November 2010

Joint luncheon on food security

By Rick Hutson

On September 16, the CIM Toronto Branch and the CIM Management & Economics Society held their annual joint luncheon featuring David Davidson, partner and senior analyst at Paradigm Capital, who gave an engaging presentation on “Potash — Why all the Drama?” to over 100 industry members and interested parties.

Although potash has generally been under the investment radar, according to Davidson, there are compelling reasons for believing that potash demand will grow and consequently secure Canada’s position as a leading producer. Not only does Canada have approximately half of the world’s known potash reserves, PotashCorp is the world’s largest producer of potash at 10 million tonnes per year and is projected to grow to 16 million tonnes by 2015.

As Davidson noted, the world population is projected to top eight billion by 2020, with China and India leading the way. Most of this growth will be concentrated in urban areas and with economic growth, increasing disposable incomes, increasing food consumption and little arable land to add, pressure is mounting on food producers to meet the growing demand.

Because potash fertilizer is the single biggest influence in raising crop yields, its demand is growing as a result. About 80 per cent of the world’s potash production is consumed by countries with little or no potash reserves. Therefore, demand for potash is expected to continue to grow with a positive impact on the holder of approximately 50 per cent of the world’s potash reserves (Canada) and the world’s largest potash producer (PotashCorp).

In recognition of his taking the time to speak to the group, the CIM Toronto Branch will be making a donation to the PDAC Mining Matters program and presented Davidson with a plaque noting the donation.

A copy of Davidson’s talk is available on the CIM Toronto website at

Rick Hutson is chair of the CIM Toronto Branch.

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