CMP owns a handful of salt mines (including the largest rock salt mine in the world — located in Canada — and the biggest in the U.K.) and solar evaporation facilities (including the only sulfate of
potash production site in North America) that it uses to produce its minerals.
Improvements were due to lower cost solar
potash production and higher average net realized potash pricing that offset lower average net realized sales prices for the product, Trio.
Still, the effects of increased levels of
potash production, as promised by Uralkali, on the demand for Canadian potash remains to be seen, said Paul Ferley, assistant chief economist with RBC.
In March, Belaruskali, the state - owned Belarussian company that used to form the other half of BPC, announced it was increasing its own
potash production.
China, another large customer, has increased domestic
potash production.
Not exact matches
Around the world, global
potash demand has been flat since 2007, while global
production capacity has increased.
Because it could then weaken demand for
production coming out of Canada,» said Ferley, adding that it will also have implications for
potash prices, which in turn impacts income growth in Canada and Saskatchewan's fiscal situation.
Increased cash flow was due to strong spring demand, increased
potash prices, and the elimination of costlier conventionally mined
potash from the
production profile.
The pricing system for
potash was turned upside down in 2013 when companies stopped agreeing to a price - based system where
production was limited to support prices.
This is especially true for the company's
potash segment, for which 100 % of its
production is generated in Canada, but sales for
potash are received in U.S. dollars.
Times have been tough recently in the wholesale
potash and nitrogen markets, and Agrium has had problems at a couple of its
production facilities.
«The key thing in that business that may drive M&A is the world is getting smaller, with shrinking distance between producer and consumer — globalization and world population shifts — think of the food business as a long continuum starting with biotech, leading to seed
production, leading to crop inputs and that's where you see some activity in Canada in fertilizer in terms of
potash,» explains Woollcombe.
Carlsbad is a center for
potash mining and petroleum
production.