RE: Mosaic CEO and $600/t PotashThanks AAA for the article++ clearly shows that another CEO of a major is telling us what we have been told before...
$600 per tonne for potash or do not hold your breath on new conventional mines being built....do you think the CEO Prokopanko of Mosaic and CEO Doyle of Potash Corp. might know a thing or two about the potash business?
Last month Mr. Doyle told us that we should not underestimate the real cost of a new mine in Sask. he said the price will likely be
double estimates....
If existing brownfield mines are able to take up some of the slack needed for increased production of potash and still make money at $300 per tonne..one has to wonder if potash will get to $600 per tonne anytime soon? It appears that there will be many greenfield mines kept on hold for the near future and until KCL goes up a further 40%......I believe that there would have to be material reasons on the immediate supply side or demand side happening to create an imbalance for KCL to move up 40% from its current selling price....Remember Allana is very profitable at $300 per tonne as well, we also have a 40% premium for half of our potash as SOP.
We have also been told that mine upgrades and capex improvements can take from 5 -7 years for Brownfield Expansions...
It becomes even more clear why AAA is ahead of the herd, 2 years to solution and open pit production and has major companies like
Forbes Manhattan, China Minerals, Liberty Metals, World Bank and Sprott Asset Mgt....all wanting to invest into our future.
He added that so-called brownfields projects – expansions to existing facilities – would make money at $300/t.
Mosaic CEO Prokopanko states..."Potash prices will need to rise about 40% from current levels to justify building brand new mines, Mosaic CEO James Prokopanko said on Thursday.
“On the greenfield side, I just don’t see projects being justified as yet,” he said on the company’s third-quarter results call.
Spot prices for the crop nutrient were trading at $392,50/t this month, Scotia Capital reported on Monday, while Prokopanko said prices of at least $600/t would be needed for companies, including BHP Billiton, to justify the costs of building new projects.