PotashCorp's CEO takes a stick to juniors
PotashCorp's (NYSE:POT) president and CEO said there are no greenfield project that are coming online in the next five years.
Bill Doyle, who conducted a webcast interview on Wednesday, made the comments when asked about potential over capacity in the industry.
"I think this is way over-rated, way over-played if you know anything about the process it takes to build new capacity," said Doyle.
He said the potash industry is easy to talk about but "much harder to do" and he doesn't see much build out from where he is sitting.
"Everybody, every project I see out there that are all being promoted, everybody talks about 2015. There are going to bring on their projects in 2015, but they haven't started construction yet."
Doyle noted that brownfield expansion can take upwards of seven years.
"You know there was an ad in the local paper. It was actually a paid ad by one of these promoters—a little bit questionable in my opinion. They showed the guy sponsoring the project, and they said he is at the mine site. He's standing in a field of grain. There's no mine, there's no construction, there's not even any equipment."
Reuters reports that Doyle was referring to Western Potash (TSE:WPX), which dropped 21.93% to 89 cents on Thursday.
Western has also been hurt by speculation that an investment from an Asian firm will not be going ahead.
Scotiabank said the outlook for the potash market overall is lacklustre due to high producer inventories. Doyle, however, believes that the North American market is set to rebound since demand has been kept artificially low.
(Doyle's five-year comments start at the 17:30 mark.)