|
MARCH 2010, Volume
25 Issue 3
What's
Happening in Saskatchewan
Potash plays
total $500M
|
|
Potash mine in central Saskatchewan.
|
BHP Billiton Canada Inc. has made two major moves totalling more than half a billion dollars into Saskatchewan's potash industry.
It announced plans to buy Saskatoon's Athabasca Potash Inc. (API) for $341 million less than a week after unveiling plans to invest $240 million in its Jansen potash project.
The acquisition ends a nearly year-long process by API to find the capital to advance its Burr potash project, located about 100 kilometres east of Saskatoon. BHP Billiton's Jansen potash project is in the same area of the province.
"API's board of directors has reviewed and explored a number of possible strategic options and it has concluded that BHP Billiton's offer is in the best interests of API's shareholders," said Dawn Zhou, the company's executive chair.
API shareholders vote this month on the deal.
The acquisition is part of BHP Billiton's plan to build a potash resource position, explained Graham Kerr, president of BHP Billiton diamonds and specialty products division.
"This acquisition fits well with our existing projects and land positions in the Saskatchewan potash basin," Kerr said.
BHP Billiton's $240 million (U.S.) investment in its Jansen potash project is an important step toward creation of a new Saskatchewan mine that could employ up to 1,000 people, said project director Gordon Graham.
However, he said the investment doesn't mean BHP Billiton has finalized plans to build a potash mine at the Jansen site, just north of the community of Lanigan.
The Australia-based company refers to the $240-million investment as pre-commitment capital. The money will be used to sink two shafts - one production and one service - along with required engineering and associated work that must be completed before the company receives environmental permits, which are expected to be issued in mid-2011.
Meanwhile, BHP Billiton, which opened new offices in Saskatoon in January, is continuing to advance its Boulder and Young potash projects, part of the company's 7,338-square-kilometre exploration lease in the province.
"We don't just want to create one mine out of this, we actually want to create several, and we want this ground to be the anchor point of a great new business," Graham said.
Province leads
economic growth
A rebound in resource and agricultural commodities will propel Saskatchewan's economy to the front of the provincial pack this year, said a recent economic insights report from CIBC World Markets Inc.
"Expect Saskatchewan to lead all provinces in 2010," said senior economist Warren Lovely.
CIBC predicted GDP growth in the province to climb three per cent in 2010 and 4.1 per cent in 2011.
"Saskatchewan entered 2010 with considerable potential," said Lovely, noting that the province boasted a 1.5 per cent increase in employment and the country's lowest jobless growth last year.
"Being closer to full employment, wage growth leads the nation, auguring well for future consumer demand. Solid job prospects will continue to spur in-migration, with population growth stronger than at any time in the past 30 years."
In addition to a resurgence in demand for commodities, last year's cooling in overheated housing markets, wages and material costs is driving economic renewal in the province.
This is a big change from 2009 when the global recession saw demand and prices for resources plummet, causing Saskatchewan and other commodity-based provinces taking four of the bottom five spots in real GDP growth in the country.
"Saskatchewan is well-positioned to take advantage of that [global economic recovery],'' Lovely told a Saskatchewan newspaper.
"Where every other province was seeing significant job losses, Saskatchewan was creating jobs. [The province] continues to attract in-migration from other provinces, and population growth hasn't really slowed. The domestic economy still seems to be operating with a pretty healthy head of steam.''
Lovely sees the increase in demand for commodities gathering up momentum in 2010 and 2011, which should keep Saskatchewan at or near the top of the economic heap among the provinces.
Construction sets
a record pace
Saskatchewan led the nation in the percentage increase in non-residential construction in the fourth quarter, said a report from Statistics Canada.
The province posted an 18 per cent increase in non-residential construction investment to $402.8 million from $342 million in the fourth quarter of 2008. Nationally, non-residential construction was down by 7.9 per cent, on a seasonally unadjusted basis.
On an annual basis, there was $1.5 billion in non-residential construction in Saskatchewan last year, up from $1.19 billion in 2008 - a record high since Statistics Canada began reporting on non-residential construction in 1997.
Saskatchewan also boasted the second-highest percentage increase among the provinces on an annual basis.
Michael Fougere, president of the Saskatchewan Construction Association, said the large increase came as no surprise.
"All our members are saying they're working - not totally flat out - but they're very busy,'' Fougere said. "There's no slack.''
He attributed a large part of the increase to infrastructure spending by the federal and provincial governments. "It's a very critical element,'' Fougere said.
The largest portion of non-residential construction is commercial, which increased 3.4 per cent to $169 million in the fourth quarter.
The next largest component is institutional construction (including road building), which increased nearly 50 per cent to $142 million in the fourth quarter (seasonally adjusted). Industrial construction increased 13 per cent to $68 million from $60 million in the fourth quarter of 2008.
Construction includes large-scale projects, like the $1.9 billion expansion project at Consumers' Co-operative Refineries Ltd. and global transportation hub in Regina.
Saskatoon realtors
on a big-time roll
Saskatoon realtors sold more than $1 billion worth of residential real estate during 2009, with the average home price nearing $300,000 for the first time ever.
In December, Saskatoon realtors sold 211 homes, up 31 per cent from 2008. There were 3,822 residential units sold during all of 2009, up 9 per cent from a year earlier.
The average residential selling price remained steady at $291,554 up 9 per cent from December 2008.
However, the 2009 average selling price was $278,779, down 3 per cent from 2008, realtors report.
The total value of residential real estate sold during 2009 in Saskatoon was $1.065 billion, up 5 per cent from 2008.
Home buyers had 703 homes to select from at the end of December compared with 1,127 in December a year earlier
- Compiled by Joe Ralko
|
