(Repeats without changes)
* Zhongchuan has tested Saskatchewan site for past year
* Mine developers seek overseas investors, partners
* China a top buyer, Canada a key producer of potash
By Rod Nickel
WINNIPEG, Manitoba, Oct 19 China's Zhongchuan
International Mining Corp is exploring for potash in Canada's
mineral-rich Saskatchewan province as optimism about long-term
demand for the crop nutrient attracts more foreign investment.
The Saskatchewan government granted the Chinese mining firm
exploration rights in September 2008, government spokesman Bob
Ellis said on Monday.
The company's Canadian subsidiary, Canada Jiuyi, is
drilling and conducting seismic tests on a 96 square kilometre
(37 square mile) site southeast of the city of Saskatoon, Ellis
said. If developed, the site could produce 3 million tonnes of
potash annually, the official Xinhua news agency said on
"It certainly says a lot about what people see as a highly
valuable resource and commodity that we have here in
Saskatchewan," Ellis said. "The industry is optimistic about
its long-term prospects."
Under the terms of its agreement, Zhongchuan has up to four
more years to explore for potash, but can also apply for
The company does not own the land, which has not been mined
If Zhongchuan decides it wants to develop the site into a
mine, it would need further government approvals.
One other Chinese company, Taiji Resources Ltd, has active
exploration rights in Saskatchewan, Ellis said, adding he
didn't have details about how much work that company has
Major producers Potash Corp of Saskatchewan (POT.TO),
Mosaic Co (MOS.N) and Agrium Inc (AGU.TO) are among the active
potash miners in Saskatchewan and all are expanding. Australian
miner BHP Billiton (BHP.AX) is in the early stages of planning
its own potash mine in the Western Canadian province, which is
a major world source of the fertilizer.
Prohibitive mine-building costs have forced a handful of
potash exploration companies to look for overseas investors, or
strategic players that are interested in partnering in their
Juniors such as Athabasca Potash API.TO, Potash One
KCL.TO and Western Potash WPX.V have all been reported to
be engaged in talks with Chinese and Indian companies that are
eager to secure potash supplies due to growing demand for
fertilizer in those two big markets. [ID:nN12150545]
Demand for potash is expected to rebound gradually in
coming months as economic conditions improve and farmers, who
have been holding off expensive fertilizer purchases, resume
applications to boost crop yields.
China is the world's largest buyer of potash, an essential
mineral needed for plant growth, along with nitrogen and
phosphate. It traditionally signs an annual supply agreement
with Canpotex, the offshore marketing agency for Saskatchewan's
biggest potash producers, but has not yet agreed on terms for
China imported 3.18 million tonnes of mineral and chemical
fertilizer, with a total value of $1.637 billion, in the first
eight months of this year, according to Chinese customs data.
The data did not include a specific figure for potash.
The country used 7.633 million tonnes of potash in 2007,
more than 65 percent of which came from imports, the Xinhua
agency report said.
Zhongchuan is a mining conglomerate involved in copper,
gold and other metals. It is part of Jiuyi Group, an investment
holding company based in Beijing.
For a recent package of stories about potash, please click
(Additional reporting by Euan Rocha and Beijing newsroom;
editing by Peter Galloway)