Manitoba bid to start potash mine met with skepticism

The Canadian province of Manitoba is wading into the potash industry that has proven so lucrative to its neighbour, Saskatchewan.

The Winnipeg Free Press reported on Saturday that the province, through a Crown corporation called Manitoba Potash Corp., is gauging the interest of a number of companies in developing 28,024 hectares of "undeveloped, mineable high-grade potash deposits" adjacent to the Saskatchewan border. A large-scale potash mine could hasten the influx of around $5 billion in capital investment for the prairie province.

However, analysts contacted by the Free Press were not optimistic about the prospects:

"Interest from current players in a project like that is probably pretty remote," said Joel Jackson, a research analyst with BMO Capital Market specializing in fertilizer companies. "The potash industry is quite oversupplied right now and there is massive amounts of new capacity coming on stream in Western Canada and the world, for that matter."

Spencer Churchill, an analyst with Paradigm Capital in Toronto, agreed with Jackson. "The likelihood is pretty small," he said of a Manitoba greenfield.

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