VANCOUVER, BC, August 17, 2021 / CNW / – On July 22, 2021, Westshore Terminals Investment Corporation (TSX: WTE) (the “Company”) has announced that its wholly owned subsidiary Westshore Terminals Limited Partnership (“Westshore”) has entered into a conditional agreement (the “Agreement”) to provide services to BHP Canada Inc. (“BHP”). Following the final investment decision of the BHP group to continue the Jansen Stage 1 project, the conditions precedent of the agreement are now met.
Agreement requires Westshore to build the necessary infrastructure to provide port services to BHP facilities Jansen potash mine Saskatchewan (the “Jansen Mine”) for a period of time until 2051, subject to extension.
Potash plant construction
Westshore is designing and building the infrastructure necessary to handle potash, including a potash dumper, storage building and associated transportation systems. In addition, some existing infrastructure at the Westshore terminal will be modified to support the handling of potash. Potash will be loaded only at Pier 2 of the terminal, which will continue to be available for loading coal. Coal mining is expected to continue without undue interruption during the construction phase.
Westshore must obtain certain permits in order to begin construction. Westshore has been in discussion with the appropriate authorities, primarily the Vancouver Fraser Port Authority (“VFPA”). Westshore anticipates that the required permits will be issued in the first half of 2022, after which construction will begin. The Accord calls for the potash infrastructure to be available by mid-2026.
BHP will largely finance the construction, with Westshore being responsible for construction costs in excess of the agreed budget. Westshore will also contribute up to a $ 33 million costs linked to a specific infrastructure or to unforeseen authorization conditions encountered.
Provision of Services
The Agreement provides for fixed loading costs per tonne which are indexed annually to changes in the CPI during the term of the Agreement.
BHP is committed to providing Westshore with minimum annual volume commitments that are calibrated to the production of Stage 1 from the Jansen mine. Under the agreement, if BHP chooses to invest in the next stage of Jansen, then its minimum annual volume commitments under the agreement will increase accordingly to reflect the higher production at the Jansen mine. The minimum annual volume commitments during Jansen Mine Stages 1 and 2 represent a substantial percentage of the expected production from the Jansen Mine while providing flexibility for BHP to conduct domestic sales.
The potash dumper and transport system have been designed to handle volumes equivalent to the maximum annual throughput of bulk materials at Pier 2. For volumes greater than Phase 1, the potash storage building is expected to be expanded. and the building was designed accordingly. BHP has the right, but is not obligated to use the Westshore facilities to increase production at the Jansen mine beyond Phase 2.
The agreement requires Westshore to exercise its renewal options under the VFPA terminal lease until 2051. For periods after 2051, provided that BHP has exercised its option to extend the agreement and certain volume requirements are met. annual minimum are met, Westshore must exercise its other renewal options under the lease.
Pier 1 and the existing stackers will remain dedicated exclusively to coal, and Westshore does not anticipate that the Phase 1 tonnage will result in a functional restriction on its ability to handle current levels of coal throughput.
This press release contains certain forward-looking statements that reflect the current expectations of the Company and Westshore with respect to future events and performance, including, but not limited to, obtaining the required permits during the first quarter of 2022, the timing of the commencement of construction of the potash facility, Westshore’s ability to continue to handle current levels of coal throughput while handling potash at Phase 1 tonnage and the impact of construction potash installations on the Westshore coal operations. Forward-looking statements are based on information available at the time they are made, assumptions made by management, management’s good faith belief in future events, and will be influenced and subject to a variety of risks. , known and unknown uncertainties and uncertainties. other factors which could cause actual events, performance or results to differ materially from those expressed or implied, including, without limitation, the following: difficulties or delays in obtaining the necessary authorizations, including from VFPA; unexpected requirements in necessary permits; standard challenges and unexpected complications in the construction of potash facilities; and including the risk factors described in Westshore’s annual information form, which could cause actual performance or results to differ materially from those reflected in forward-looking statements or current expectations. Forward-looking statements should not be interpreted as guarantees of future performance or results, and will not necessarily constitute precise indications as to whether, or when, such performance or results will be achieved. There is a significant risk that the estimates, predictions, forecasts, conclusions and projections will not prove to be accurate, that the assumptions will not be correct and that the actual results could differ materially from such estimates, predictions, forecasts, conclusions or projections.
THE SOURCE Lawson Lundell Lawson & McIntosh
For further information: Glenn Dudar, Vice President / General Manager, (604) 946-3494