“Human beings create more than they destroy.”
– Julian Simon, The Ultimate Resource 2 (Princeton, N.Y.: Princeton University Press, 1996), p. 580.
When the tide comes in, all boats rise.
Saskatchewan’s mining industry has begun a period of unprecedented growth that promises to last for decades. And while Prince Albert is not at the mouth of the bay, we are in the bay, and our boats are rising as well. Prince Albert is seeing record building permits issued, but few local items to exactly explain why.
With a current tax incentive and confidence in the future, PotashCorp began a series of expansions seeing $5.8 billion being poured into Saskatchewan. It is the “mother of all economic stimulus packages,” seeing spending, on a per capita basis, double the American and triple the Canadian governments’ stimulus packages. Better yet, this investment is new money into our province, money generated from other countries, so we did not see the debt burden that others’ have.
We also saw PST and income tax paid on a lot of this money, creating more money into our provincial coffers – more than would have been paid without the right-offs affiliated with PotashCorp’s investments.
We became an economic island in a sea of turmoil and are now an economic leader. Saskatchewan has the best of both worlds; Ontario’s metals on the north-east half plus Alberta’s oil and oil sands on the south-west half. And we also have the massive economic driver of potash, plus the strong potential for diamonds.
Bring on the Future
Going forward, PotashCorp still has over $1-billion left to invest – and they may yet do more – and others are following suit. Mosaic has begun an over $3-billion expansion program and Agrium a $1.5-billion expansion program. And now we have new players lining up with plans of their own. K + S has announced the construction of a $3.25 billion mine near Moose Jaw.
The world’s three largest mining companies – BHP Billiton, Vale, and Rio Tinto; plus companies from Russia and China; as well as some junior companies; have also started presenting plans for near-term mines totaling over $30 billion, plus discussions of expansions and other developments after that.
While none of these programs are in our backyards, they’re in our bay and they will see immense benefits flow our way, as they will require the entire province’s asset base to be completed and open new markets. They will also generate immediate income tax and PST contributions to our Provincial Government.
And once phase 1 – construction – is completed, then phase 2 begins; production. Production ensures continued employment and then royalties flowing into Government.
Our uranium sector is also set to see vast improvements as the world requires at least 64% more uranium to meet global demand in the next 10 years. Accordingly, Cameco has begun work to double production from existing facilities.
Further, Rio Tinto has bought into our uranium sector and government is now contemplating revising the foreign ownership laws of Canadian uranium mines (currently seeing foreign ownership limited to 49%), which will allow development to begin by Rio Tinto. Milling the ore, should they mine the deposit, may be an issue for Rio Tinto requiring further purchases or joint ventures to complete.
Today, we have more than 400 workers flying from the Prince Albert airport each week, to Cameco’s uranium mines in our north alone – and then there are additional seasonal and contract workers. With Rio Tinto joining our collection of uranium companies, Prince Albert should see further impacts.
Gold and Diamonds
And, for the first time in over a decade, Saskatchewan’s gold belt – stretching north from LaRonge – is fully claimed. This will lead to exploration and then further developments.
Diamond developments are on the horizon. This is a case of, as Tom MacNeill stated, “You can’t be pregnant forever.” Sooner or later the world’s largest diamond deposit will be mined.
It must be remembered that diamond deposits are far more complicated than potash ones; think of trying to map marbles tossed from an airplane into a desert, versus mapping a field of wheat – and then add to this that no two diamonds have the same price. In short, putting a valuation and then final costing, plus detailing the environmental impact and mitigation, on a project this large, is immensely complicated but critical. Patience and faith are the hallmarks of the mining industry – especially in diamonds.
The tide is starting to come, and our boats are rising. This is truly a time of prosperity in Saskatchewan, which will continue for decades.
Our boom is just beginning to get some lift. But will the right public policies allow us to turn potential into reality for an open-ended resource-rich future?
Eric Anderson is a Saskatchewan resources consultant, who creates a daily radio commentary entitled “Prosperity Saskatchewan” for Rawlco Radio. Over 1,000 episodes of “Prosperity Saskatchewan” have aired to date, and Eric has completed numerous speaking and consulting engagements.
The Prosperity Saskatchewan site contains up-to-date news items relevant to Saskatchewan’s mining, oil, and gas sectors; as well as their economic impact on the province. The site also contains information on Eric’s various communications avenues.