profits of companies such as Potash Corp by 2020.
Increasing food demand in populous countries such as China and India has boosted potash prices in recent years, driving up interest in producing more of the fertilizer.
K+S held a ground-breaking ceremony last week for what it said will be the first new potash mine in Saskatchewan mine in nearly 40 years, with first production planned for late 2015. (Reporting by Rod Nickel in Winnipeg; Editing by Peter Galloway)