Latest / DEEP INSIGHT / Could the U.S. replace Canadian potash with Belarusian supply

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Could the U.S. replace Canadian potash with Belarusian supply · DEEP INSIGHT

• 0:00
  Speaker 1: Donald Trump has announced the U.S. is working with Russian
• 0:03
  Speaker 1: ally Belarus to buy potash. This marks another escalation in
• 0:07
  Speaker 1: his ongoing trade war with Canada. In a post to
• 0:10
  Speaker 1: Truth Social, Trump said the price would be substantially less
• 0:15
  Speaker 1: than what the U.S. buys from Canada. He went on
• 0:17
  Speaker 1: to say that it would be very good for farmers
• 0:20
  Speaker 1: and ranchers. Potash is a key ingredient in fertilizers. It's
• 0:24
  Speaker 1: also a major Canadian export.
• 0:26
  Speaker 3: The U.S.
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  Speaker 1: Imports about 85% of its potash Well, according to Natural
• 0:33
  Speaker 1: Resources Canada, all of the country's 10 active potash mines
• 0:37
  Speaker 1: are in Saskatchewan. The province's premier, Scott Moe, posted to
• 0:41
  Speaker 1: social media about why he thinks the United States shouldn't
• 0:44
  Speaker 1: buy potash from Belarus. He says more than 40 countries,
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  Speaker 1: Canada and its allies, have sanctions against Belarus for supporting
• 0:52
  Speaker 1: war criminal Putin's invasion of Ukraine. Buying blood potash from
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  Speaker 1: Belarus is supporting Russian aggression. It's wrong and it doesn't
• 1:02
  Speaker 1: make sense. All of that potash has to be shipped
• 1:05
  Speaker 1: first through Russia, then across the ocean, then across the U.S.
• 1:10
  Speaker 1: to Midwestern farmers. Does anyone believe Belarusian blood potash shipped
• 1:15
  Speaker 1: through Russia is going to be more affordable, more sustainable
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  Speaker 1: and more ethical than potash shipped from Saskatchewan right here
• 1:24
  Speaker 1: in North America? Well, let's find out how the Canadian
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  Speaker 1: potash industry feels about the U.S.
• 1:29
  Speaker 2: Announcement.
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  Speaker 1: Pam Schwan is the president of the Saskatchewan Mining Association,
• 1:34
  Speaker 1: and she joins us now from Saskatoon. Thank you very
• 1:36
  Speaker 1: much for speaking with us. What was your reaction when
• 1:40
  Speaker 1: you heard the comments from the U.S. president today?
• 1:43
  Speaker 3: Good evening, Ian.
• 1:45
  Speaker 2: It certainly took, I think, a lot of people by
• 1:47
  Speaker 2: surprise and grabbed people's attention. But I think it was
• 1:50
  Speaker 2: really lacking in any details in terms of what President
• 1:55
  Speaker 2: Trump was doing in terms of looking at Belarus potash.
• 2:01
  Speaker 3: And certainly we've also.
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  Speaker 2: Heard from the president of Belarus that they really don't
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  Speaker 2: have any extra capacity. All of their capacity right now
• 2:08
  Speaker 2: is being shipped to China. So you'd have to see
• 2:12
  Speaker 2: some significant market changes if there was to be something happening.
• 2:18
  Speaker 1: I'm imagining an urgent conference call with the various companies
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  Speaker 1: and with your association, people going, you know, what did
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  Speaker 1: the president say? How's this going to work? Like, was
• 2:27
  Speaker 1: there the equivalent of that kind of conference earlier today?
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  Speaker 2: I think because there was not very much detail at
• 2:36
  Speaker 2: all in the announcement, the companies are looking for, you know,
• 2:39
  Speaker 2: what the facts are and looking for some more substantial
• 2:42
  Speaker 2: information before they.
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  Speaker 3: Make any reaction.
• 2:45
  Speaker 2: We know that we've got a longstanding positive response relationship
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  Speaker 2: with American farmers. You know, they import over 80% of
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  Speaker 2: their potash from Saskatchewan mines, and it's a longstanding, reliable
• 2:56
  Speaker 2: trading relationship.
• 2:58
  Speaker 3: I'm not sure that the American farmer.
• 3:00
  Speaker 2: Would, you know, they can rely on our producers to
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  Speaker 2: get our potash down there in time for when they
• 3:06
  Speaker 2: need to use it with their crops. And I think
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  Speaker 2: we've got longstanding integrated supply chains. We have geography on
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  Speaker 2: our side in terms of being so proximal to the
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  Speaker 2: american markets whereas uh you know if belarus did have
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  Speaker 2: capacity they would have to get it to port and
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  Speaker 2: then they'd have to transport it across the ocean down
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  Speaker 2: to eastern seaboard markets and then into the mid u.s
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  Speaker 2: where potash is used to help grow corn soybean and
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  Speaker 2: oats primarily.
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  Speaker 1: So it sounds like right now it doesn't feel like
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  Speaker 1: there's a lot for the industry in saskatchewan to be
• 3:44
  Speaker 1: worried about is that is that a fair assessment.
• 3:48
  Speaker 2: Well, I think it's very difficult to pivot really quickly
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  Speaker 2: when you're talking about the volumes that we have. We
• 3:53
  Speaker 2: have 10 million tons that go into the U.S. on
• 3:55
  Speaker 2: an annual basis. It is a mature market. Belarusian production
• 4:01
  Speaker 2: total is 12 million tons. And like I mentioned previously,
• 4:05
  Speaker 2: that's going to China. We know that any investment in
• 4:09
  Speaker 2: potash mine, whether it's a new mine, which we would
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  Speaker 2: call a greenfield or expansion of an existing mine, which
• 4:15
  Speaker 2: we refer to as brownfields, requires significant investment and time.
• 4:19
  Speaker 2: And so, you know, for a million tons of potash,
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  Speaker 2: you're looking at well over a billion dollars investment.
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  Speaker 3: Most of Saskatchewan.
• 4:26
  Speaker 2: Mines minimum now are four million tons of potash. So
• 4:30
  Speaker 2: you're looking at four to six billion dollars worth of
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  Speaker 2: investment and the time that it takes to develop a mine, which,
• 4:36
  Speaker 2: you know, at a minimum would be, you know.
• 4:39
  Speaker 3: Five, six, seven years.
• 4:41
  Speaker 2: And you also have the advantage of having your your
• 4:45
  Speaker 2: rail lines integrated into the U.S. already. So there are
• 4:49
  Speaker 2: a significant number of advantages that Saskatchewan producers have in
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  Speaker 2: that respect. Most important is our longstanding relationship as a
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  Speaker 2: reliable supplier to the American farmers and our integrated supply chains.
• 5:03
  Speaker 1: So as you describe all of that very clearly, it
• 5:07
  Speaker 1: makes me wonder, why did Donald Trump make this announcement?
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  Speaker 1: Was it a meaningful announcement at all?
• 5:15
  Speaker 2: Yeah, I can't really speculate on what President Trump is thinking,
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  Speaker 2: other than it's noteworthy that he's even thinking about potash
• 5:22
  Speaker 2: at all and how that maybe factors into the trade relationships.
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  Speaker 3: But nothing would happen quickly.
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  Speaker 2: And I think we need to just take a breath
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  Speaker 2: and see what details are coming out. We've got growing
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  Speaker 2: markets facing west into Indonesia, Malaysia, India, Brazil and China.
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  Speaker 2: We've got looking to diversify our markets even more than
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  Speaker 2: they currently are. And we need to be able to
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  Speaker 2: deliver our potash from our mine sites to our growing
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  Speaker 2: markets in the West in a reliable manner. So those
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  Speaker 2: are the things that companies are already working on. And
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  Speaker 2: this might just accelerate that to make sure that we've
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  Speaker 2: got a really diversified portfolio of markets.
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  Speaker 1: Pam Schwann is president of the Saskatchewan Mining Association. Thank
• 6:14
  Speaker 1: you very much.
• 6:15
  Speaker 3: You're welcome. Thank you, Ian.