North Atlantic Potash sells eight potash permits to Chinese firm for $110 million
SASKATOON—North Atlantic Potash Inc. has sold eight of its potash-permitted areas north of Regina and signed a joint-venture with mining giant Rio Tinto to build one of Saskatchewan’s largest potash mines.
The $110 million sale to China-based Yancoal Canada Resources Co. Ltd. allows North Atlantic Potash to focus on its remaining potash permits in Saskatchewan.
Proceeds from the sale will increase the firm’s exploration program in the province and a drilling campaign in November.
Financial terms of the Rio Tinto joint-venture have not been released, but the transaction is part of a broader trend of potash producers joining forces on new projects as global fertilizer demand rises in tandem with an ever-increasing demand for food in emerging economies.
The deal gives Rio Tinto a stake in the world’s most abundant potash producing region, while North Atlantic will benefit from Rio Tinto’s cash resources and longstanding mining experience in Canada and around the world.
North Atlantic Potash holds nearly 1.1 million hectares and 26 exploration permits in the Saskatchewan potash belt.
The company is a division of JSC Acron, a fertilizer producer based in Russia with 13,000 employees and 2010 sales of US$1.6 billion.
JSC Acron produces ammonia, nitrogen and complex mineral fertilizers as well as organic and non-organic compounds.