January 21, 2016 / 8:49 PM / in 5 years

Potash Corp mine closure may shelve Canpotex port plans: CEO

(Reuters) - The suspension of production at an eastern Canadian mine may lead Potash Corp of Saskatchewan Inc to shelve plans to build a new West Coast shipping terminal with partners Mosaic Co and Agrium Inc, Potash Chief Executive Jochen Tilk said on Thursday.

Jochen Tilk attends the company's annual general meeting in Saskatoon, May 15, 2014. REUTERS/Derek Mortensen

Canpotex Ltd, owned by the three companies, has been considering construction of the terminal at Prince Rupert, British Columbia.

Potash said on Tuesday it would shut its newest mine, Picadilly, in New Brunswick, due to weak market conditions.

The company also said its storage and loading facilities at Saint John, New Brunswick, with capacity of handling 2.5 million tonnes annually, could now be used by Canpotex.

It ships potash offshore that Potash Corp, Mosaic and Agrium produce in the western province of Saskatchewan.

The decision allows Canpotex to “indefinitely defer” a decision on the C$900 million Prince Rupert terminal, Tilk told a CIBC investor conference in Whistler, British Columbia.

“We certainly don’t anticipate making that decision in the next 10 years, so we’re very good with our port facilities on the West Coast and on the East Coast,” he said.

Canpotex has made no final decision about the Prince Rupert terminal, said Chief Executive Ken Seitz.

With port facilities in New Brunswick now available, Canpotex is reviewing its supply-chain strategy, he said. The review will include looking at the Prince Rupert terminal’s feasibility, with a decision likely this year, Seitz said.

Tilk also said Potash Corp’s board of directors would discuss the company’s dividend next week. Analysts have speculated that Potash will reduce its dividend.

Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Meredith Mazzilli and Tom Brown

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