BY Jim Harding
China isn’t coming to Saskatchewan, it is already here. The 2011 Saskatchewan State of Trade Report says “since 2004 China has been the second largest destination for Saskatchewan exports”. And potash remains near or at the top. But very soon Chinese corporations will control the production of the very potash they import from us now.
China’s huge corporations are scanning the world for resources. Formed in 2011 Yancoal is a subsidiary of Yanzhou Coal, which was founded in 1976. It in turn, is a subsidiary of the Yankuang Group Corporation, one of China’s largest resource and energy conglomerates.
With growing domestic demand for coal, Yancoal has moved into Australia where it is touted as making the “largest investment by a Chinese state-owned company in the Australian coal industry.” Just since 2012 it controls 10 Australian coal mines, mostly in New South Wales and Queensland.
Yancoal continues to diversify. Though China is the world’s largest fertilizer market it has only about 2% of the world’s potash reserves. Saskatchewan has more than one-half of the world’s potash so China’s Yancoal has now come here to get it directly. It has its headquarters in Saskatoon and is quickly accumulating crown potash permits.
As a major world potash producer Saskatchewan now has 14 ongoing potash mining projects. As the Jan. 3, 2013 Saskatchewan Potash Properties report says the province has issued 100% of its permits “including ownership by many of the world’s largest mining companies, such as BHP Billiton and Rio Tinto and leading potash producers Potash Corporation of Saskatchewan, Mosaic, K and S and Agrium.”
The industry can be very competitive but often has joint ventures. Rio Tinto has had joint ventures with North American Potash, the subsidiary of the Russian fertilizer giant Acron. The Nov. 15, 2013 China Daily (U.S.) reported that in 2011 Yancoal “acquired an aggregate of 19 potash mineral exploration permits in Saskatchewan”. These were obtained from Acron for $260 million U.S. which, the report says, places “Yancoal as a central player in the emerging market”.
Potash permits exist over a huge area in mid-southern Saskatchewan that spreads across 2/3rds of the province. The Saskatchewan Potash Permits site shows that the Acron permits that have now gone to Yancoal cover a large area, north and east as well as east and south of Regina towards Esterhazy, which is second only to the size of the area presently controlled by Australia’s BHP Billiton. Towns like Cupar, Southey and Earl Grey and the RM of Longlaketon No. 219 are in the area presently being targeted for potash mining by this Chinese corporation.
Like all multi-nationals Yancoal praises itself in its own promotions. Its website says it exemplifies “integrity management”, undertakes “harmonious development” and is committed to “environmental protection”. But words, we know, are cheap.
One way to judge an industry is by how it conducts its business elsewhere, including in its home country. China is amongst the most contaminated, non-regulated countries on the planet. Yancoal’s parent company, Yanzhou Coal, does most of its business within China where it owns six large coal mines. Yanzhou has benefitted from growing demand for coal to generate electricity to propel China’s economic growth. In just one decade electricity production has grown from 1.1 to 3.0 trillion KW hours. Yanzhou’s largest customer is the Zouxian Power plant in Shandong Province. This is among the largest coal plants in China, with a capacity of 4,400 MW, which is 1,000 MW more than needed for all of Saskatchewan. Like Alberta’s tar-sands, China’s giant coal plants are big players in the growing climate crisis.
The Harper and Wall governments continually celebrate the corporate opportunities arising from China’s endless economic growth. But the environmental impacts and human rights abuses are typically ignored. Yet there is growing public anger in China about the steady degradation of air from smog, much of it coming from the proliferation of coal-burning plants such as at Zouxian. There is also growing anger about the degradation of water.
This anger finally forced the Chinese government to release a study it did on the contamination of soil. This research was extensive, lasting 7 years (2005-2012) and including 100,000 samples taken on 630 square KM of land. The findings were so frightening that they were initially treated as a “state secret”.
The research showed that 3.3 million hectares or 20% of China’s arable land was already contaminated with toxic metals. The eastern coastal areas were the most affected though the worst contamination occurred in the southwest. Most of the contaminated land was in grain-producing regions where cadmium, nickel and arsenic were all found in farmland. Some areas had up to 5 times the ‘safe levels’.
These toxins inevitably find their way into domestic and exported foods. Rice is a Chinese staple crop and cadmium-tainted rice has been found to be widespread. In the major city of Guangzhou nearly half the rice sold was contaminated. Contaminated rice was being sold to noodle-makers supplying the export as well as domestic market. “Cancer villages” near industrial and agricultural growth areas are on the increase.
This poisoning of the land has resulted from China’s unfettered industrial growth, its overuse of agricultural chemicals and its minimum or non-existent environmental oversight. This is the agricultural system Saskatchewan potash is helping to expand.
Yancoal plans to use solution mining in its Saskatchewan potash operations. The government will provide licenses to draw water from the Buffalo Pound reservoir on the Qu’Appelle watershed. This will not only affect water security but degrade water quality. As an engineering analysis in Canadian Consulting Engineer (June 2013) says “potash solution mines use large amounts of water”; a mine can use “up to 60,000 cubic metres per day or between 500 to 700 litres per second”. Then there is the serious matter of contamination and underground injection of waste water.
Due to its unfettered industrialization China already faces a huge water crisis. Coal plants such as the ones fueled by Yancoal’s parent company account for one-fifth of China’s total water use. On World Water Day it was reported that 400 Chinese cities have faced water shortages; Beijing is overusing ground water. Many of China’s rivers are at the lowest levels on record and China’s largest freshwater lake, Poyang Lake, has all but dried up from overuse and drought. Hydro power reservoirs are steadily falling as are aquifers. Water quality and environmental health continue to decline.
Meanwhile China’s Yancoal is coming here to expand potash solution mining which, though cost-effective for them, will squander our water. It is important to remember that the Sask Party government is on record as saying that corporate “water rights”, licenses granted to access our waterways, will trump other uses, such as domestic, recreational or ensuring the ecological health of our waterways. Water is not treated as a human right or ecological need in Saskatchewan.
Can we count on environmental regulation to protect Saskatchewan land and water? The Harper government has steadily gutted our federal environmental protection system to fast-track toxic resource development. Waterways are being deregulated to allow for more unfettered access to industrial water. Is the Saskatchewan government going to fill the regulatory vacuum, when accelerated resource extraction and not ecological sustainability, is their bottom line too?
China is not coming to Saskatchewan, it is already here. This presents a far greater challenge to Saskatchewan’s sovereignty and sustainability than BHP’s past attempt to take over control of the U.S.-based Potash Corporation of Saskatchewan. But not a peep from our politicians about this “strategic resource”!
Will we soon become a front-end of China’s resource supply chain? Will we become a major partner with one of the most environmentally unsustainable places on the planet? Is it time to reconsider our province’s bottom line?